Abstract

Why do otherwise well-intentioned managers make decisions that have negative social or environmental consequences? To answer this question, the authors combine the literature on construal level theory with the compromise effect to explore the circumstances that lead to seemingly unethical decision-making. The results of two studies suggest that the degree to which managers make high-risk tradeoffs is highly influenced by how they mentally represent the decision context. The authors find that managers are more likely to make seemingly unethical tradeoffs when psychological distance is high (rather than low) and when they are forced to choose between competing alternatives. However, when given the option not to choose, managers better reflect on the consequences of each alternative, and thus become more likely to choose options with less risk of negative consequences. The results suggest that simply offering managers the option not to choose may reduce psychological distance and help organizations avoid seemingly unethical decision-making