July 17, 2024


Profitable business

The Three Schools of Business Ethics

3 min read

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 separation 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 inseparable 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!

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