(e)
Anything else?
5. A computer firm is in an urgent need of a qualified sales manager. Sales
volumes have considerably
decreased for the last six months, because the previous manager failed to do his job well. The deputy
director of the firm is looking for a candidate to fill this position. An applicant, holding a similar position
in a competing firm, is the best of all candidates. He is ready to take this job for a higher salary, which
you are ready to pay. However, during the interview he negotiated his salary and offered to bring a CD
with information on all the customers of his current employee.
a)
Would you give the job to him? If yes, is it ethical towards your competitor? If no, is it ethical
towards your firm, losing revenues?
b)
Can you refer to “all is fair in love and warfare” principles?
c)
What other ethical considerations might be involved?
Sanar Mammadov
CHAPTER V. LYING AND DECEPTION IN BUSINESS
Forms of lying
It is sad to recognize that in the modern world such values as faith, truth, and honesty are being eroded.
Increasingly often, people encounter deception, fraud and falsification. Newspapers report such stories
every day. In business and in ordinary life people try to benefit through lying. Why do people lie? Of
course, we will not study the psychological or philosophical roots of the problem. Our purpose is to
reveal common forms and examples of lying in business and to study their consequences.
The main goal of lying is to gain an advantage over the other party and to earn profit and influence in
every day life or in business by withholding truth and falsifying information. People in the business world
frequently resort to lying when trying to conclude a deal. Lying can be used to: conceal an objective
reality (hiding the heart of the matter); make a realistic choice unclear (by creating deliberate obstacles to
freedom of choice); represent a dubious affair as credible; apparently reduce costs; and artificially swell
profits. Lying can take various forms:
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a)
Falsehood (bluffing) – false promises given to the other party in an attempt to present the non-existent
as genuine.
b)
Falsification – presentation of false information as if were truthful.
c)
Deception – an attempt to force the opposite party to arrive at a wrong conclusion with a set of false
arguments.
d)
Withholding information – presentation of only a part of the truth.
A person trying to distort information should fully understand the potential negative consequences of his
or her actions. In business, lying usually only yields short term benefits.
You can fool all the people some of the time, and some of the people all the time, but you cannot fool all
the people all the time. (Abraham Lincoln).
«Falsehood lacks the courage of its conviction.» (An Azerbaijan proverb).
These expressions depict lying very well.
The business world has very strict rules concerning lying. People who tell lies must understand that they
could lose credibility in the eyes of those deceived, and that the deceived party
might never again apply
for their service. In addition, in business circles, reputation runs before a person, and a person who is
known to have lied may find his or her future attempts to do business with other people doomed to
37
Gizerman and R.J Lewicki, Negotiating in Organization, Chapter 4, in Lying and Deception, p.70, Sage Publishing House,
1983
failure. Such a person may be rejected not only by business, but by society at large,
as no ethical norms
tolerate lying.
In some cases, lying can be justified. For example in a military scenario, use of false tactics towards an
enemy, deliberate overestimation of military forces in order to mislead the enemy, and lying to get secret
information on an enemy’s weak and strong points, can all be justified by ethical norms.
Apart from lying, other examples of unethical behavior include the breaking of promises, cheating, and
stealing.
Breaking promises and defaulting on contractual obligations
A promise is the consent of a person expressing his or her attitude towards a certain matter. In Azerbaijan,
historically people took giving and fulfilling promises very seriously. The expression “a man’s word”
shows how valuable a promise was. A person who broke his promise or took it back was not considered
“manly”. All business activities at the turn of the twentieth century were based on “a man’s word”.
Unfortunately, in the period of the so-called transition to a market economy, many people do not keep
their word and even violate their written contractual obligations.
Stealing
No society tolerates stealing. Stealing involves the taking of somebody else’s property. In democratic
countries private property is sacred, and stealing and trespassing are especially serious crimes.
Embezzlement of state or corporate property is also not acceptable. It should be mentioned that,
unfortunately, some people have become accustomed to stealing and will continue to do so, even if they
are paid decent salaries. Should circumstances allow, they would steal even a minor thing for which they
may have no need.
Fraud and cheating
Fraud and cheating, like lying, aim to deceive. However, in contrast to lying, fraud and cheating imply
certain actions. A person encountering fraud or being cheated risks being deceived. For example, you
have purchased a car and the odometer indicates 40,000 km. However, in reality, this indication has been
falsified by the car seller, and the car’s actual mileage is 140,000 km. This is sheer cheating.
Fraud and cheating can take numerous forms. Specific examples are as follows: deliberate
misrepresentation of taxes payable; falsification of business information (e.g., exaggeration of business
expenditures); giving a short weight at a bazaar; extension of the expiry date of perishable goods;
provision of false evidence to receive an inflated insurance claim; giving false information to obtain a job;
etc.
Fraud and cheating, like lying and deception, undermine trust in human relations. A swindler will not
enjoy his or her benefits forever and eventually will get caught. What is worse, he or she will lose
credibility, which cannot be restored in the future. The realities of Azerbaijan provide us with many cases
of fraud and cheating. Many swindlers who abused the trust of people, and in some cases took advantage
of their ignorance, have either been caught or have had to flee the country.
Financial pyramid schemes from the early days of perestroika, such as Vahid Bank with its unbelievable
rate of interest, or Minaret Group, which planned a fraud with privatization vouchers, have quickly
disappeared. Another example is the group of swindlers who earned a lot of money on the so-called
“beads swindle”. Recently, a band of swindlers has repeated this swindle and was caught, in Bishkek.
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Company’s intellectual property
38
Beads Swindler is Arrested, Echo, 19 June 2003