How do situational factors influence ethical decision‐making in entrepreneurship? The role of self‐construal, temporal‐construal, and moral identity

Abstract

Entrepreneurs typically face scarce resources, high uncertainty, and a competitive environment when their ventures are at an early stage. Given these demands, along with a strong desire to ensure their business’ success, entrepreneurs may be tempted to prioritize financial self-interests over ethical considerations. However, individual differences may influence these actions. In this paper, we examine how self-construal (the extent to which the self is defined independently or interdependently with others), temporal-construal (the extent to which individuals think in abstract or concrete terms), and moral identity (an actor’s self-conception with respect to moral values, virtues, and standards of behavior) influence entrepreneurs’ ethical decision-making. Results show that interdependent self-construal and distal temporal-construal interactively influence the likelihood that entrepreneurs will make ethical decisions regarding customers and entrepreneurial values—but not regarding employees or external accountability. We also find that moral identity moderates the interactive effect of self-construal and temporal-construal on ethical decision-making. We provide implications for entrepreneurs, educators, and policy makers regarding how to facilitate ethical decision making.