Toward an Understanding of Third Party Ethical Inaction

The failure to take action after witnessing a wrongdoing in an organization is an alarming phenomenon, but has received minimal attention in business ethics and justice research. In this paper, we theorize and model how present-biased preferences related to quasi-hyperbolic time discounting contribute to time inconsistent ethical preferences, a self-control problem where ethical preferences at one point in time (e.g., believing that the event is unjust and unethical) are not consistent with ethical preferences at a future point in time (e.g., deciding not to respond). Specifically, we theorize how the moral intensity of the transgression and the third party’s moral identity influence which ethical decision processing framework, the deontic or rational framework, is dominant. We further theorize how and when these decision making frameworks contribute towards time inconsistent ethical preferences and ultimately ethical inaction via moral procrastination. Finally, we discuss the implications of our theoretical model for organizational scholarship and the ethical state of organizations and society.