Lying in business: Insights from Hanna Arendt's 'Lying in Politics'

The political philosopher Hannah Arendt develops several arguments regarding 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 to businessmen: 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; and businessmen easily fall 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, which grew from a relatively insignificant organization into a large one within a short period of time, but ended with outright lies and bankruptcy.