The in¯uence of self-interest and ethical considerations on managers' evaluation judgments

Show full item record

Title: The in¯uence of self-interest and ethical considerations on managers' evaluation judgments
Author: Rutledge, Robert; Karim, Khondkar
Abstract: Recent empirical studies support self-interest as the sole basis for economic decisions (as predicted by agency theory). However, cognitive moral development (CMD) theory suggests that decision makers will allow ethical/moral considerations to constrain their economic behaviour. The purpose of this study is to resolve the essential conflict between the tenets of agency theory and CMD theory. The results of a laboratory experiment suggest that both moral reasoning level and adverse-selection conditions (self-interest) can have a significant effect on managers’ project evaluation decisions. Specifically, managers are likely to continue a project that is expected to be unprofitable only when adverse selection conditions are present and moral reasoning level is low. Thus, agency theory may not be generalizable to accounting-based economic performance.
Description: 1999 article from Accounting, Organizations and Society. Please see www.sciencedirect.com for the complete article.
Record URI: http://hdl.handle.net/1850/10360
Date: 1999-02

Files in this item

Files Size Format View
RRutledgeArticle1998.pdf 239.4Kb PDF View/Open

The following license files are associated with this item:

This item appears in the following Collection(s)

Show full item record

Search RIT DML


Advanced Search

Browse