Business Goal Difficulty and Socially Irresponsible Executive Behavior: The Mediating Role of Focalism

Abstract

Executive social irresponsibility has received increasing research attention in recent years, following the consensus for a broader stakeholder approach to managerial decision making. Despite the importance of the subject, there remains insufficient research on contextual factors that mold executives’ orientation toward social responsibility. Through three studies, we demonstrate that difficult business goals can reduce executives’ tendency to consider social responsibility in their decision making. Further, we find that focalism—a cognitive bias based on affective forecasting theory—can mediate positive relationships between business goal difficulty and socially irresponsible executive behavior. Our findings also suggest that, expanding executives’ thought processes beyond the narrow focus of a business goal achievement can be a good strategy in reducing socially irresponsible executive behavior, even in the presence of difficult goals.