Bounded awareness: Implications for ethical decision making

In many of the business scandals of the new millennium, the perpetrators were surrounded by people who could have recognized the misbehavior, yet failed to notice it. To explain such inaction, management scholars have been developing the area of behavioral ethics and the more specific topic of bounded ethicality—the systematic and predictable ways in which even good people engage in unethical conduct without their own awareness. In this paper, we review research on both bounded ethicality and bounded awareness, and connect the two areas to highlight the challenges of encouraging managers and leaders to notice and act to stop unethical conduct. We close with directions for future research and suggest that noticing unethical behavior should be considered a critical leadership skill.