Ethics in Business (and Life)

by Mr. Cheap

Welcome to Money Smarts! If you're new here, please read the "About" page to find out more about this site. If you would like to receive updates by email then sign up here or you can subscribe to the RSS feed. Thanks for visiting!

I was surprised that the part of my post about negotiation on Tuesday that drew the greatest number of comments was “It’s a really scummy thing when people do this to you, and it’s just as scummy if you do it to them” in relation to dirty tricks pulled by car dealers (and my advocating that you shouldn’t try to pull dirty tricks back on them).  It was especially surprising, as I’d put a teaser in the post that I expected to get SOMEONE to ask for details about:  “There are ethical ways that you can get a fair deal from a car dealership which are far more likely to work.”  Commenters seemed to be more interested in pulling a dirty trick on a car dealer than on getting a better deal!

Rather than turning the comment section into a back and forth where people repeatedly assert what they feel is “right”, in this post I’m hoping to outline the reasons why I made that statement, and the limitations of the other perspectives offered. I’ll be using this definition of values, morals and ethics in this post.

In “Zen and the Art of Motorcycle Maintenance” Robert Pirsig makes the assertion that ethical codes are used to judge and attack OTHER people, and aren’t used to guide the behaviours of the group itself (as it’s a codification of things all members of the group already understand).  Whether it’s hippies (calling other people “squares”) or Victorians the code’s purpose is to attack.  Hopefully I’ll avoid doing that here.

I find the golden rule (“Do onto others as you would have them do onto you“) to be a fairly good guiding principle that fits well with my values.  I’m a fairly empathic person, and can usually see things from other people’s perspective, such that if I treat someone badly it really makes ME feel like crap.

I’ve jokingly suggested to friends a modification to this rule: “Do onto others as you would have them do onto you.  And assume other people follow the same rule.”  What this twist lets us do is assume that how people treat us is how they WANT to be treated, and allows us to take revenge as long as it’s poetic justice:  we wrong them in the same way they wrong us, but with the deliberate misunderstanding that they desire for this to happen.

A number of comments seemed to base their perspective on similar ideas.  “Car dealers try to pull dirty tricks on customers, so its OK for us to do the same thing to them.”  I think this is the wrong way to approach the situation for a number of reasons.

  1. This is how feuds start.  You retaliate against them, car dealers (and their salesmen) justify their actions as saying “see, the customers are doing the same thing to us!” and they start using even dirtier, more unethical approaches.  Eventually the entire marketplace becomes so disreputable that it collapses.  As has been written about before, I think this change is happening for real estate agents, and I suspect car dealerships will increasingly adopt a “no haggle” policy (as Saturn has done) as the Internet allows sale prices to become increasingly easy to determine.
  2. This can bleed over into other negotiations you enter where the other person *IS* behaving honourably.  Once you’ve seen that you can use the dirty trick to get a good deal, the temptation will be there to use it more often.  As my friend got used to doing it in real estate deals, and eventually attacked me with the same trick.  “Once you start down the dark path, forever will it dominate your destiny, consume you it will…
  3. It harms YOU when you behave badly.  There’s a group of Internet videos which are of people torturing Tickle Me Elmos (such as dowsing him in gasoline and burning him while he dances and sings).  This doesn’t hurt the doll in any way (it’s not alive), however it DOES harm the torturer.  “The point isn’t whether it’s an issue for the creature. It’s what does it do to us.”  Serial killers usually get started torturing animals, in situations like this I think the toy is clearly a proxy for an animal or something that COULD experience pain.  Whether torturing animals contributes to eventual criminal behaviour or is an early sign of underlying issues is a debatable point, but I think it’s fair to say bad behaviour often leads to more bad behaviour.

jesse made the comment “So what is negotiation but extracting more money from the naive?” which I HOPE implies a misunderstanding on one of our parts.  My view of negotiation is it’s a “dialogue to resolve disputes“.  We’re negotiating with our partner when we argue about who should wash the dishes or change the baby’s diaper, and we’re negotiating with a car dealer when we disagree about the price.  To view negotiation as a method for preying on the “naive” and making their (probably already pretty bad) lives worse to benefit ourselves is a remarkably callous approach to life.  This attitude could result from someone who has been forced into a job that requires them to prey on unsophisticated buyers (and they adopt this attitude so they can live with themselves).  In such a case I think they should immediately quit and find a new way to earn a living as their current profession is causing them significant harm.  If they’ve come to this belief on their own, sadly I think they’re defective as human beings, and I can just about guarantee that there will be unhappiness that results from this in their future.

Be Sociable, Share!

Want to learn more about RESPs? Buy The Book:

Resp-Book

The RESP Book: The Simple Guide to Registered Education Savings Plans

Everything you need to know about RESPs.

See it on Amazon now

Welcome to Money Smarts! If you're new here, please read the "About" page to find out more about this site. If you would like to receive updates by email then sign up here or you can subscribe to the RSS feed. Thanks for visiting!

{ 6 comments… read them below or add one }

1 Four Pillars

I get your point about not doing things you wouldn’t want done to yourself.

As for the “checking with my manager/spouse” tactic – I don’t see anything wrong with that tactic, whether I do it or a car dealership does it.

Now if you are going to do a Jack Bauer and hold the salesperson’s family hostage to get a better deal – that’s going too far.

The problem is where do you draw the line? Is it ethical to bargain at all? Aren’t you depriving the poor, hard-working salesman money for his/her family when you do that?

2 tom

“jesse made the comment So what is negotiation but extracting more money from the naive?

I actually agree with this comment because if people weren’t so naive, we wouldn’t need courts, lawyers, laws, rules, etc.

This is essentially how most people struggle, hence why 5% of the world, owns 95% of the wealth. The challenge is to keep going, learning from the mistakes and always asking questions and aligning it with your goals/needs.

3 Mark

I was reading this post this morning with a grin and a smile; my wife & I sold our condo yesterday night & the couple started on a path that I felt didn’t convey a respect for the both of us…
Their first offer was 15K lower than what I had listed. My wife almost blew a gasget when she first heard them…
I believe I’m a great negociator but this time kind of threw me a bit off guard; I asked them in reply how they got to that figure, considering they knew my asking price?
The reply they gave me gave me the edge I needed: their bank had only authorized that amount to them…
As an ex-bank manager, I can tell you right away that you don’t walk in your bank asking for a mortgage pre-authorization less than the asking price of the house you’re planning to buy – even if you know that they will lower the price – it gives you that latitude to work with.
Long story short, I did get the price I had in mind (well, to be honest, I’m out 1K) AND sold them my 4 appliances…
I still believe that whatever attitude you reflect will be perceived by the party sitting in front of you BUT if they have a “I’ll screw you bad” attitude, I’m sorry to say that all barriers are down & I’m in for the kill as well…

4 Mr. Cheap

Mike: I definitely believe it’s ethical (and necessary) to bargain, ESPECIALLY with car salesman. The only problem I have with the “I need to check with my spouse” is when you DECEIVE the person it believing that you’re the sole decision maker, then change the game at the end. To me this is withdrawing an accepted offer, which I’m against. If you told the salesman from the start “my wife will need to sign off on this before we agree on anything”, I’d have no problem with that approach at all.

Rob: I’ve had enough discussions with people where we’ve spent FAR too long disagreeing about something, just to realize we used different definitions for the same words and that was the source of our disagreement. Now I try to early on establish what it is I’m actually talking about.

tom: You make a good point and its somewhat related to something I’ve thought about posting on. By protecting the “naive” in our society, we allow them to protect their innocence. If there wasn’t any protection for them, they’d quickly be taken advantage of and learn to be far more suspicious. One problem with such a society is that EVERYONE is going to be VERY suspicious of everyone else. You’d only do business with people you knew well and, as Rob makes the comment, it would become very difficult to execute most transactions without some trust. I’m not sure that’d be a better world to live in.

Mark: Good for you for not storming off on them and continuing the negotiation. I have no problem with low ball offers (giving or receiving).

5 Four Pillars

Mr. Cheap – I don’t think you have to wait until there is a done deal before “remembering” you have to check with a spouse – just get the deal to a good spot (but not finalized) and then play the spouse card.

Trust me – if you ever buy a new car then you will be changing your tune pretty quick! :)

6 Quietrose

I recently bought a new car and I was not looking forward to the process. But, I needed a new car badly so it was time to decide on the car I wanted. I shopped around and found the car I wanted. I emailed several dealerships and asked for their best price OTD (out the door) on the model I wanted. I made the dealerships work for my business by giving me the best deal that they could. I was serious about buying (within 10 days of beginning my search). I did my research and made a reasonable offer. One dealership gave me, not only the best deal, but was so polite and sincere, that they ultimately got my business! I recommend them to anyone who needs a car now!

I tried to act ethically and responsibly on my part. I know that no dealership is going to sell a car below what they need to earn on the vehicle, like some dealerships tried to convince me they were doing to give me their best price. I was not born yesterday! The dealership that earned my business was the one that treated me with respect, honesty, and sincerity. I acted ethically and in my mind, so did they!

Leave a Comment

Current ye@r *

Previous post:

Next post: