The effect of formalism on unethical decision making: The mediating effect of moral disengagement and moderating effect of moral attentiveness

Date01 January 2021
DOIhttp://doi.org/10.1111/beer.12315
Published date01 January 2021
Business Ethics, Env & Resp. 2021;30:127–142. wileyonlinelibrary.com/journal/beer
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  127© 2020 John Wiley & Sons Ltd
1 | INTRODUCTION
Unethical organizational decisions and actions can cripple the most
successful enterprises, as witnessed in infamous cases involving
Enron, WorldCom, and Arthur Andersen. Therefore, it is necessary
to examine unethical business practices and behaviors from a cross-
disciplinary perspective (Bandura, Caprara, & Zsolnai, 2000). Normative
and descriptive (or empirical) ethics are two domains of business eth-
ics (O’Fallon & Butterfield, 2005). Normative ethics aim to guide daily
behavior, while descriptive ethics aim to describe, explain, and predict
moral and immoral behaviors. In this study, we examined how formal-
ists make ethical decisions from the perspective of descriptive ethics.
Individuals may differ in their opinions about the morality of a
particular behavior because they differ in their ethical predispositions
(Wiltermuth & Flynn, 2013). Formalism and utilitarianism are two
kinds of ethical predispositions. From the perspective of normative
ethics, formalism posits that individuals should act in accordance with
a universal law or social norms; whereas utilitarianism considers be-
haviors that maximize societal happiness to be desirable (Mudrack &
Mason, 2019). Therefore, individuals who differ in their ethical predis-
positions may offer opposing opinions about the morality of a particu-
lar behavior. For example, when presented with a moral dilemma such
as the trolley problem (Hofmann, Wisneski, Brandt, & Skitka, 2014),
formalists favor saving one life over the majority, while utilitarians find
it acceptable to sacrifice one person to save the lives of many others.
In contradistinction to normative ethics, descriptive ethics fo-
cuses on how ethical predispositions influence ethical decision mak-
ing. A systemat ic review by Craft (2013) indicate d that most studies
support the e xistence of a positive rela tionship between de ontology
and ethical de cision making. Conversely, teleol ogy was found to be
negatively related to ethical decision making.
These findings raise questions about the directionality of the relation-
ship between ethical predispositions and ethical decision making. First,
why is the direction of the relationship between ethical decision making
Received: 8 Sept ember 2019 
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  Revised: 10 August 2 020 
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  Accepted: 12 Augus t 2020
DOI: 10 .1111/bee r.12315
ORIGINAL ARTICLE
The effect of formalism on unethical decision making: The
mediating effect of moral disengagement and moderating
effect of moral attentiveness
Rui Dong1| Ting Lu1| Qiaolong Hu1| Shiguang Ni2
1School of Business Administration, Zhejiang
Universit y of Finance and Econom ics,
Hangzhou, People’s Republic of China
2Shenzhen International Gradu ate School,
Tsinghua University, Shenzhen, People’s
Republic of China
Correspondence
Shiguang Ni, A ssociate profess or at
Shenzhen International Gradu ate School,
Tsinghua University, Shenzhen, Guangdong
Province 518055, People’s Republic of China.
Email: ni.shiguang@sz.tsinghua.edu.cn
Funding information
This study wa s funded by the Tsinghua
University Initiative Scientific Research
Program (Gr ant No.THU-HKU 201902),
Tsinghua SIGS Over seas Research
Cooperation Foundation (Grant No.
HW202000 4), National Philo sophy and
Social Scien ces Foundation of Chi na (Grant
No. 20AZD0 85) and the Guangdon g
Natural Scie nce Foundation (Gr ant No.
2020A1515010949).
Abstract
This study examin ed the relationship between f ormalism and unethical decisi on mak-
ing among Chinese wor king adults. A total of 316 Chinese a dult employees completed
measures of ethical predispositions, unethical decision making, moral disengagement,
and moral attenti veness. The results showed that form alism was related to a weaker
propensity to mor ally disengage. Mor al disengagement posit ively predicted une thi-
cal decision making a nd mediated the relationship between fo rmalism and unethical
decision making. Further, perceptual moral attentiveness negatively moderated the
relationship bet ween formalism and moral disengage ment. The theoretical and pr ac-
tical implicati ons of these findings are presented.
128 
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   DONG et al.
and formalism positive, while it is negative for utilitarianism? Are the un-
derlying psychological mechanisms the same in the relationships that for-
malism and utilitarianism share with unethical decision making? Second,
most contemporary morality studies have collected data using moral vi-
gnettes and thought experiments such as the trolley problem (Hofmann
et al., 2014). However, these hypothetical scenarios are obscure and
unrelatable in daily life. How individuals determine whether an action is
right or wrong influences many important aspects of life, including orga-
nizational life (Hofmann et al., 2014). Xu and Ma (2016) recently found
that neither formalism nor moral identity is powerful enough to predict
moral behavior in daily life. Individuals who endorse formalism and have
a strong moral identity are more likely to behave morally. What other
boundary conditions, in addition to moral identity, influence the relation-
ship between formalism and ethical decision making? These research
questions remain unanswered because investigation into the relationship
between ethical predispositions and ethical decision making has largely
been neglected by moral philosophers (Loe, Ferrell, & Mansfield, 2000).
Therefore, we aim ed to systematic ally explore t he mechanisms
and boundar y conditions tha t influence the rel ationship betw een
ethical predispositions, especially formalism, and ethical decision
making. We expected moral disengagement and moral attentiveness
to play a mediating an d moderating role in the re lationship between
formalism and unethical decision making, respectively.
This study make s several notable contribu tions to the literature.
First, this s tudy examines the effe ct of formalism on unethic al deci-
sion making thro ugh moral diseng agement; givin g insight into why
those who claim to a dhere to moral pr inciples engag e in immoral
behaviors. Se cond, the prese nt findings ex tend the literat ure by
delineating th e boundary conditions that i nfluence the rela tionship
between form alism and unethical decisi on making (Xu & Ma, 2016);
and by introduci ng a new variable as a bo undary condi tion. This
study is the fi rst to conceptual ize moral attenti veness as a moder-
ator to explore th e mechanism by which m oral disengage ment un-
derlies the rel ationship bet ween formalism an d unethical dec ision
making. Third , our findings have impor tant practical imp lications for
business ethics practitioners and managers in organizations.
2 | LITERATURE RE VIEW
2.1 | Ethical p redispositions and unethical decision
making
An ethical de cision is “both legal and mo rally acceptable to t he larger
community ” (Jones, 1991, p. 367). In contrast, a n unethical decision
is “either illegal or m orally unaccep table to the large r community
(Jones, 1991, p. 367). Ethic al decisions are inf luenced by orga niza-
tional factors (e.g., codes of ethics, ethical culture, and competi-
tiveness), moral intensity (e.g., magnitude of consequences, social
consensus, and p roximity), and individ ual factors (e.g., age, cog nitive
moral develop ment, and decisi on-making sty le) (Craft, 2013; Ford
& Richardson, 1994; Kis h-Gephart , Harrison, & Trevino, 2010 ; Loe
et al., 2000 ; O’Fallon & Butterf ield, 2005).
Ethical predispositions are the information processing patterns
that underlie ethical decision making and include both formalist and
utilitarian patterns (Reynolds, 2006). Formalism and utilitarianism are
the best-known approaches to the categorization of individual ethical
predispositions based on deontological and teleological evaluations, re-
spectively (Brady & Wheeler, 1996; Schminke, Ambrose, & Noel, 1997;
Schminke, Wells, Peyrefitte, & Sebora, 2002). We used the terms “for-
malism” and “utilitarianism” in business ethics in accordance with the
terms used by Brady and Wheeler (1996). “Formalism represents the
human tendency to assess ethical situations in terms of their consis-
tent conformity to patterns or rules or some other formal features.
Utilitarianism refers to the tendency to assess ethical situations in terms
of their consequences for people” (Brady & Wheeler, 1996, p. 928).
Within the framework of normative ethics, formalism and utilitar-
ianism have been conceptualized as the opposite ends of an ethical
continuum (Schminke, 2001). Thus, if individuals make an ethical de-
cision in accordance with utilitarian principles, they cannot make the
same decision in accordance with formalist principles. However, studies
on descriptive ethics have found that formalism and utilitarianism are
two independent dimensions within the ethical infrastructure of an in-
dividual (Schminke, 2001). Individuals may, with varying intensities, em-
ploy formalism, utilitarianism, or both, when resolving ethical dilemmas
(Schminke et al., 2002). Further, a person may rely on both formalism and
utilitarianism when making an ethical decision (Brady & Wheeler, 1996;
Schminke et al., 1997; Schminke & Wells, 1999; Trevino & Brown, 2004).
For example, when faced with a moral dilemma, individuals tend to make
decisions based on their emotional investment. For impersonal moral
dilemmas like the trolley problem, individuals prefer to employ utilitarian
principles and express a willingness to sacrifice one person to save many
others because of their low levels of emotional engagement. However,
in a personal moral dilemma such as the footbridge problem, they tend
to adopt formalist principles and express an unwillingness to sacrifice
others because of their high levels of emotional engagement (Greene,
Sommerville, Nystrom, Darley, & Cohen, 2001).
According to Reynol ds (2006), formalism and ut ilitarianism over-
lap with Kohlber g’s (1981) stages of moral develop ment. In the midd le
stages (conventio nal level), moral behaviors are g uided by the drive
to pursue share d interests (e.g. , pleasing par tners, parent s, family
members, cowor kers, and societ y). The principles that chara cterize
the middle st ages are similar to uti litarianism. I n the highest stages
(principled l evel), moral behav iors are guided by s ocietal rules a nd
are consistent wit h formalism. Formalists te nd to question whether
their behavior s violate moral co des and subsequ ently are urged to
conform to moral s tandards (W iltermuth & Fly nn, 2013). However,
utilitarian s may weigh the benef its and costs of e ngaging in a spe-
cific behavior. A possi ble caveat is that, i n some instance s, utilitar-
ianism justif ies hurting on e individual to hel p others (Luper, 2001).
Behaviors grou nded in utilita rianism may benef it a majority of in-
dividuals but vi olate social norm s or laws. For exampl e, a manager
may choose to pollu te the environmen t to pursue profit s. Some
empirical st udies have found that formalism is p ositively correlated
with ethical d ecision making and that ut ilitarianism is negati vely cor-
related with eth ical decision mak ing (Cohen, Pant , & Sharp, 2001;

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