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Tuesday, January 22, 2013

Armstrong & the Moral Compass: A Business Analogy


By: Peter J. Lamont, Esq.

Everyone knows by now that Lance Armstrong has finally admitted to using performance-enhancing drugs and lying about his use.  Let’s ignore for a second the ethics behind whether or not performance-enhancing drugs should be used by elite athletes. Instead, let’s look at Lance Armstrong as a theoretical business entity and analyze the moral and financial implications of his lies on his “company” and on his "clients, customers and investors."

Before we begin, it is important to understand that we are not talking about any actual business entity that Lance Armstrong may own. Rather, we are veiwng Armstrong the athlete as if he was a business.

As a business entity Lance Armstrong has perpetrated fraud against his "customers, board members, investors and shareholders."  His wrongdoing goes far beyond his use of performance-enhancing drugs. Worst of all are his intentional fabrications, the bullying of those who spoke out against him and his blatant disregard for any guidance offered by his moral compass. It is relatively safe to assume that Lance Armstrong would not have “come clean” if he hadn’t gotten caught. 

Continuing with the analogy of Lance Armstrong as a theoretical business - He essentially stole from his shareholders and intentionally misled his consumers. He had no intention of telling his consumers that he was misleading them.  He was content taking consumer’s “money” and build his brand through intimidation and fraud while all along knowing that his actions were improper. 

Let’s look at this another way. Say that a consumer purchases a food product. The manufacturer intentionally misrepresents ingredients to sell more of its products.  Eventually, the manufacturer gets caught and comes clean that he had lied about the ingredients in the product. How does the consumer feel? Typically the consumer feels angry and will no longer purchase products from the company.  The anger generally stems from having the wool pulled over your eyes.  In other words, the consumer is angered by the manufacturer's lack of respect for the consumer 

Conversely, instead of intentionally lying about the product the manufacturer actually makes a mistake.  The ingredients are misrepresented but it was purely accidental. When the company finds out that a mistake was made it immediately comes clean and asks for forgiveness.  As consumers don’t we feel differently about that company now?  Would we continue to purchase products?  If so, why?  If we do, isn’t because of the moral and/or ethical way in which the company acted?
 

So back to Lance Armstrong - As a “business”, he was content to continue perpetrating his lies until he got caught.  Is this how the majority of businesses in United States are being operated? Are businesses lying until they get caught?  What about a moral compass? People should have them. Shouldn’t a business have one as well?   Don’t businesses owe a duty to the consumers, clients, investors and shareholders to operate in a moral and ethical manner?  What do you think?

As a business, what can you do right now to refocus your company’s efforts in accordance with your own moral compass? 

Weigh in on these issues.
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