The Legacy Motive: A Catalyst for Sustainable Decision Making in Organizations

In this article, we review and build on intergenerational and behavioral ethics research to consider how the motive to build a lasting legacy can impact ethical behavior in intergenerational decision making. We discuss how people can utilize their relationships to organizations to craft their legacies. Further, we elucidate how the legacy motive can enhance business ethics, incorporating theory and empirical ! ndings from research on intergenerational decision making, generativity, and terror management theory to develop the legacy construct and to outline the psychological underpinnings of motivations to leave a positive legacy. We discuss the ways in which legacies can provide a link between life-meaning and pro-social motivation, and we consider the ways in which individuals’ social environments can moderate the intensity of the legacy motive and can impact legacy-building behavior by determining the types of legacies that are valued. Finally, we highlight the implications of these ideas for ethical behavior and sustainable decision making in business contexts. All of the philanthropy you see—the buildings named after people for giving $50 million to this museum or to Columbia [University]—is a result of one man after another trying to conquer his mortality. (Konigsberg, 2008) THIS RATHER STRONG STATEMENT is attributed to Dr. T. Byram Karasu, a psychoanalyst to Wall Street ! nanciers and other wealthy individuals, who was interviewed in the New York Times in the summer of 2008 to discuss his experience of treating narcissistic disorders in wealthy patients. It highlights two important points for understanding the psychology of leaving a legacy. First, individuals’ awareness of their own mortality can produce feelings of anxiety that motivate efforts to extend the self into the future. Second, even individuals so obsessed with themselves that they require psychological evaluation and treatment will make sacri! ces in the present to provide bene! ts to others in the future. We de! ne a legacy as an enduring meaning attached to one’s identity and manifested in the impact that one has on others beyond the temporal constraints of the lifespan. When an individual leaves a legacy, that individual has established an impact that lasts beyond his or her living existence on this planet. In this way, legacies are vehicles that extend one’s identity and one’s life’s work and meaning into the future to outlive the physical self. In business contexts, legacy-building, or behavior designed to craft one’s impact on future generations, often takes the form of working to ensure the long-term viability of an organization, leaving the organization stronger, more productive, and more deeply connected to the shared values of the group’s stakeholders than one found 154 Business Ethics Quarterly it. It can also take an instrumental form, in which the resources and capabilities of the organization are used to create a lasting impact on one’s community or other groups with which one identi! es in a deeply meaningful way. In this article, we build upon research on intergenerational decision making, as well as research on terror management theory and generativity theory, to articulate the psychological dynamics underlying the motive to build a positive legacy, and we explore the role those dynamics play in promoting ethical behavior, especially in business and organizational contexts. We argue that the motivation to leave a positive legacy is rooted in a fundamental desire to feel that one’s life has meaning, and that various aspects of one’s social context can impact the legacy motive either by enhancing the fundamental desire for meaning or by de! ning the types of meanings that are culturally and personally valued. We begin by examining previous research that can illuminate the psychological dynamics that are involved when considering intergenerational behavior, which is behavior that affects future others. We move on to explain the legacy concept and to discuss the ways in which legacies can provide a link between life-meaning and pro-social motivation. We then discuss the role of social context in moderating the extent of the legacy motive and the content of the legacies that individuals are inclined to pursue. Finally, we point to areas for future research that can extend the utility of the legacy concept for understanding and motivating ethical decision making in organizations and society. INTERGENERATIONAL DECISION MAKING Intergenerational decisions, which involve a person or group in the present making decisions that impact other individuals in the future, have been studied by scholars in a variety of disciplines. For example, legal scholars and philosophers theorize about the extent to which present actors are morally obligated to protect the interests of future others (e.g., Barry, 1989; Richards, 1981; Weiss, 1989), and economists seek to determine the balance between the interests of present decision makers and future others that can produce optimal levels of ef! ciency (e.g., Kotlikoff, 1992; Portney & Weyant, 1999). In contrast to these normative approaches, psychological research on intergenerational decision making takes a descriptive approach and focuses on the psychological factors that affect the actual decision making behavior of present actors. A key feature of intergenerational decisions that is often a focus for psychological research is that the interests of present decision makers and the future others who will be impacted by their decisions may be in con. ict. For example, preserving bene! ts for future generations may require that the present generation forego some of those bene! ts, while avoiding the imposition of burdens on future others may require that individuals in the present manage those burdens themselves. When this con. ict between the interests of present and future actors exists, the present actors are faced with an intergenerational dilemma as they make decisions involving allocations of resources between generations (Wade-Benzoni, 2002a; 2008; Wade-Benzoni & Tost, 2009). 155 A Catalyst for Sustainable Decision Making in Organizations The previous psychological research on intergenerational dilemmas that we review in this article has been characterized by two primary boundary conditions (see Tost, Hernandez, & Wade-Benzoni, 2008, for a detailed discussion). First, the present generation has complete and unilateral decision-making power; future others who will be impacted by the decision have no voice in the decision process or outcome. Second, social actors are removed from the social exchange context over time by death, retirement, or some other symbolic detachment from the group; consequently, they do not experience any future bene! ts or suffer the later consequences of their prior decisions. Thus, in this line of research, there is no opportunity for future generations to directly reciprocate the bene! ts or burdens given to them by prior generations. The simultaneous presence of these features helps to differentiate the psychology of intergenerational decisions from more typical inter-group situations in which other parties have their own voice, and from traditional social dilemmas in which the decision maker remains part of the collective over time and thus experiences, along with other group members, the consequences that emerge from his or her prior decisions (Wade-Benzoni & Tost, 2009). A central goal of research on intergenerational dilemmas has been to identify the factors that in. uence the extent to which members of present generations are willing to sacri! ce their own self-interest for the bene! t of future others in the absence of economic or material incentives for them to do so. Key to this endeavor is the recognition that intergenerational dilemmas are characterized by a combination of interpersonal and intertemporal dimensions: decisions made by actors in the present affect other people (i.e., interpersonal) in the future (i.e., intertemporal). Below we review previous research relevant to decision making along these two dimensions and incorporate research on ethical decision making in order to highlight the psychological barriers to intergenerational bene! cence. An understanding of these barriers is important because it can help us to understand when and how individuals are able to overcome them. Two Dimensions of Intergenerational Decisions The intertemporal dimension of intergenerational decisions produces a form of psychological distance between the decision maker and those who experience the repercussions of the decision. Psychologically distant concepts and events are those that are not aspects of an individual’s immediate experience of reality (Liberman, Trope, & Stephan, 2007). When there is a time delay between a decision and its consequences, those consequences lack a sense of immediacy. An important ! nding from the research on intertemporal individual choice (i.e., decisions in which individuals choose between a bene! t for the self now and a bene! t for the self later) is that individuals tend to engage in time discounting. Time delay between decisions and consequences leads individuals to discount the value of those consequences (e.g., Frederick, Loewenstein, & O’Donoghue, 2002; Loewenstein, 1992). Speci! cally, people discount the value of commodities that they will consume in the future, demonstrating a strong preference for immediate rather than postponed satisfaction, and greater temporal distance exacerbates this tendency. Just as individuals discount 156 Business Ethics Quarterly the value of future outcomes to themselves, they also discount the value of future outcomes to others (Wade-Benzoni, 2008). Moreover, the effects of intertemporal distance in intergenerational decisions are compounded by interpersonal distance. When making tradeoffs between the wellbeing of oneself and that of others, there is a tension between self-interest and the desire to bene! t others. People may want to work towards ensuring the well-being of other people, but the consequences to the self feel more immediate and powerful than the consequences for others. For example, individuals favor their own direct interest over others when assigning wages (Messick & Sentis, 1983), determining legal settlements (Babcock, Loewenstein, Issacharoff, & Camerer, 1995; Loewenstein, Issacharoff, Camerer, & Babcock, 1993), and distributing bonuses (Diekmann, Samuels, Ross, & Bazerman, 1997), as well as favoring their indirect interest over their ! duciary responsibilities when functioning as accountants working on behalf of a client (Bazerman, Loewenstein, & Moore, 2002). Interpersonal psychological distance, which can be great or small, refers to the extent to which an individual experiences a connection with or af! nity for another individual or a collective entity (Hernandez, Chen, & Wade-Benzoni, 2006). When interpersonal psychological distance is great, individuals tend to place less weight on the consequences of their decisions for others relative to the weight they place on the consequences to themselves (e.g., Loewenstein, 1996; Loewenstein, Thompson, & Bazerman, 1989). Most intergenerational decisions involve high levels of interpersonal distance. In some cases, the particular persons who will experience the future repercussions may be impossible to identify (e.g., future organizational leaders who may not have joined the organization yet) or may even be yet to be born (e.g., future generations of citizens who will deal with the repercussions of global climate change over the next several centuries). As the interpersonal distance that characterizes an intergenerational dilemma increases, so does the tendency to discount the value of outcomes to future others (Wade-Benzoni, 2008). In sum, in intergenerational decisions, there is both intertemporal and interpersonal distance between the present decision maker and the future others who will be affected by the decision. Thus, future others are doubly removed from the decision maker’s immediate experience due to the combination of the two types of distance. The combined effect of these two types of distance leads to intergenerational discounting, or the tendency to discount the value of bene! ts and the harm of burdens left to future others (Wade-Benzoni, 2002a, 2008). Indeed, previous research indicates that individuals engage in intergenerational discounting and that enhanced distance on either dimension increases the extent of the intergenerational discounting (Wade-Benzoni, 2008). Researchers on psychological distance (Liberman et al. 2007) propose that when individuals experience psychological distance in one domain, they tend to extend that distance to other domains, and empirical research suggests that af! nity and intertemporal distance interact, such that the effect of each is greater when the other one is low (Wade-Benzoni, 2008), although additional research is needed to establish how these effects might interact with other factors that in. uence intergenerational bene! cence (Wade-Benzoni & Tost, 2009). 157 A Catalyst for Sustainable Decision Making in Organizations The psychological distance that characterizes intergenerational decisions has important implications for how decisions are approached in business and economic contexts. For example, consider the recent housing crisis. Borrowers overstated their income and were encouraged by mortgage brokers, who were rewarded for the size and quantity of loans regardless of the likelihood that they would be repaid. Appraisers, who received more business if homes were appraised above loan-to-value thresholds, facilitated these behaviors. Most of these parties could have foreseen the negative future consequences of their actions, but they failed to place a suf! cient value on those distant costs (which, to the extent that they were aware of them, they expected to accrue mostly to individuals other than themselves) in the face of the present personal bene! ts. Egocentrism and Ethical Decision Making If the research on intertemporal discounting and preference for the self in self-other tradeoffs indicates that the prospects for intergenerational bene! cence are bleak, research on bounded rationality and egocentric biases from the ethical decision making literature provide further reason to doubt the likelihood of intergenerationally-bene! cent behavior. These areas of research have focused on the nonconscious aspects of the ethical decision making process. Bounded rationality describes how individuals often rely on automatic responses to ethical decisions, and that in doing so, individuals’ implicit preferences can produce biases in their decisions. Research in this area has demonstrated that individuals often engage in automatic stereotyping (Banaji & Bhaskar, 2000), self-serving behavior on the part of ! duciaries (Banaji, Bazerman & Chugh, 2003; Chugh, Bazerman & Banaji; 2005), and unethical behavior in negotiations (Kern & Chugh, 2009). According to this research, people behave this way, not as a result of a calculated gamble that they will not be caught or that the punishment will be small, nor out of a callous disregard for their impact on others; instead, people tend to exhibit these behaviors because the context in which they are given information causes them to process information automatically, in a way that is nonconscious and beyond their control. This area of research is consistent with Haidt’s (2001) social intuitionist model of moral reasoning, which holds that ethical and moral decision making is primarily an intuitive process, with effortful and conscious re. ection on moral or ethical issues serving the purpose, not of improving the rationality or ethicality of the decision, but instead of justifying whatever action was indicated by an immediate affective reaction. In this way, individuals behave, not as intuitive scientists seeking truth, but as intuitive lawyers seeking vindication (Baumeister & Newman, 1994; Kramer & Messick, 1996). Taking the bounded ethicality and social intuitionist models of ethical decision making research together, a picture emerges in which individuals frequently have an automatic and intuitive affective reaction favoring their own material self-interest over any ethical or prosocial outcome, and then they search for a rationalization to justify the self-interested behavior. The research on egocentric interpretations of fairness provides an excellent example of this dynamic. Extensive research has demonstrated that when the interests 158 Business Ethics Quarterly of two individuals or groups are opposed, individuals who are personally involved in the situation exhibit biased perceptions of fairness (Babcock, et al., 1995; Bazerman & Neale, 1982; Neale & Bazerman, 1983; Wade-Benzoni, Tenbrunsel, & Bazerman, 1996; Walster, Walster, & Berscheid, 1978). Speci! cally, individuals’ fairness assessments of the various potential outcomes of a given dilemma tend to indicate that they view their preferred outcome as also the most fair and just outcome. This type of bias emerges as a result of dual motivations on the part of the individual. On the one hand, the individual is motivated to present a positive image of the self as a fair-minded, generous, and ethical person. On the other hand, the individual is also motivated to pursue his or her own self-interest by obtaining bene! ts and avoiding burdens. According to the social intuitionist model (Haidt, 2001) and the bounded ethicality view (Banaji et al., 2003), these biased judgments of fairness are the result of the individual’s initial intuitive preference for the self-interested option, followed by a re. ective defense of that option, in which the individual searches for objective grounds upon which to stake a claim for the fairness of the self-interested outcome. Indeed, research has indicated that in making such judgments, individuals do not realize that their judgments are skewed by a self-serving bias; furthermore, this effect has been demonstrated to generalize across cultures (Wade-Benzoni, Okumura, Brett, Moore, Tenbrunsel, & Bazerman, 2002). Ethical decision making research also suggests that there are at least two factors that are likely to exacerbate these egocentric tendencies in intergenerational contexts. First, research has demonstrated that individuals are likely to ignore their impact on others unless the decision framework reaches a level of moral intensity that allows them to recognize a moral issue (Flannery & May, 2000; Jones, 1991; Morris & McDonald, 1994; Singhapakdi, Vitell, & Frank, 1999). Intergenerational con. icts are characterized by a low moral intensity, as they can involve diffuse concentrations of effect (affecting large numbers of people), low proximity (those affected are unknown to the decision maker), low temporal immediacy (due to the intertemporal distance that separates intergenerational decisions and consequences), and unknown magnitude and likelihood of effect. Thus, the low level of moral intensity that characterizes intergenerational decisions would be expected to impede intergenerational bene! cence by minimizing the salience of the moral issue (Kim, Diekmann, & Tenbrunsel, 2003). Second, the ambiguity of outcomes and attributions associated with intergenerational dilemmas provides ample opportunity for “strategic ignorance,” wherein people ! nd ways to remain blind to the knowable negative effects their actions have on others (Dana, Weber, & Kuang, 2007) or to cheat while maintaining a positive self concept (Mazar, Amir, & Ariely, 2008). Returning to the example of the housing crisis, the egocentric short-term focus of many of the actors was exacerbated by the fact that the future costs, though apparent in retrospect, were ambiguous in terms of the extent of the exact cost to the parties involved, the extent of risk to third parties, the total number of defaults, or the likelihood of any particular customer defaulting. This ambiguity allowed individuals to pursue a strategic ignorance to the dangers their decisions posed for both themselves as individuals and for society as a whole. 159 A Catalyst for Sustainable Decision Making in Organizations Indeed, recent research in intergenerational decision making has demonstrated the existence and persistence of egocentric biases in intergenerational contexts. Speci! cally, ! ndings indicate that individuals judge lower allocations to future generations as more fair when they are part of the current generation of decision makers than when they are part of the future generation who experiences the consequences of those decisions (Wade-Benzoni, Hernandez, Medvec, & Messick, 2008). Thus, members of present generations have been shown to demonstrate egocentric biases (in comparison to neutral third-party judges), and these biases in turn produce a tendency to act in favor of the self and against the interests of future others (WadeBenzoni et al., 2008). In sum, a review of research on self-other trade-offs, intertemporal individual choice, and egocentrism in ethical decision making suggests that the combination of interpersonal and intertemporal distance that characterizes intergenerational decisions minimizes the prospects for intergenerational bene! cence. We explain below, however, that it is precisely this same combination of interpersonal and intertemporal distance that makes it possible for decision makers to leave a legacy. Therefore, we argue that when individuals are motivated to leave a legacy, these dimensions of distance may in fact increase, rather than decrease, the likelihood of intergenationally-bene! cent behavior.