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Can You Have It All? Trade-Offs, Tensions, And The Esg Tightrope In Entrepreneurial Decision-Making

Author

Listed:
  • Sumaya Islam

    (Paderborn University)

  • Tobias Buchta

    (Paderborn University)

  • Colin Wooldridge

    (Texas A&M University-Corpus Christi)

Abstract

Entrepreneurial decision-making often unfolds in an environment of uncertainty, resource constraints, and conflicting value systems, intensifying the tension between mission-oriented ideals and pragmatic economic constraints. In this paper, we analyze entrepreneurs' willingness to compromise on environmental, social, and governance (ESG) criteria and their underlying cognitive justifications. Our study with 79 entrepreneurs combines a conjoint design with validated scales for moral disengagement (MD) and founder identity. We investigate (a) the entrepreneurs' preferences for ESG attributes, (b) their general willingness to compromise on ESG criteria, and (c) the differences between social and commercial entrepreneurs. Our results show that first, entrepreneurs' willingness to compromise on ESG criteria is positively related to their level of MD, second, entrepreneurs' willingness to compromise on ESG criteria depends on their founder identity: missionaries, common among social entrepreneurs, show lower MD and lower willingness to compromise on ESG criteria, while darwinians, common among commercial entrepreneurs, show higher MD and higher willingness to compromise on ESG criteria, and third, entrepreneurs have a blind spot for the governance criterion when making ESG-related decisions. Our study contributes to the literature on entrepreneurship and business ethics by offering a context-specific theoretical model of MD in the new venture creation process and by providing evidence of differences in MD between social and commercial entrepreneurs. Thus, the findings reveal that MD and its interaction with founder identity play a key role in influencing ESG decisions, which in turn impact the legitimation and reputation of new ventures, stakeholder trust, and progress in achieving the United Nations’ Sustainable Development Goals. Besides, they have implications for investors, regulators, and entrepreneurship ecosystem builders who seek to foster sustainable new ventures amid ESG reporting mandates and accountability pressures.

Suggested Citation

  • Sumaya Islam & Tobias Buchta & Colin Wooldridge, 2026. "Can You Have It All? Trade-Offs, Tensions, And The Esg Tightrope In Entrepreneurial Decision-Making," Working Papers Dissertations 169, Paderborn University, Faculty of Business Administration and Economics.
    • Handle: RePEc:pdn:dispap:169
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    References listed on IDEAS

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