Monday, August 24, 2009

The Importance of Philosophy to a Successful Business Career

Understanding the broad abstractions of ethics and epistemology can instill confidence in one’s work life. Such understanding is especially helpful in a business career, not for the purpose of preaching to co-workers, employees, or customers, but to maintain clear thoughts about what is right and wrong in decision making and to correctly perceive facts in complicated situations.

Most ethical issues in business center on honesty. For example, a boss might say to a young worker, “Tell the customer it’s on the truck,” when in fact the order has not yet been processed. The assumption is that the company will scramble to get the order on the truck before a major delay occurs and customer dissatisfaction results. The problem with this stretching of the truth is that as days, weeks, months, and years go by it often gets stretched further and further from reality leading to “what the customers don’t know won’t hurt ‘em.” This can eventually culminate in an Enron or Bernard Madoff scenario. Such is the importance of honesty in a business career.

Telling the truth is the simplest solution to business problems even if it results in being yelled at or temporarily losing business. It is far better than living a life of fakery. The tricky part about honesty is that lying and dishonesty are not the same. Honesty does not require truth telling under threat of force. A misdirection lie to deceive a potential thief of the whereabouts of your money is quite honest and moral. Everyone has a right to self-defense. Everyone also enjoys a right to privacy—no one, for example, has a right to your financial situation. A negotiator might ask, “Tell me the truth. What is your rock bottom price?” or “Is this [specific amount] your final price?” You may properly respond evasively or with an incorrect specific price. This is not game playing or bluffing; it is sound, ethical decision-making.

Bribery is an omnipresent issue in the press and in discussions of business ethics. It also is an issue of honesty—because of the deception that occurs—but it is compounded by its similarity to a number of other concepts that it too often is not differentiated from. Epistemology, particularly the theory of definition, can help clarify this.

Most bribes involve a payment of money or offer of gift to influence others. But so does a perk, a grease payment, extortion, subornation, and a commission or broker’s fee. And then there is the gift of candy to children, often called a bribe, to get them to clean their rooms. How are these to be distinguished from each other? The rules of definition say that our concepts must be classified in terms of genus and differentia, that is, concepts must be put into a broad category first, then differentiated from the other items that are similar to the one being defined. This is the situation we have with bribery.

The genus of all the concepts in the previous paragraph is a payment or gift to influence others. The differentia of each does the clarifying. A perk is an above-board prize that accompanies one’s job, such as a tip or company car. “Above-board” means it is not covert or secretive. A grease payment is a modest incentive to induce foot-dragging bureaucrats to perform their normal duties. Extortion is a demand for payment under threat of force, whereas subornation is a covert payment to persuade someone to ignore or violate the law, rules, or one’s ethics. A commission or broker’s fee is payment for a job well done, such as a closed sale. The candy given to children? It’s just an incentive to action. To call it a bribe is metaphorical extension of the original concept.

So what is a bribe? Most similar to subornation, it is a covert payment designed to undermine a relation of trust. A sales rep, for example, offers an extra payment to a buyer, unbeknownst to the owner of the buyer’s company, in exchange for a contract. The deceit and breach of trust occurs by cheating the owner of the buyer’s company. Bribery is a precise concept that should not be slung around lightly and applied to all of these other actions. It is a specific type of unsavory behavior that, when not understood clearly, becomes applied to and confused with decent, respectable outcomes, such as perks, commissions, and parental management of children. Such is how philosophy, particularly epistemology, can parse complicated issues.

The resulting clarity inspires strength and conviction that paying a perk, commission, or maybe even making a grease payment are not unsavory behavior.

The most important place in which philosophy can instill confidence in one’s work life in business is in the understanding of self-interest as moral and in the guiltless acceptance and promotion of the profit motive of capitalism. For a wealth of resources on these issues, I refer readers to the works of Ayn Rand and Ludwig von Mises.

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