Over the past few months, it has come to light that the Houston Astros used a high-tech/low-tech strategy to steal signs from opposing catchers and to signal them to batters. This scheme involved cameras and players banging on trash cans. The Astros think it helped their players.
Not everyone is so thrilled with the Astros, of course. Indeed, fans and even other players have reacted with outrage to the news of the scheme. And players caught up in significant scandals like Pete Rose and Shoeless Joe Jackson have been banned for life from the game.
By way of contrast, think about scandals in business. People who act unethically in business and the organizations they work for may get punished, but they aren’t tarred forever as cheaters. Michael Milken may have been indicted for racketeering and securities fraud, but he emerged afterward to be a philanthropist—and was recently pardoned by President Trump. Even companies like BP and Volkswagen, which had significant environmental scandals, or Wells Fargo, which defrauded customers, remain profitable companies.
A core difference between sports like baseball and business involves our focus on the process versus the outcome. In sports, the process for playing the game is the whole point. We create arbitrary rules for a sport (like not touching the ball with your hands in soccer or having to run the bases counterclockwise in baseball), and then we see which people and teams can excel within that set of rules. Often, the game makes no sense without those rules.
In contrast, the central focus for business is the outcome. Companies have some goal—often to sell a product or service—and they want to find ways to achieve that goal. Indeed, we often hold up people who break the mold of how a particular business operates through disruptive innovation as examples of the best of what business can achieve. Netflix disrupting Blockbuster by renting movies without having brick-and-mortar stores was not seen as cheating, but rather as a more positive kind of game-changer.
Of course, business does operate within a system of laws. In general, though, the rules we place around business are designed to prevent a desire for short-term gains to cause significant problems for markets in the long term or to keep any single entity in a market from amassing too much power to control prices in order to allow the “free hand of the market” to operate. That is, the purpose of rules in business is for regulation, not to define the task itself.
As a result, people’s reactions to rule infractions differ in each context. Sports fans treat the central rules of their sport as “protected values.” A protected value is one for which we will not accept tradeoffs. We react to violations of these values with outrage. We may allow some rules of sports to be bent (players in professional basketball often take more than one step after they stop dribbling), but we do not dispense with the rules altogether. And a team or player that flouts those rules bears the brunt of the outrage of fans, management, and even the officials of the league governing the sport.
The rules of business are often enforced with sanctions of some kind. As a result, following these rules is treated as a business decision rather than an ethical choice, where the fine to be paid because of a violation is just another cost of doing business to be weighed against the cost of complying.
One core outcome of this difference in the way rules are treated in sports and business is the legislative response to scandals involving rule-breaking. In sports, persistent rule-breaking is often met with changes in rules and tougher enforcement of existing rules. Lance Armstrong was stripped of his Tour de France victories after revelations that he was doping during his string of victories. Testing for anabolic steroid use among baseball players was increased after high-profile cases like Barry Bonds’s.
In business, there is resistance to changes in regulation after scandals, and even when legislation is put in place, it is often rolled back after the initial furor dies down. For example, after a variety of questionable financial practices combined to create the 2008 financial crisis, regulations including the Dodd-Frank Act were put in place. By 2018, those regulations were rolled back.
Sports have always allowed a certain amount of deviation from rules, as long as they do not fundamentally alter the spirit of competition. Groundskeepers in baseball have often made subtle changes to the field, like giving it extra water, in order to favor the home team. Likewise, we want businesses to question core assumptions of industries in order to disrupt markets.
Perhaps, though, ethical violations in business should be treated with the kind of outrage that greets sign-stealing and doping. It might just help business not repeat some of the biggest mistakes of the past.
Art Markman is executive director of the IC2 Institute at the University of Texas at Austin and author of Bring Your Brain to Work.
More opinion in Fortune:
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—How Democrats’ impeachment campaign helped Trump
—Being a CEO is more tenuous than ever. How I survived 30 years at Aflac
—How Warren Buffett built Berkshire Hathaway
—Are the Houston Astros irredeemable cheaters? Or are they all of us?
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