Lies of the Land
Talking David Mamet, business ethics and real estateBusiness Roundtable, Spring 2009 | Comments | Print |
On January 23 the Vanderbilt Executive MBA program sponsored a staged reading from Tennessee Repertory Theatre’s production of Glengarry Glen Ross, the Pulitzer Prize-winning play by David Mamet. The play tells the story of four desperate Chicago real estate agents who are willing to engage in any number of unethical activities to sell undesirable real estate to unsuspecting buyers. The title of the play comes from the names of two of the real estate developments being sold by the agents: Glengarry Highlands and Glen Ross Farms.
Following the reading there was a panel discussion on the topic of ethics in business. The panelists were Richard Courtney, Principal Broker for Fridrich & Clark Realty in Nashville and author of Buyers Are Liars & Sellers Are Too!; Bart Victor, Cal Turner Professor of Moral Leadership; and Bruce Barry, Brownlee O. Currey Jr. Professor of Management. The discussion was moderated by Megan Barry, MBA’93, Vice President of Ethics and Compliance at Premier, Inc. and Council Member At-Large, Metropolitan Nashville and Davidson County.
In Act I, Scene 2, two of the real estate agents—Dave Moss and George Aaronow—are complaining about Mitch and Murray, the owners of the agency. Moss and Aaronow have just been informed that the top two sellers in the office will get to keep their jobs and the other two will not. Moss suggests that they get their revenge by stealing the Glengarry leads and then selling them to another real estate agency. His plan would require Aaronow to break into the office and stage a burglary. Aaronow wants no part of the plan, but Moss intimidates him, saying that Aaronow is already an accomplice simply because he listened to the idea.
MB: Well, Richard, let’s start with you since this is your business. What are your thoughts? Does this happen?
RC: It happens sometimes, perhaps more on the Internet, but certainly never in an office like ours.
MB: Bart, you talk about ethics, deception and lying with your students. What are those conversations like?
BV: Some of our students are coming from experiences like this and trying to find a different way to live their lives as businesspeople. I think David Mamet does a wonderful job of helping us understand how a situation like this can happen. The scene shows how we all can find ourselves thinking abstractly about something we would never do in real life.
MB: Bruce, clearly this is a negotiation between two parties. Is this the kind of negotiation you teach?
BB: One of the principles of my negotiation class is that virtually everything is negotiation. Negotiation is defined as joint decision making involving two people, or more than two people, when they have divergent risks and preferences and a matter of contention. So, yes, this is a negotiation. If I had shown this scene to my students and asked if something like it had ever happened to them, they would say, “No, I’ve never had someone try to persuade me to engage in robberies.” But there are cases and scenarios where the underlying dynamic is there. That is, one person persuading another, or an organizational culture indirectly and informally persuading an individual to engage in actions that may not pass ethical scrutiny if the right lens is applied. Ethical dilemmas sort of creep up on you, but Mamet’s put it right in our face. It stands in for a variety of situations, where a culture is persuading or enticing you to do things that seem okay step by step, but at some point you realize you’ve been asked to cross a line.
RC: I think that’s part of the reason why we’re having the financial problem in real estate. Loan officers sit with a buyer and say, “You make $30,000 a year, right?” The buyer responds, “No, I make $20,000.” The loan officer then says, “Well, if you want this house, you make $30,000, and you don’t have any debt.”
Corruption is fairly prevalent in the business community, but hopefully things are changing. There are more regulations now on the horizon. Of course that means there will be more rules to break.
~ Richard Courtney
MB: Are there ethical consequences when you have deception? Richard, in your book you mention that everybody is a liar. Is deception just a component of how we do business?
RC: There is a difference between a real estate agent and a realtor. The difference is ethics. Realtors are required to take ethics classes every year. There’s a perennial education requirement. At least we’re exposed to it and know the difference between responsible and irresponsible behavior.
MB: Let’s say I’m selling my house. You walk inside and notice there are some flaws and obvious problems. Do we have to tell the buyer?
RC: We do. In Tennessee we do.
MB: So it’s all relative? It depends on where you are?
RC: If you’re in Washington, D.C., for example, you never have to tell anyone.
BV: In this scene we’re not talking about something that is in any way ethically ambiguous. They’re plotting a crime. So the question is: How did they get themselves into this situation? I think there’s a red herring that we rely on too easily. It’s the notion of greed. There are greedy people out there in the world, of course, and there are sociopaths like Bernie Madoff. But most crime, particularly in the context of the way we live our normal lives, is not motivated by greed but by exactly what these folks are struggling with—the sense that they are powerless. The crime is a way to regain their power and freedom. There’s a lot of talk about being free and seizing control back from the people who have taken it away. It becomes a crime motivated by freedom, and that’s far more powerful.
Ethical dilemmas typically creep up on us. There are a variety of situations in which a culture persuades or entices us to do things that seem okay step by step, but at some point we realize we’ve been asked to cross a line.
BB: I was teaching a class the other day in which we debated who was more at fault in this current housing crisis. Was it the borrowers or the lenders? The debate was an intellectual exercise because there weren’t really any great consequences to public policy, but it was interesting to have students argue both sides. In this case the debate would be similar. Who’s more at fault: the person doing the enticing or the person being enticed? In all kinds of transactions like this, it’s easy to say that they’re both at fault, but that’s not very satisfying. We want to know who really is responsible here and want to sort out that responsibility. That’s one of the things we try to do when we teach this subject. It’s hard because you talk about it for 80 or 90 minutes in class but don’t really resolve anything.
Audience: There’s an interesting sequence of events going on here. We go from the hypothetical of the enticement to the actual enticement. Could you comment on the progression of this conversation? I think it’s illustrative of how people are enticed into perpetrating a crime.
BB: In a class I teach, we talk about shades of gray and lying. There’s puffery versus deception versus sins of omission. You can put them on a continuum from mild to exaggerated, but I’m not sure I’ve ever had a class talk about the question this scene raised, which is this idea of enticement and how that varies from very mild to coercive.
BV: A couple of years ago I had the opportunity to bring a mobster into the classroom. He had been to jail for various business-related crimes. He claimed that he was never the originator of these crimes. The crimes were always brought to him by businesspeople who felt they had been cheated. They weren’t seeking greed so much, but rather to right a wrong. It was in the righting of that wrong that they found justification for all sorts of things. The mobster said that the most powerful attraction to criminality was a sense of having been cheated or abused.
RC: We see this sort of enticement in the homebuilding industry when a builder owns three lots and he borrows a certain amount of money to build a house on lot A. When that house has overruns, he borrows money from house B to finish house A. Then he can’t finish B until he goes to C. Finally when C is about halfway done, he still hasn’t paid for A or B. Meanwhile the lender decides he wants to play, too. So he keeps loaning the builder money.
MB: It sounds like all of you are talking as if everyone is morally corruptible. How can people stay morally right if we’re inherently corruptible? How do you teach that at a workplace?
RC: Corruption is fairly prevalent in the business community, but hopefully things are changing. There are more regulations now than there were two years ago, and there are more on the horizon. Of course that means there will be more rules to break, so we might have a new set of ethics problems to come.
BV: When I teach ethics, I don’t ever go into the classroom expecting to tell them something that they don’t already know. It’s about providing the opportunity for them to strengthen their own resource, whatever that resource might be, so that they have it available when they find themselves pressed, confused or tempted. I think our approach in education is to give students tools and experience that will serve them in conversations like the one in this scene.
BB: I don’t go in the first day saying that the purpose of the course is to give students a moral center that they don’t already have, but rather to help them understand the moral content of the circumstances they may find themselves in. It’s a hard thing to do. It’s done a lot by example, but I think that’s the modest, but realistic goal.
Audience: How do the two of you with your students and you with your salespeople teach that the ends don’t justify the means?
RC: It’s become a dilemma more so recently as times have gotten harder and people are trying to make the deal work. Each real estate transaction has gotten more difficult. There’s more emphasis on disclosure and defining, for example, what a leak in a basement is or what a leak in a roof is. The other side of it is that we may, for instance, get a structural report from one engineer who says everything is fine and another from one who says the house will fall down in two weeks. Which one do we use, and why is one better than the other? Should we necessarily disclose the bad one if we think the good one is better? So there are a number of issues that face realtors on a daily basis that make our jobs more complex than they’ve ever been.
BB: Just a quick comment about that. I think the fact of the matter is that in reality it’s not that the ends don’t justify the means. It’s that the ends rarely do. It’s not that hard to conjure up situations where the ends do justify the means. What I try to get students to think about is the underlying principle driving their decisions. Is it a principle of fairness or harm or equity or justice? And is this the same principle that they always use? Or is this a principle they use only when it’s convenient because the principle produces the outcome they want in that particular situation?
Audience: This play debuted in 1984, and here we are in 2009. What has changed in the last 25 years as far as ethics are concerned?
RC: It could have been written 100 years earlier, and I think it would be just as timely. Overall, at least in the real estate industry, there is more and more training and there is more and more emphasis on ethics. It’s becoming increasingly difficult to be unethical with all of the scrutiny that every transaction has to undergo.
BB: In business and industry, I’d suggest that there’s been over these 25 years a substantial increase in the codification of ethics. Megan here has a corporate job as an ethics compliance officer, and that position virtually didn’t exist 25 years ago.
MB: It’s great work, and there’s a lot of job security.
BB: The licensed and credentialed professions, like law and medicine, have long had components of ethics in their examinations and licensing. Business, aside from accounting and some financial occupations, doesn’t have licensing. There’s no bar exam for our graduates. There’s no course in professional responsibility at business schools the way there is at law schools. But what we’ve seen in these 25 years is a codification and institutionalization of an ethics function in organizations. Now the logical follow-up question would be: Has that changed anything in terms of the ethical behavior of humans? I just don’t know.
photo credit: Steve Green