Goodwill versus Manipulation

It has been reasoned that when a person undertakes a unilateral action for the benefit of another party, he seeks to increase his goodwill in the context of a relationship, or his esteem outside the context of a relationship, thereby making others more inclined to regard him as a "good" person and less resistant to the notion of entering into a relationship that benefits his interests. But does this mean that the notions of goodwill and esteem are wrong or evil, or that a person who seeks to establish a positive reputation has sinister motives for doing so?

Not necessarily.

The notion of "society" is a complex web of connections and relationships among individuals who become, to some degree, dependent on one another. The notion that ethics is important at all derives from the function of ethics in guiding human interaction in the context of society. In this sense, establishing a positive reputation is a means toward facilitating the entry into relationships, is a means toward establishing relationships, is a means toward participating in relationships, is a means toward establishing and preserving society itself. It is therefore socially beneficial for an individual to pursue the self-interested objective of seeking to gain esteem and thereby improve his reputation.

However, a line is drawn between a genuine interest in improving one's esteem and performing an action that is used to obligate others to act in one's own benefit in a direct and specific way. The former is regarded as goodwill, the latter as manipulation.

It is noted that a relationship is based in mutual obligation, and mutual consent. A manipulative individual seeks to convince another person that they are in a relationship, even though the other party has not consented to participate, nor have they been in a position to negotiate the terms of that relationship, or of the exchange. It is most common, in instances of manipulation, for the manipulator to perform some trivial act at minimal cost to himself and demand, in return, that another party undertake considerable effort to repay the favor.

In the strictest sense of ethics, an individual is not responsible for fulfilling any unspoken expectation of others, but is held responsible for acting upon the communicated expectations of others in the context of a consensual relationship or mutual obligation. And so, when a person is the subject of manipulation, they are within their right to ignore the insistence of the other party that an obligation that was previously unspoken must be fulfilled due to the unsolicited action they have taken.

However, the act of presenting a demand for compensation is ethically separate from the action performed for the benefit of others. The original act that was done for the benefit of other parties is not inherently unethical, even if it is done with the specific motivation of benefiting one's own reputation or esteem, as it is taken for granted that an individual is expected to act in their own interests, and they are entitled to do so. But when that action is used as a rationale or justification for demanding that another party enter into a relationship, as a means of negating the voluntary consent, this demand (but not the original action) is unethical.

As such, an action undertaken to generate goodwill cannot be categorized as unethical - it may be considered ethical, or at worse, it can be considered to be ethically neutral.

Charitable Action and Esteem

In the context of relationships, there arose the notion of gratuitous action: an individual undertakes an action for the benefit of the other party, while having no expectation that the other party would undertake any action in return. However, the topic was set aside, as it is not unique to relationships: there are charitable actions performed for the benefit of others outside the context of a relationship as well.

The motivation to act in the benefit of others was previously matrixed against the motivation to act in self-interest, arriving at the classification of such actions as benevolent (the actor also benefits), charitable (no appreciable consequence to actor), or altruistic (the actor suffers harm).

In the context of a relationship, an action that benefits the other party is done for the sake of strengthening the relationship - and the relationship being of value to the actor, an action that might be characterized as charitable or altruistic could be argued to be merely benevolent, in that the motivation of the actor in providing an unsolicited benefit is to gain for themselves the preservation or reinforcement of a valued relationship.

Outside the context of a relationship, the same argument may be made: a person who acts for the benefit of others may not gain an immediate benefit for himself, but his service of another party gains their favor and thus increases the likelihood that the other party will be inclined to enter into a relationship with the actor in the future.

Even when a relationship with the benefactor of an action seems improbable, there remains the notion of esteem: a person who acts to benefit others without an apparent benefit to himself is seeking to improve his reputation as a "good" person, hence increase the likelihood that others will be inclined to enter into a relationship with the actor in the future.

This is clearly the motivation of conspicuous acts of charity: when a business performs charitable acts, it takes measures to ensure that these actions are publicized in order to gain the benefit of esteem. The same can be said of any individual whose charitable action is overt - the motivation to be charitable is to gain the benefit to their personal reputation as a means of increasing their esteem.

As such, any overt act of charity or altruism is not selfless, but is performed in self-interest, even though the benefit to self may be vague, will not be realized immediately, and may not be realized at all. The motivation of a charitable person is to gain esteem, a line of credit that they may draw upon in future.

It's noted that, in order to generate esteem, an act of charity or altruism must be overt. If no-one is aware of a charitable act, it produces no esteem for the actor. It could be argued that an anonymous act of charity is "truly" charitable, as the actor gains no benefit, or it could be argued that even an anonymous act of charity is done for the sake of self-esteem or self-actualization.

I don't intend to explore the notion of anonymous charitable action further. Since it is internal to an individual, its would seem to be of little relevance to social ethics.

Nature of Relationships

There are many kinds of relationships, each of which has its own nature. Even relationships of the same general kind may entail different responsibilities in different instances. So deriving general principles of ethics that apply to all relationships between all parties is complex and any conclusion would be wrought with inaccuracies. However, there seem to be some basic principles:

Primarily, relationships entail a sequence of transactions between two parties, as previously considered. In some instances, the serial transactions and the recurring obligations that arise are the only basis for the relationship, and the only responsibility of one party to another.

On the opposite end of the spectrum, a relationship may be based on a general notion that does not yield a definite and specific course of action: parties may enter into a relationship in which each is expected to act in the interests of the other, without a clear indication of what actions may be necessary in future, or which interests they are expected to serve, or what situations may arise, etc.

The more the two parties communicate their expectations, the clearer the course of action that each party must undertake to preserve the relationship. The notion that one party should understand, without communication, the expectations of the other, is the source of much debate and strife - though from an ethical perspective, a party is held responsible only for fulfilling those expectations of which he is aware. This is derived from the nature of a single transaction.

It's worth noting that a given culture may attempt to define the nature of certain relationships - that in a given country, religion, or group of people, a term such as "marriage" defines the terms of a relationship - but even this is mutable. Not all cultures define "marriage" in the same way, nor does every individual within a culture have the same understanding of the concept. It seems to me that deference to a cultural definition is not an acceptable substitute for communication, and that in entering into a relationship, the two parties bear the responsibility of negotiation of the terms their specific relationship, even if they are of the same culture.

There also seems to be, in the context of relationships, an expectation of gratuitous action - that is, that one party will act in the interests of the other while expecting nothing specific in return. My sense is that this is not a condition of the relationship, and can happen outside a relationship, and that the nature of this action is not affected by the existence of a relationship, so the notion of gratuitous action merits separate consideration.

Also similar to transactions, relationships are established by mutual consent. In some instances, it may be argued that a person is forced or compelled to participate in a relationship (for example, relationships of proximity are largely involuntary), though it would seem that the nature of involuntary relationships merits separate consideration from the voluntary relationship, which is more common.

Relationships are also maintained by mutual consent. If, at any time during the relationship, one party wishes to discontinue the relationship, then the relationship is ended. In some instances, there may be a sense of lingering obligations to another party to complete certain transactions in recompense for the other party's past action, but "breaking" the relationship otherwise liberates both parties from the obligation to future actions or any further involvement with one another.

Given this consideration, a basic definition of a "relationship" is derived as a set of terms by which two parties obligate themselves to act in one another's interest. This still strikes me as vague - but given that a relationship is a concept that may manifest itself in an infinite number of ways, the notion is inherently vague.

Trust and Business Relationships

It's been considered that the notion of a relationship between two parties adds complexity to their interactions, and that in its most basic sense, a relationship arises from a series of interactions (11/28) that create individual periods of obligation that overlap, giving the sense of an ongoing commitment between two parties. However, the notion that a relationship is something "more" than a series of transactions is not uncommon.

I'd like to explore this notion further, though at the same time to isolate it from the broader sense of relationships. The "relationship" between members of a community is of interest to ethics in a political sense, but is largely out of scope in the context of business (except in the relationship between business and community), and domestic and social relationships also seem to be beyond the scope of business ethics.

It's also my sense that any party who interacts with another party in the context of business could be said to have a relationship (stockholder, employee, executive, competitor, etc.), and these may merit separate consideration. For the present, I'll focus on the ongoing relationship between vendor and customer.

Not all commercial transactions take place in the context of a relationship. There is the notion of the one-time sale, in which the obligation of the buyer and seller end at a specific time, and the lack of a repeat purchase leaves both parties with the impression that they are "done" with the other.

Granted, there are various stipulations and expectations inherent in such a transaction, which may vary according to the nature of the good or service that is purchased, and there are instances in which a buyer may be dissatisfied with the transaction and seek redress. But provided that all goes well and both parties are satisfied, the transaction is completed.

One of the chief indicators of transactional satisfaction is the willingness of the buyer to repurchase from the same supplier (and conversely, the willingness of the seller to enter into a transaction with the buyer). While there may be some argument that satisfaction does not have to be complete in every way for this to occur, and that one or both parties may be accepting some compromises for the sake of convenience, it would be difficult to assert that parties who seek to repeat a transaction are significantly dissatisfied with their previous encounter.

The significant difference between an initial purchase and a rebuy transaction is that the latter implies a degree of trust. Each party assumes that the repeat transaction will be essentially the same as the one before, and has a reasonable expectation of the other party that the repurchase will be essentially the same as the initial purchase.

In this regard, it is reasonable to assert that the expectations of each party constitute an obligation on the part of the other party to undertake the responsibility to ensure the uniformity of the transaction to previous experience, or to provide information to the other party if it is foreseen that it will be different than before. To withhold or conceal information that would make the other party aware of a difference is a form of deception.

To some degree, the same can be said of the initial transaction, but the responsibility to provide information is not as compelling, as there is no previous experience between the parties. As they are unknown to one another, each assumes a certain level of risk in entering into a transaction, and should things go awry, there is no established trust to be violated. However, once this transaction is completed, it is reasonable for each party to assume future transactions will be measured against this standard.

It seems to me that this is what is meant by the notion of "trust" among parties who are in a relationship. In some situations, it may be arguable that trust creates additional obligations, but at the minimum, trust is based on consistency of transactions between two parties that routinely interact.

Duration of Obligation

With the exception of the imperative to do no harm, obligations are limited in their term. At some point, the obligation is fulfilled. In some instances, an obligation is fulfilled at the completion of an act; in others, it has greater longevity. Ultimately, it seems to reason that the duration of obligation is negotiable, but the duration varies greatly. The example of a commercial transaction is sued to illustrate this notion:

The obligation of the buyer is fulfilled upon receipt of payment. To split hairs, the obligation is not satisfied by merely tendering payment, as a buy who tenders payment in the form of a rubber check or counterfeit currency has not satisfied his obligation. In most instances, the payment is accepted and validated in a short amount of time, and the buyer's obligation is fulfilled.

The obligation of the seller, meanwhile, has greater longevity. In most instances, their obligation to the buyer is not fulfilled by delivering a physical good or performing a service, but persists for a reasonable amount of time afterward. Primarily, if the seller has misrepresented the nature of the good itself, this is fundamentally no different than a buyer who has presented counterfeit currency.

Beyond that, the seller remains obligated until the item has been consumed or a reasonable amount of time has passed, such that age or usage could reasonably be expected to devalue the item for its intended purpose. The qualification of "reasonable" indicates that there is some variance that I will not presently explore. There is also the notion that the seller must share responsibility for any harm that arises from the use of an item that he has provided to a buyer, but this is a separate matter from the sales transaction.

And so, in the context of a single transaction the obligations between buyer seller are limited in their duration. In a basic sense, the buyer's obligation terminates on receipt of payment, and the sellers obligation terminates on the consumption of the goods provided.

An ongoing relationship between buyer and seller can be seen in a basic sense as a chain of transactions, with the obligation of seller to buyer renewing on each purchase (though to be precise, each obligation is entirely separate, so it is not a renewal of the same obligation but the initiation of a separate obligation, similar to the previous one).

It is in this sense that obligations take on persistence: it is understood that the buyer will be inclined (of importance - "inclined" and not "required") to return to the same seller, and that the seller will be inclined to serve the same buyer, so long as each fulfills their obligations in the previous transaction. And given the experience of successful transactions, a level of trust will arise for mutual obligations to be fulfilled. And until such time as the trust remains, the relationship persists.

My sense is I've digressed to a separate topic (relationships) which merits further consideration on its own - but in the context of the duration of obligation, it's significant to note that an "ongoing" obligation arises through repeat transactions - it is not separate and independent of the individual transactions.

Relationships

Another notion that adds complexity to evaluating business transactions is the notion of the "relationship" - specifically, it is possible for a transaction to take place in isolation (a one-time sale to a customer with whom the business will never interact again), but it is more common for transactions to be done in the context of an ongoing relationship (the business sells to the same customers, again and again, over time).

The notion of relationship is important to both parties. It is convenient and efficient, for a customer to be able to obtain the same good from the same vendor, and for a business to sell to repeat customers. However, it is more important from the perspective of a business, as future sales ensure the perpetuation of the organization, which is a tacit goal of most organizations.

I would also posit that it is beneficial to ensuring the consideration of ethics: a business that seeks to make repeated sales, over time, can generally be counted on to treat its customers better than a fly-by-night operation. The latter seeks to have a single interaction, as it has no future interest in the consequences to the customer of the present transaction, whereas the former realizes it must satisfy the customer as a means of obtaining their future business.

One of the weaknesses I have noticed in many studies of this topic is a narrow focus on the immediate transaction, without consideration of the long-term interests of both the customer and the business. The limitation of this consideration is not invalid, and is in fact appropriate for a one-time transaction - but my sense is that this is less common than having an ongoing relationship.

I also have the sense that this is a relatively recent consideration: especially in the field of marketing, the notion of an ongoing relationship seems to be a relatively recent one - or perhaps the popularity of the notion is only increased of late, as it seems to be that many people in business have considered relationships long before it was fashionable to do so. As such, the notion of relationship and its impact on ethics may be a largely unexplored topic.

Transactions

Thus far, the notion of "action" has largely been considered as precipitating from the independent decision of a single party. However, the context of business is a social one, and seldom ever involves a single party's decision to undertake an action without considering the expected actions of others.

A decision is made to sell a good, but this is based on the expectations that others will decide to purchase it. Hence the decision to sell must consider the factors that are taken into account in the decision to purchase, which is made by another party. In this sense, the action of the business is influenced by the perceived future action of the intended customer.

The same can be said of virtually any action undertaken by a business - and "virtually" is a concession to the possibility that there may be some action that is taken independently, though I am presently unable to conceive of such a thing.

The transactional nature of business adds yet another level of complexity to the consideration of ethics in this context: when an item is offered for sale, and it is assessed that the selling of the item is unethical, is the ethical failure to be ascribed to the business that decided to sell the item or the customer who decided to purchase it?

My sense is that this is an important consideration, and is inherent in most real-world situations in which the subject of ethics is raised. However, for the present, I feel it's necessary to separate the two decisions - to treat the decision to sell and the decision to buy as two separate decisions, each of which is made by a different party, each of which must be considered in and of itself.

There are dependencies between them, but it becomes a chicken-and-egg argument: would the customer decide to buy if the item were not for sale, or would the business decided to sell if there were no consumer demand? My sense is that either may be considered true, depending on context.