Abstract

We suggest that new insights into the origins and effects of entrepreneurs’ unethical actions can be acquired through attention to moral disengagement, a cognitive process that deactivates the self-regulatory mechanisms that normally restrain individuals from actions inconsistent with their own moral values. Results obtained with a sample of Chinese entrepreneurs indicate that entrepreneurs’ motivation for financial success is positively related to moral disengagement, and that such disengagement, in turn, is positively related to unethical decisions. However, motivation to attain self-fulfillment is not related to either moral disengagement or unethical decisions. Additional findings indicate that the relationship between moral disengagement and unethical decisions is moderated by organizational lifecycle, being stronger during early than later stages of firm development.

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