The Unintended Effects of Ethical Decision Aids in Organizations

Malte Baader, Maxim Egorov, Baiba Renerte, Carmen Tanner, Alexander F. Wagner and Nicole Witt
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Maxim Egorov: Zeppelin University Friedrichshafen
Baiba Renerte: University of Zurich - Department of Finance
Carmen Tanner: University of Zurich - Department of Finance; Zeppelin University Friedrichshafen
Alexander F. Wagner: University of Zurich - Department of Finance; Centre for Economic Policy Research (CEPR); European Corporate Governance Institute (ECGI); Swiss Finance Institute
Nicole Witt: Zeppelin University Friedrichshafen

No 25-18, Swiss Finance Institute Research Paper Series from Swiss Finance Institute

Abstract: Unethical behavior, deception, and fraud are major concerns in corporate governance. This paper examines the effectiveness of contemplation questions (CQs) as decision aids for employees facing ethical dilemmas. CQs, such as "Will the reputation of our company be damaged if my decision is made public?" are intended to activate moral agency and prompt employees to consider their actions from various perspectives (e.g., self, peers, company). Despite being used by 44% of S&P 200 and Fortune Global 200 companies, their effectiveness remains untested. Through two pre-registered, incentivized vignette experiments, we systematically investigate the causal effect of CQs on ethical decisionmaking. In Study 1 (N = 1,986), merely presenting CQs had no impact on ethical decisions. In Study 2 (N = 1,322), actively engaging participants by requiring explicit answers to CQs led to marginally more ethical decisions among individuals with high moral identity but significantly fewer ethical decisions among those with low moral identity. These findings align with a conceptual framework of motivated moral reasoning and suggest that while CQs can positively affect some individuals, they also backfire, promoting unethical behavior precisely in those already predisposed to such tendencies.

Keywords: Organizational behavior; Ethical decision making (search for similar items in EconPapers)
Pages: 60 pages
Date: 2025-02
New Economics Papers: this item is included in nep-exp
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Persistent link: https://EconPapers.repec.org/RePEc:chf:rpseri:rp2518

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