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Reputation and Conscience

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Motivating ethical behavior by appealing solely to benefits and avoiding costs is inappropriate. After all, the average annual income for a lifetime of car thievery (even counting years spent in prison) is large—so it seems that crime does pay. If income were all that mattered, most of us would switch into this lucrative field. The business world features enough cheats and scoundrels to offer any professional the opportunity to break promises, or worse, for money. Ethical professionals decline these opportunities for reasons having to do with the kind of people they want to be. Amar Bhide and Howard H. Stevenson (1990) write, “The answer lies firmly in the realm of social and moral behavior, not in finance. The businesspeople we interviewed set great store on the regard of their family, friends, and the community at large. They valued their reputations, not for some nebulous financial gain but because they took pride in their good names. Even more important, since outsiders cannot easily judge trustworthiness, businesspeople seem guided by their inner voices, by their consciences…. We keep promises because it is right to do so, not because it is good business.”8

The reflective practitioner will summon more reasons, or more interesting variations on these. Other writers—see, for instance, Carroll (1999) and Kidder (1997)—give explanations generally rooted in the expectations of society and the self-interest of firms.

Applied Mergers and Acquisitions

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