Judging Managerial Actions as Ethical or Unethical: Decision Bias and Domain Relevant Experience

Abstract

This is an empirical study comparing the susceptibility of managers and students to a decision-making bias when making judgments about ethical business practices. The managers and students read through vignettes and made judgments about how ethical they perceived the described business actions to be. Half of the participants (half of the managers and half of the students) were exposed to three situations in which the actions being judged were clearly unethical. The other half of each group was exposed to situations in which the actions being judged were clearly ethical. All were exposed to the same fourth situation of a business decision. In this ambiguous situation it was not clear if the business decision being evaluated was ethical or unethical. The decision bias examined here addressed the question of ‘to what extent does exposure to prior unethical (or ethical) actions influence one’s evaluation of how ethical a particular business decision is when it is not a clearly right or wrong action. The results demonstrated that students’ ethical judgments about the action in the fourth scenario (the same scenario for everyone) differed depending on what they were previously exposed to. Significant assimilation effects were found in the student sample suggesting support for the perceptual readiness models. The managerial sample yielded differences in the opposite direction, one of a contrast effect, but these did not reach statistical significance. Assimilation effects occurred in the sample without domain relevant experience and contrast effects occurred with the experienced sample. Implications are discussed.