Dear Bob ... In regard to the writer who wanted to know what is fair in business, I would ask several questions of my own. Fair to whom? To the employees? To the suppliers? To the customers? To the stockholders? To the competition? I would also like to know why he's asking the question. It's important to keep these things in perspective and remember that it's not the function or goal of a business to be fair. As Dear Bob …In regard to the writer who wanted to know what is fair in business, I would ask several questions of my own. Fair to whom? To the employees? To the suppliers? To the customers? To the stockholders? To the competition?I would also like to know why he’s asking the question. It’s important to keep these things in perspective and remember that it’s not the function or goal of a business to be fair. As you so often have pointed out, it’s businesses exist to make money. Fairness is only relevant in regard to how it affects that end. For example, a CEO would be foolish to try to make everything “fair” for each of his employees, offering the same opportunities to each because that would drain valuable resources from where they are needed. The employee who obviously doesn’t have the potential to succeed in a certain environment should not be given the opportunity to waste company time trying.I won’t venture into the quagmire of whether companies should behave as people or whether they owe their employees fair pay, etc. I simply want to point out that there are limitations and conditions concerning the application of “fairness” in the workplace. Having said all that, I hope that I personally act with integrity — which may be a better gauge than fairness — regardless of what my company does. I want to sleep at night, even if the company does not.– Too long at the fair Dear Fair-goer …Based on the context of the inquiry, my assumption was that the writer was thinking about fairness in its ethical sense: We usually consider things that are unfair to be unethical.Your question – fair to whom – is a good one. Another, related question is whether being fair to one stakeholder group necessitates being unfair to the others. In other words, it’s worth understanding whether fairness is like optimization. When you optimize a system for one stakeholder you generally suboptimize it for the others, after all – shouldn’t we expect the same to be true for fairness? Personally, I don’t think that’s true. By my own values, a system is fair if everyone knows the rules, and everyone is allowed to quit the system if they don’t like it.Many people would add that in order for a system to be fair, the same rules must apply to everyone. And when it comes to society and public policy, I agree, more or less. Terry Pratchett pointed out in one of his wonderful Diskworld novels that “privilege” means “private law” – the essence of an unfair society.(To illustrate why I say “more or less,” note the following quote from Anatole France: “The law, in its majestic equality, forbids the rich as well as the poor to sleep under bridges, to beg in the streets, and to steal bread.” Having the rules apply equally to all might be a necessary condition for fairness; it’s clearly not a sufficient one.) But we’re getting into deep waters unrelated to the world of commerce. So back to business: I suppose it’s correct to say that the rule, “Only the CEO can make capital spending decisions for amounts greater than $100,000,” applies equally to everyone. It’s equally correct to say that in many companies it’s just another way of saying, “The CEO can make decisions about capital spending in excess of $100K. Those close to the CEO have a decent chance of influencing those decisions. Everyone else … take a number.”In business, the pre-eminent virtue is effectiveness, not fairness. Businesses in which the rules are known are more effective than those in which the rules are a matter of whim. In a capitalist society it is important for labor to be mobile – to be able to quit. That’s why the “company store” environments that placed miners (for example) in inescapable debt to their employers were abolished.Put it differently: Businesses must be profitable or they cease to exist. Mission statements notwithstanding, businesses exist to make money – that’s the point. Our government, at least, exists to “… form a more perfect union, establish justice, insure domestic tranquility, provide for the common defense, promote the general welfare, and secure the blessings of liberty to ourselves and our posterity.”Form follows function. Business and government have differences of purpose, and therefore of governance and ethical frame of reference.– Bob ——– Technology Industry