The Honest Truth About Dishonesty by Dan Ariely

Alliances Essay

Introduction

How would you act when you have to make a major business deal where three firms are all competing in bi-lateral business where only two companies can make a deal? That situation was brought up with the alliance exercise we participated in for our business ethics class. For me it showed a lot of people who were quick to always choose the ethical thing in public, had no problem being unethical as long as their dirty laundry wouldn’t really going to get aired publically. It was humbling in a sense to see this exercise in action because it didn’t go as expected for my group, however I did learn a lot in how people communicate. Going forward I think it was important to take with me some of key things. Never underestimate the people around you, I had some smart teammates and I felt the other groups were very smart too. I also went into the exercise in a bad mood because I had recently found out I only did the first page of the fudge factor test, which was upsetting because I threw away marks I could have had. Going in with a good, positive attitude is important for having success in these business meetings, and with my attitude and mind thinking about other things I wasn’t the best asset to my team.

 Making a deal was not only beneficial to your team, but was also important to the opposing groups because bonus marks were on the line. The goal of the exercise is to strike a deal with one of the other two groups, the stipulation being that the split of the profits aren’t allowed to be a 50-50 split, instead one group had to benefit more than the group they made a deal with. This in a way forces there to be an overall winner, a semi happy second place group, and finally a group that loses out of the deal. Group A also had an exceptional advantage because they were given a hypothetical government subsidy allowing them to have an extra 10% of the profits possible to split. This created a power imbalance benefiting Group A because the subsidy gives them extra bargaining power for the exercise. Each group got three, two minute meetings with each of the other groups where they could discuss a possible deal that could be made. Groups were allowed to say almost anything as long as they didn’t promise outside gifts or bribes. It was a fun experience, and it was interesting to see people who often thought highly of their ethics to act in such unethical ways.

What Fudge Factors Tempted Rational Students to Engage in Unethical Behavior

        The book “The Honest Truth about Dishonesty” by Dan Ariely goes into great detail about how and why people act dishonestly or unethically at time. When given the opportunity to lie or withhold information for personal gain, like the opportunity each group had during this exercise, we see that people often take advantage of this opportunity to put themselves ahead a little bit. Now when we are dealing with educated and rational people, but they will still take the chance if it can put them and their group ahead of another group. There were three main fudge factors that I thought could relate to the behaviors I saw throughout the alliances exercise. The three fudge factors were the Madoff condition, cheating as an infection, and