The Standards of Business Behavior and the Rules of Transactions

Part 1 of Trilogy about Rules, Discipline, and Fairness

Introduction

This article begins a trilogy of articles relating to self-discipline (in business), the general rules of business conduct, and finally a broader look at the concept of fairness in the Golden Rule.

Godzilla & Bird, © 2019 David S Anderson

This idea originated from a February interview¹ on AzamTV in Tanzania where a business consultant discussed essential knowledge for entrepreneurs, mentioning self-discipline in a business context as a key element.

Her mention was so brief that I doubted my Swahili friend grasped the depth of her meaning. Our subsequent discussion revealed that while the concept behind self-discipline was both understood and approved, what it meant to him in actuality (in the business world) was not.

That was the seed for what I thought would be merely an article about self-discipline for entrepreneurs. I began preparing for writing the article by being curious about the etymology of both disciple and discipline. While 13th and 14th-century definitions of these terms didn't fully align with the modern understanding, what came closest starting in ca 1500 was the French military usage of discipline as 'training to follow orders and act in accordance with rules'.²

This military definition seemed to echo the contemporary interpretation, naturally leading to the question: 'What fundamental rules or expectations govern business?'" Consequently, this simple starting point has expanded into the following series of three articles:

Part 1: The Standards of Business Behavior and the Rules of Transactions

Part 2: What Newbie Entrepreneurs Need to Know about Self-Discipline

Part 3: The Concepts of Fairness, The Golden Rule, and Karma

As you can see, we must begin with Part 1 answering the question: 'What fundamental rules or expectations govern business?' And that is the topic of this article.

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Part 1: The Standards of Business Behavior and the Rules of Transactions

This article explores fundamental unspoken expectations that govern business conduct, encompassing ethical principles, transactional rules, and standards of professionalism.

Despite not being written down, these business cultural values are indeed passed down from generation to generation to aspiring young business acolytes – usually mentor to mentee, or boss to subordinate, or parent to child.

Part 3 of this trilogy will explore the ethical origins of the commonality of these expectations. And although modern standards seem to emanate from a NW European cultural standard (ie, Dutch & Anglo influence), there is a universality behind even the outward “business-suited” cultural expressions; a universality which I believe makes them familiar across Asian, European, Arabian, and African cultures.

Ethical Principles

These are basic expected behaviors governing business people entering into business (ie, transactional) relationships. This isn’t necessarily a complete list; rather, a minimally required list.

• Honesty and Integrity
  This principal deals with representations prior to the transaction about product, quality/specs, service, performance – anything which an entity is promising. It is about acting with integrity in all dealings and not being fraudulent.

  • Honesty is truthfulness and lack of deception about representations.

  • Integrity means being a reliable and dependable partner, no matter what exigencies might arise in the future.

• Fairness
  Business transactions occur within market realities and competitive landscapes which might be unfair, unbalanced, and inequitable. Thus the concept of Fairness is constrained by this inherently inequitable environment.
  Fairness thus means that securing an unfair advantage through unethical means is unacceptable. Fairness implies that agreed-upon rules should be applied transparently to all parties, without secret circumvention.
  Fairness prohibits any forms of exploitation, manipulation, or coercion, including but not limited to physical violence, threats (including governmental or military), kidnapping, enslavement, blackmail, or the exploitation of vulnerabilities such as infancy or degenerative mental capacity.

• Accountability
  The basic rules of business expect every entity to be economically responsible for its actions, commitments, and performance. This includes taking ownership of mistakes and providing appropriate remedies when promises are not met. There is a fundamental expectation that the goods or services exchanged will be of a trusted and reasonable quality, adhering to the agreed-upon terms and specifications.

• Legality
  Businesses are expected to engage in law-abiding conduct. This means operating strictly within the bounds of all applicable laws and regulations and vouchsafing the entity’s legitimacy throughout all negotiations and transactions.

The Rules of Transactions

Business is a transacted exchange between two or more parties with the mutual objective of buying and selling goods or services. This ‘buying or selling’ (the exchange) occurs using an agreed upon medium (such as services, objects, or money) to balance the buying/selling value, and proceeds according to the mutually agreed-upon terms of the transaction.

This principle is universally recognized across cultures, nations, and history. It is so universal and established, that almost always the following points are expected as unwritten rules regarding the process of transacting.

• Goal: Reach a Decision (= Transaction Contract)
  The objective of negotiations is a decision (aka contract) re a transaction. The Parties negotiating represent that they have agency³ (decision makers) thus giving legitimacy and effectiveness to their mutual interactions. Agency means that the individuals involved in the lead-up to the transaction have the power to commit their respective entities to the agreed-upon terms, preventing wasted time and resources on discussion that cannot be enacted because a party lacks agency.

• Method: Communication
  Parties are expected to communicate clearly and unambiguously regarding the terms of any exchange, including price, quantity, quality, delivery, and payment.

• Process: Negotiation
  Every transaction is subject to negotiation prior to being decided.
  Parties are expected to be forthright and avail themselves of the opportunity to communicate their requirements prior to commitment regarding all terms of the (to be) contracted agreement.
  Further, the very act of negotiating (proffering any request, such as a price) in any form represents a vector towards an agreement: if the other party accepts the proffer (such as a price), this forms a binding contract. This means that negotiation must proceed with the seriousness of a contract in-process.
  Since the parties have agency, an agreement can be reached at any point. Typically price is always the last item to be negotiated because price (as a proxy for value) reflects the evaluated cost/benefit of the sum total of all other terms & conditions of the transaction from the standpoint of either party.

• Agreement: The Contract is a promise that Obligations will be fulfilled.
  Once an agreement is made, there's a general expectation that all parties will fulfill their agreed-upon obligations in a timely and satisfactory manner. In many businesses, a verbal agreement is indeed a binding contract (and is often followed up by a written contract even if the parties have already begun to fulfill the verbal contract).

Professionalism

"Professional" implies someone who is able to earn their living in a given field because of their competent skills, standards, and integrity —unlike an unpaid amateur, a one-off jobber, or an inexperienced newbie.

Business is like any professional service: there are expected standards of dress, speech, conduct, and behavior. Just because you buy and sell something does not necessarily make you a professional!

• Mutual Respect
  This means valuing your counterpart's time, effort, investment, and intentions.

• Punctuality
  Timeliness is valued. This applies to meetings, deadlines, and the delivery of goods or services.

• Efficiency
  Be Efficient, not wasteful of resources. This will impress upon your counterparts that you are a serious and reliable partner in future transactions.

• Professionalism
  Maintain a professional demeanor in interactions, including appropriate communication, attire, and behavior. Adhere to boundaries that are objectively and rationally business-based, distinct from the often emotional, subjective, and irrational personal sphere.

In Part 2, we will examine self-discipline in the light of these standards and expectations.

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1.
^ youtube link above [in Swahili language without subtitles].

2. etymonline.com, 2025, https://www.etymonline.com/word/discipline

3. having agency: Empowered to act autonomously and make binding decisions on behalf of self or an organization.