Is unconsciously a product of the environment

Entrepreneur study: "I care about the environment, but ..."

Many entrepreneurs promise sustainable business practices and still make decisions that harm nature. Economists have now discovered that many company bosses by no means pretend to be environmentally conscious - but unconsciously decouple their actions from their values. Business leaders who perceive themselves as very influential or who are in a difficult economic environment are particularly susceptible to this. The findings expand knowledge about the importance of morality and the subconscious in economic decisions. They can help with environmental legislation and training future entrepreneurs.

They vow to protect the environment and stick eco seals on their products. But then it turns out that they are selling products that contain too many pesticides or palm oil from rainforest areas. Do the entrepreneurs decide on the basis of a rational weighing of benefits? Or does unconscious behavior play a bigger role in entrepreneurial activity than is often assumed? Under what conditions do entrepreneurs not follow their own values? To find out, economists from the Technical University of Munich (TUM), Indiana University and Oklahoma State University presented around 100 German company founders with several decision-making scenarios.

The entrepreneurs should evaluate different business opportunities from several points of view. On the one hand, it was determined how attractive the respective business opportunity is. On the other hand, circumstances such as effects on the environment, the respondents' respect for nature, self-assessment of their own entrepreneurial effectiveness or the perception of the company's current economic situation were surveyed. Using the linked variables of this so-called conjoint experiment, the researchers were able to draw conclusions about the influence of different cognitive levels in decision-making.

The scientists found that even entrepreneurs with great respect for nature made decisions that caused environmental damage. However, the decisions were not deliberately weighed up. "Rather, the test subjects unconsciously readjusted the relationship between values ​​and actions - so that their actions seemed to match their values ​​again," explains Prof. Holger Patzelt from the Chair of Entrepreneurship at TUM.

However, the researchers did not observe this decoupling in all entrepreneurs. Two conditions were decisive: a great entrepreneurial self-confidence of the company bosses and a difficult economic environment of the companies. So far, research has assumed that, on the contrary, entrepreneurs with low self-esteem are more likely to come into conflict with their own values.

Holger Patzelt explains the results of the study "I care about nature, but ..." as follows: "Company managers who rate their own effectiveness very highly want to exert an influence. Therefore, they run the risk of ignoring values ​​that limit their options for action The same principle applies under unfavorable economic conditions, for example if the company is in a highly competitive situation. Even then, the bosses believe that their decisions are particularly important. "

Politicians could make use of the scientists' findings in environmental legislation. "In sectors with difficult economic conditions, the legislature could look to stronger regulation to protect nature," says Patzelt. The knowledge of the unconscious decision-making mechanisms could help the entrepreneurs themselves to better visualize their own strategies for action. Last but not least, the scientists hope that the study results will change the training. "So far we have been trying to instill a high degree of entrepreneurial self-confidence in business studies for future entrepreneurs," says Patzelt. "Now we know that we can use it to trigger unwanted consequences."

Publication:
Shepherd, D. A., Patzelt, H., & Baron, R. A. Early Online Publication. "I care about nature, but ...": Disengaging values ​​in assessing opportunities that cause harm. Academy of Management Journal.