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Lying in Business: Insights from Hannah Arendt’s ‘Lying in Politics’

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  • Eenkhoorn, P.
  • Graafland, J.J.

    (Tilburg University, Center for Economic Research)

Abstract

The famous political philosopher Hannah Arendt develops several arguments why truthfulness cannot be counted among the political virtues. This article shows that similar arguments apply to lying in business. Based on Hannah Arendt’s theory, we distinguish five reasons why lying is a structural temptation in business: business is about action to change the world and therefore businessmen need the capacity to deny current reality; commerce requires successful image-making and liars have the advantage to come up with plausible stories; business communication is more often about opinions than about facts, giving leeway to ignore uncomfortable signals; business increasingly makes use of plans and models, but these techniques foster inflexibility in acknowledging the real facts; businessmen fall easily prey to self-deception, because one needs to act as if the vision already materializes. The theory is illustrated by a case study of Landis that grew from a relative insignificant into a large organization within a short period of time, but ended with outright lies and bankruptcy.

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Bibliographic Info

Paper provided by Tilburg University, Center for Economic Research in its series Discussion Paper with number 2010-75.

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Date of creation: 2010
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Handle: RePEc:dgr:kubcen:201075

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Web page: http://center.uvt.nl

Related research

Keywords: Lying; deceit in business; Hannah Arendt; image-making; self-deception; accounting fraud; politics and business; Landis;

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  1. Oriol Amat & John Blake & Ester Oliveras, 2000. "The ethics of creative accounting: Some Spanish evidence," Economics Working Papers 455, Department of Economics and Business, Universitat Pompeu Fabra.
  2. Agrawal, Anup & Chadha, Sahiba, 2005. "Corporate Governance and Accounting Scandals," Journal of Law and Economics, University of Chicago Press, vol. 48(2), pages 371-406, October.
  3. David Owen & Tracey Swift & Christopher Humphrey & Mary Bowerman, 2000. "The new social audits: accountability, managerial capture or the agenda of social champions?," European Accounting Review, Taylor & Francis Journals, vol. 9(1), pages 81-98.
  4. Peter Fleming & Stelios C. Zyglidopoulos, 2008. "The Escalation of Deception in Organizations," Journal of Business Ethics, Springer, vol. 81(4), pages 837-850, September.
  5. Wiseman, Joanne, 1982. "An evaluation of environmental disclosures made in corporate annual reports," Accounting, Organizations and Society, Elsevier, vol. 7(1), pages 53-63, January.
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