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August 19th, 2008

G. Richard Shell, author of Bargaining for Advantage: Negotiation Strategies for Reasonable People, identifies three primary schools of ethics in negotiation. To me, they are equally valuable in examining ethics in the context of business in general.

1. The Poker School - “It’s a Game”

To poker players, business is a game and anything that can be done to gain advantage within the rules of the game (generally speaking, the laws of the land), is fair and just. If you love negotiating “gambits” (lowballing, goodcop/bad cop, red herrings, nibbling, etc.), and sales “tactics” (101 effective closing techniques, 30 tricks to getting past the gatekeeper,etc.) you may well belong to this school.

2. The Idealist School - “Do the right thing, even if it hurts.”

To the idealist, there is no seperation between business in life. If you would not lie to your loved ones, you do not lie to your clients. If it’s OK to tell a “white lie” to protect the feelings of a friend or prevent a tragedy, it’s OK to tell a “white lie” to protect a corporate ally or prevent a business tragedy. While two idealists may differ in the specific set of rules they live by, they share the rigidity of doing what they believe to be “right”, even when it seems contrary to their business goals.

3. The Pragmatist School - “What goes around, comes around.”

The behaviour of a pragmatist may be inseperable from that of an idealist,but the motivation is different. While the idealist tells the truth and treats people fairly because it’s “the right thing to do”, the pragmatist tells the truth and treats people fairly because they believe it is the most effective way of getting things done. However, they will not hesitate to use deception as a necessary tool in pursuing their aims. Because pragmatists value their reputation (being seen to be honest), they will tend towards “misleading” statements over outright lies.

There are also combinations of these schools. “Pragmatic idealists” dothe right thing because of their ideals but are not above pushing the envelope of truth when the pressure is on and the chips are high; “pragmatic poker players” tend not to bluff in order to evolve their reputation as trustworthy, but will take advantage of that reputation when it really counts. “Idealistic poker players” are those among us who recognise business as a game, fully expect everyone around them to do their best to lie and cheat, but will only involve themselves in games they believe they can win by doing the “right” thing.

Possibly the most important thing to realise is that not everyone plays by your rules. Your being honest does not ensure others will be honest with you; similarly, your willingness to lie, cheat, and bend the rules does not mean the people you are doing with will do the same.

Here are a few things you can do to put these theories of business ethics into practice:

1. If you haven’t already, identify what “school” you belong to. Remember,your motivation is as important an indication of your ethics as your actions.

2. Identify at least one person that you know or have read about that seems to embody each of the three primary and three secondary schools of ethics. Once again, be aware that knowing someone’s actions without understanding their motivation will not necessarily reveal their ethical bent.

3. Discuss this tip with friends, and see what else you can discover that will enable you to be who you are while dealing ever-more effectively with others.

Have fun, learn heaps, and remember - a good poker player will inevitably tell you they’re an idealist!

Michael Neill is a licensed Master Trainer of NLP and has written over 450 articles on in the areas of business success, money, relationships, health, happiness, well-being, and spirituality. His weekly coaching column is reprinted in newspapers and magazines throughout the world, and can be found online at http://www.geniuscatalyst.com

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August 19th, 2008

I was trying to figure out a way to work the Pittsburgh Steelers into a Weekly Insight, particularly after our hometown team earned the right to be called “World Champions.” I realize that not everyone who reads these Weekly Insights hails from Western Pennsylvania (and some of you might not care for the Steelers at all), but hang in there with me on this one.
“Steelers mean business” was the title of an Associated Press article on February 4, 2006. Dr. Joanne G. Dujansky, the founder of KEYGroup, a Pittsburgh business that counsels companies on creating a successful corporate culture was quoted in the article as follows: “The Steelers’ winning tradition didn’t start yesterday. It started when Art Rooney purchased the franchise 73 years ago and set in motion a strategy for success that embraced his vision and values.”

Note that Mr. Rooney’s strategy included “values” as well as “vision.” This past week a student in my marketing strategy class did some research on jetBlue Airways. When she could not find their mission statement on the company website, she emailed the company and asked if they would provide her with jetBlue’s mission statement. The company responded that they did not have a mission statement. Instead, they found success in the marketplace by living out their core values: safety, caring, integrity, fun and passion.

The key words here are “living out.” Values do matter.

With that in mind, let’s examine some of the principles outlined in the book Lasting Change: The Shared Values Process

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August 19th, 2008

The study of business ethics and its implications for different stakeholders have seen tremendous growth in the past few decades. There has also been a rise in the use and development of codes of ethics and announcements for ethical practices by many firms; however companies are still criticized for their unethical practices at different levels (Papers4you.com, 2006). Business ethics, according to the literature has been entrenched with the philosophical details of Ethics (Trevino & Nelson, 1999). Ethics has been defined as ‘the activity of examining the moral standards of a society, and asking how these standards apply to ones life and whether these standards are reasonable’ (Velasquez, 1998; p. 11).

The literature on business ethics is divided on its views about the motivation and reason for businesses to have an ethical dimension. Drawing upon Harrison (2001), there are two major schools of thoughts, firstly those who suggest that firms are profit generating institutions and therefore business ethics is yet another way to attract customers, secondly those who support corporate conscience and intrinsic motivation for the adoption of business ethics.

Business ethics has been considered very subjective in nature and according to Paul (2001) is considered a function of time and culture. It has been established that with the passage of time business ethics have evolved and also that the cultural values and norms drive business ethics within national and regional boundaries. One of the major studies regarding the national values has been conducted by Hofstede (1983). According to this research, which was only based on four indicators i.e. individualism, power distance, uncertainty avoidance and masculinity, there is a great deal of differences among values across different nations and consequently the business ethics. Globalization combined with standardization has made businesses financially efficient but at the same time poses questions regarding the standardized codes of business ethics across national boundaries.

Vinten (1991) has divided the business ethical issues at different levels i.e. international business, domestic business and professional ethics. At the international level ethical issues include free-masonry and socialism versus capitalism; at domestic level these include religious dimensions, social marketing and ethical education; and lastly at the individual level these include bribery, corruption and data protection (Papers4you.com, 2006).

There are many reasons and criticisms for the failure of adoption of ethics in the business world. Firstly, the concept is considered to be overly theoretical and it also negates the basic purpose of any business i.e. to create shareholder’s wealth. Secondly, it has lack of direction and unanimity across different cultures and academic groups. Lastly, it has many inherent unresolved dichotomies that according to Sternberg (1994) make it a case of rejected relativism.

References:

Harrison, J. (2001), Ethics for Australian Business, Prentice-Hall, French’s Forest

Hofstede, G. (1983), The Cultural Relativity of Organizational Practices and Theories, Journal of International Business Studies, Vol. 14, No. 2, pp.75-89

Papers For You (2006) “S/B/92. What distinguishes ethical from unethical business activity and how significant are the principles of business ethics in modern business?”, Available from http://www.coursework4you.co.uk/sprtbus21.htm [17/06/2006]

Papers For You (2006) “S/B/49. ‘Should businesses strive to be ethical?’ Critically Discuss”, Available from http://www.coursework4you.co.uk/sprtbus21.htm [18/06/2006]

Paul, S. (2001), Cultural and Business Ethics, Cross Cultural Management: An international Journal, Volume 8 No. 1, pp 22-35

Sternberg, E. (1994), Relativism rejected: the possibility of transnational business ethics, in Hoffman, W.M., Kamm, J.B., Frederick, R.E., Petry, E.S. Jr (Eds), National Conference on Business Ethics. Proceedings from the 9th Conference on Business Ethics Sponsored by the Centre for Business Ethics at Bentley College, Quorum Books, New York, NY, pp.143-50

Trevino, L.K., Nelson, K.A. (1999), Managing Business Ethics: Straight Talk about How to Do It Right, 2nd ed., J. Wiley & Sons, New York, NY

Velasquez, M.G. (1998), Business Ethics: Concepts and Cases, 4th ed., Prentice-Hall, Englewood Cliffs, NJ

Vinten, G. (1991), Business Ethics: Busybody or Corporate Conscience?, Managerial Auditing Journal, Volume 5, Number 2, pp. 123-144

Copyright 2006 Verena Veneeva. Professional Writer working for http://www.coursework4you.co.uk

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