Examine the ethical line of lying in business

People aren’t supposed to lie … yet almost everyone does it at least once in a while. Most Americans lie twice a day.

Entrepreneurs are no different from others when it comes to lying. They all do it at least sometimes.

“Everyone lies at one time or another,” according to Jonathan Appel, professor, Department of Behavioral and Social Sciences at Tiffin University. “If someone states they never have lied — they are most certainly lying.”

Entrepreneurs have been known to lie when it comes to projecting future success of their businesses to potential investors. They say their companies are bigger than they are, that they are more qualified than they are, or that they can do accomplish something they can’t. They see an opportunity and lie to take advantage of it.

But where is the ethical line? It is difficult to know, especially because entrepreneurs often don’t see what they’re doing as lying. They often think what they are doing is OK to help their business.

The motivation behind the lie matters. Lying just for personal gain or for the sake of lying is not acceptable. But often, entrepreneurs do it for what they see as the greater good. Stretching the truth when talking to a banker about a loan or trying to make a sale may be viewed as saving the company — the company that feeds the entrepreneur’s family and the families of the employees of the business.

The level of potential harm influences whether to lie. As with others, entrepreneurs may believe there is no harm in telling some types of lies. White lies often are defined as those told with good intentions. Appel refers to these as “normal lies” that are told to avoid the consequences of telling the truth and may be used to spare someone’s feelings.

Studies show that innovative, creative people, such as those who often become entrepreneurs, lie more than most. Well-documented stories are told about how lying helped Apple’s Steve Jobs and Oracle’s Larry Ellison get started.

In business, a certain amount of lying is expected. Most people have lied on a resume or in a job interview sometime in their career. People use sick days at work when they really aren’t sick.

The concept of negotiation is based on lying. Each side starts with a position that it knows is not realistic. Shoppers know the sticker price on a car in a dealership is not the price they have to pay.

Marketers are not known for always telling the truth, either. Early in my academic career, I wrote a number of articles on the concept of puffery — exaggerated statements made by marketers that may not be true — but are difficult to prove as false.

When a local radio station used to say it played “the music you love” I was quite sure they were lying to me. Puffery is accepted in marketing because most people are exposed to it all time and it does not mean anything to them.

People need to be careful of those who say they never ever lie. They are deceiving themselves. Not all lies are immoral. It is considered being social to dole out an occasional insincere complement.

On the other hand, lying can be dangerous. Successful companies are built on earning trust from their customers. Lying and especially getting caught in a lie, can destroy that trust.

“It would be important to assess a person in any career field for the depth and breadth of lies one tells to ascertain whether it is ‘normal’ lying or represents a pattern of lying that is pathological” according to Appel.

Perry Haan is professor of marketing and entrepreneurship at Tiffin University. He can be reached at (419) 618-2867.