Entrepreneurial Intentions and Moral Disengagement among Business Students
This study evaluates the relationship between entrepreneurial decision making and moral disengagement among business students with the objective of assessing how far students are willing to compromise on ethical values to achieve financial gains and self fulfillment. This study is expected to contribute substantially to the existing literature on entrepreneurial intentions and ethical decision making by getting an insight into the organizational behavior of would be entrepreneurs.
Instances of ethical aberrations by high ranking officials from companies like Enron and Goldman Sach, who were business graduates from reputed institutes prompted Cory, S.N. (2015, 2) to undertake a research to establish whether students who majored in business studies displayed a higher moral disengagement than students who majored in science. However his findings did not register any significant differences between the students of both the streams; instead his findings indicated that moral disengagement in male students were significantly higher than that of female students.
There are many researches that focus on the issue of entrepreneurial intentions and moral disengagement of entrepreneurs, prominent among them is the work of (Baron, R.A. Zhao, H. & Miao, Q. 2012, 3) who proposed that moral disengagement of entrepreneurs is positively related to the need to gain financial success but is negatively related to personal fulfillment. His proposals were verified by his experiments on Chinese entrepreneurs and formed the basis for many future studies. He used previous researches to define unethical conduct as behavior against the accepted norms of moral behavior but which may not be actually illegal and asserted that unethical decisions were direct results of moral disengagement. Although there is a lack of scholarly studies that focus on the reasons of the findings of Baron, et al (2012), it can be inferred that motivation for financial gains can be realized by compromising on quality, processes and social responsibility while personal fulfillment is obtained from improving self esteem and unethical conduct lowers it. Situations that presented high opportunity for serving self interest are likely to induce moral disengagement that allowed the individual to easily ignore internalized moral standards (Kish-Gephart, J., Detert, J., Treviño, L.K., Baker, V. and Martin, S., 2014, 268). However the authors also contended that individuals who were more conscientious would be deterred from indulging in moral disengagement by the thought of harming others. This inference was verified by further studies by Baron et al, (2015, 109) in which he elaborated on the impact of motivation for financial gains and self realization on moral disengagement. According to the study strong motivation for financial gains may induce a tendency in entrepreneurs to ignore ethically relevant issues like acting against the interest of stakeholders and the normal business principles. Instead they may be tempted to imitate similar concerns that use short cuts to maximize profits. We extend this assumption to the present study on business students to develop our first hypothesis
H1: Motivation for financial gains in entrepreneurial intentions of business students has a positive impact on moral disengagement.
(Baron , et al, 2015, 110) on the other hand proposed that self realization or self fulfillment is achieved through the need of self satisfaction and personal growth which enhances the tendency of self monitoring, thereby strengthening moral regulations. As a result they are less likely to resort to unethical means to increase profitability. Extending this proposal to business students we arrive at the second hypothesis
H2: Motivation for self fulfillment in entrepreneurial intentions of business students has a negative impact on moral disengagement.
These studies also highlighted the fact that moral disengagement was a result of perceiving cues and intentions that supported the ignorance of ethics to realize personal interests at the cost of harming others. Entrepreneurial intentions may be divided into two components- unethical entrepreneurial intentions which may indulge in unethical reasoning for increasing profitability and ethical entrepreneurial intentions which represent a conscientious approach in increasing profitability. Moral disengagement in business students imitating entrepreneurs, who may have not acted very conscientiously would be more, compared to students whose entrepreneurial intentions are not influenced by the success of unethical business leaders. We propose that unethical entrepreneurial decisions are triggered by moral disengagements. This forms the basis of our third hypothesis that
H3: Moral disengagement has a positive influence on Unethical Entrepreneurial Intentions
Method
The findings of the study were based on the data collected from students studying Organizational Behavior in Western Sydney University. A total number of 128 students participated in the study out of which 76 were males (59.5%) and 51were females (39.5%) with a mean age of 20.57 years and a standard deviation of 2.68.
The study identified ten variables out of which eight were related to moral disengagement (MD). The eight aspects of moral disengagement are MJ (Moral Justification), EL 9 Euphemistic Labelling), AC (Advantageous comparison), DISR (Displacement of Responsibility), DIFR (Diffusion of Responsibility), DC (Distortion of Consequences), AB (Attribution of Blame), DEH (Dehumanisation). The other two variables SF (Self Fulfillment) and FG (Financial Gains) are indicators of entrepreneurial intentions. The students were asked to rate themselves on a 5 – point Likert scale in which a score of 1to 5 represented strongly disagree to strongly agree with the variable’s influence on moral disengagement and entrepreneurial intentions. MD represents the composite score and includes the addition of ALL items in that scale whereas the rest of the scores (apart from SF and FG) are ‘subscale, that is, the different elements of moral disengagement.
The means and standard deviations of the variables used in the study (as well as possible significant differences) can be found in Table 1on the next page. The results for the first table were obtained using t-tests to examine the difference between the scores between males and females. The correlation between the various facets of moral disengagement with the composite score is represented in table 2.
Results
Note: ns = not significant, * = significant at .05 level, ** = significant at .01 level,
Note: *=significance at .05, **=significance at .01 and ***=significance at .001.
the findings of Cory, (2015) which indicated that there were significant differences in the scores of male and female students showing that males were more likely to represent moral disengagement. If these findings are combined with the assumptions of Baron et al, (2012) which show that entrepreneurs whose motive was financial gains were more likely to indulge in moral disengagement, we find support for our hypothesis H1a that students who have the entrepreneurial intentions borne out of financial gains have the tendency to indulge in moral disengagement. This assumption is also verified for the correlation coefficient of FG with moral disengagement being positive. The findings also supports Baron et al’s (2012) assumption that entrepreneurs with self fulfillment as their motives are less likely to practice moral disengagement. However using Detert’s analysis of results, the hypothesis H1b was not supported by the correlation scores between self fulfillment and financial gains of 0.4 at p< 0.001, which shows that entrepreneurial intentions of financial gains and self fulfillment are positively related. Another unexpected finding is the negative relation indicated between distortions of consequences with that of financial gains with a correlation coefficient of -0.19 at p< 0.05. This indicates that students motivated by financial gains are less likely to distort the consequences of their actions. This shows that they are aware of the consequences of their unethical decisions for maximization of profits and are willing to accept them.
The positive correlation between Moral Disengagement and entrepreneurial intentions of Self Fulfillment and Financial Gains in both male and female students lends support to our hypothesis H2 that Entrepreneurial Intentions and Moral Disengagements have a positive relationship.
Conclusions
Limitations and Directions for future Study
The study was conducted on students studying organizational behavior and it is likely that their responses were influenced by the subject and the data obtained was slightly biased. Also there is a possibility that there is a change in intentions once they are actually confronted with realistic situations in business. Also the data is collected from students of a single institute and there may be high variations between different schools questioning the reliability of results.
Future Studies may address the issues of Moral Disengagements and Situational responses in entrepreneurs. Also the findings of the study can be extended to students studying other subjects and verify the truth of the assumptions.
References
Baron, R.A., Zhao, H. and Miao, Q., 2012. Personal motives, moral disengagement, and unethical decisions by entrepreneurs: Potential dangers of the desire for financial success. Frontiers of Entrepreneurship Research , 32(6), p.2.
Baron, R.A., Zhao, H. and Miao, Q., 2015. Personal motives, moral disengagement, and unethical decisions by entrepreneurs: Cognitive mechanisms on the “slippery slope”. Journal of Business Ethics, 128(1), pp.107-118.
Cory, S.N., 2015. Moral Disengagement in Science and Business Students: An Exploratory Study. Journal of Education for Business, 90(5), pp.270-277
Detert, J.R., Treviño, L.K. and Sweitzer, V.L., 2008. Moral disengagement in ethical decision making: a study of antecedents and outcomes. Journal of Applied Psychology, 93(2), p.374.
Kish-Gephart, J., Detert, J., Treviño, L.K., Baker, V. and Martin, S., 2014. Situational moral disengagement: Can the effects of self-interest be mitigated?. Journal of Business Ethics, 125(2), pp.267-285.
