Guilt, Shame, and Reparative Behavior: The Effect of Psychological Proximity
Majid Ghorbani • Yuan Liao •
Sinan Çayköylü • Masud Chand
Received: 10 January 2012 / Accepted: 6 May 2012
� Springer Science+Business Media B.V. 2012
Abstract Research has paid scant attention to reparative
behavior to compensate for unintended wrongdoing or to the
role of emotions in doing the right thing. We propose a new
approach to investigating reparative behavior by looking at
moral emotions and psychological proximity. In this study,
we compare the effects of moral emotions (guilt and shame)
on the level of compensation for financial harm. We also
investigate the role of transgressors’ perceived psychologi-
cal proximity to the victims of wrongdoing. Our hypotheses
were tested through a scenario based questionnaire on a
sample of 261 participants. Analyses indicate that (1) guilt
has a stronger effect on the level of compensation than
shame; (2) psychological proximity influences the level of
guilt, shame, and compensation; and (3) shame interacts
with psychological proximity to predict compensation,
whereas guilt mediates the relationship between psycho-
logical proximity and compensation.
Keywords Construal level theory � Emotional ethics � Ethical decision making � Guilt � Shame � Psychological proximity � Reparative behavior � Unintended transgression
The wish to relieve guilt may motivate a confession,
but the wish to avoid the humiliation of shame may
Paul Ekman, Telling Lies
The issue of managerial ethical decision making and
doing the right thing has gradually gained considerable
attention in both academic and practitioner circles. Three
of the past four themes of the Academy of Management
Meetings focused on issues related to ethical decision-
making: ‘‘Dare to Care’’ in 2010, ‘‘Green Management
Matters’’ in 2009, and ‘‘Doing Well by Doing Good’’ in
2007. However, despite the focus in academic research, as
well as calls for ethical decision making among businesses
by public officials as diverse as President Barack Obama
(Connor 2010) and Pope Benedict XVI (Butt 2009), the
enactment of laws such as the Dodd Frank Wall Street
Reform and Consumer Protection Act of 2010 and the
Sarbannes-Oxley Act of 2002, we still face scandals such
as Bernie Madoff’s ponzi scheme, financial meltdowns,
and News of the World’s tapping of individuals’ phones. It
thus becomes imperative to find ways in which organiza-
tions and managers can voluntarily and more effectively
repair the damages that result from such actions. This will
also help us understand how organizations or individuals in
This research was partially supported by the Fundamental Research
Funds for the Central Universities, and the Research Fund of Renmin
University of China (Project No. 12XNF032).
M. Ghorbani (&) Department of General Management, School of Business,
Renmin University of China, Mingde Business Building,
No. 59 Zhongguancun St. Haidian Dist., Beijing 100872,
People’s Republic of China
Y. Liao � S. Çayköylü Beedie School of Business, Simon Fraser University,
500 Granville St., Vancouver, BC V6C 1W6, Canada
Wichita State University, 1845 Fairmount, Box 88, Wichita,
KS 67260, USA
J Bus Ethics
organizations responsible for wrongdoing and bad decision
making can be best made to compensate their victims not
just because of the fear of the law but also because they
believe that they have done something that deserves
In this paper, we propose a new approach for investi-
gating reparative behavior by looking at moral emotions
and psychological proximity. Our study sheds some light
on the differences between the effects of guilt and shame
on compensation, in the context of different levels of
psychological distance between transgressors and victims
in business transactions. Previous research by management
scholars has largely overlooked how emotions affect
reparative behavior. For example, a search (as of Septem-
ber 2011) in 28 top management journals (e.g., Academy of
Management Review, Academy of Management Journal,
Journal of Management, Administrative Sciences Quar-
terly, and Business Ethics Quarterly) including the Journal
of Business Ethics found less than thirty articles studying
the effect of emotions on ethical behavior (e.g., Bodolica
and Spraggon 2011; Cohen 2010; Connelly et al. 2004;
Fulmer et al. 2009; Hartman 2008; Ho and Redfern 2010;
Mencl and May 2009; Natale and Sora 2010; Payne et al.
2011; Schweitzer and Gibson 2008), and on compensating
laid-off workers (e.g., McMahon 1999; Pfeifer 2007). More
than half of these articles appear in a single source, the
Journal of Business Ethics, and none of the articles dealt
with the issue of how emotions and psychological prox-
imity affect reparative behavior.
In many purely psychology and social psychology
related journals, the relationships among emotions, ethical
decision-making and general reparative behavior have been
studied for decades (e.g., Eisenberg 2000; Maitlis and
Ozcelik 2004; Tangney et al. 1996; Tangney et al. 2007).
Shame and guilt are two of the emotions that are recog-
nized as especially relevant to ethical decision-making and
compensatory behavior (Eisenberg 2000; Tangney 1991;
Tangney et al. 2007). While scholars agree that shame and
guilt are two distinct emotions and lead to different actions,
the exact effect of guilt and shame on compensating the
worse-off party is an understudied area (Brown et al.
2008). Studies that have investigated these emotions and
their effects on compensation found inconsistent and
sometimes contradicting results (e.g., Bateman et al. 2003;
Iyer et al. 2003; Iyer et al. 2007; Leach et al. 2006). While
these studies and their findings are important, they do not
resolve the question about what makes transgressors
compensate victims of a wrongdoing. Despite evidence of
their importance in social psychology, constructs such as
guilt and shame and their effects on ethical decision-
making have not been studied to the same degree in
management and business scholarship. This becomes even
more important when we realize that even well intentioned
people sometimes make bad decisions, or engage in
unethical acts with the desire to benefit their firms
(Umphress and Bingham 2011), and organizations need to
deal with the consequences of these decisions. This study
offers a concrete investigation of transgressors’ compen-
sation level based on their level of guilt and shame, and
provides an explanation as to why we see these differences.
To understand ethical decisions and behavior, it is
important to study the role of emotions. Emotionally
motivated behaviors are ordered in the sequence of (a) an
action occurring, (b) an emotion is experienced, and
(c) subsequent behaviors based on the experience (e.g.,
Deci 1996). For example, when an individual does some-
thing that harms (or benefits) another party, the agent
experiences emotions such as guilt (or fulfillment). This
emotion subsequently encourages the agent to avoid (or re-
engage in) such behavior, at least, in the near future and
under similar situational factors.
In addition, we examine the role of psychological
proximity between transgressors and their victims (Brass
et al. 1998). It is not surprising that people tend to favor
those whom they feel close to (e.g., family and friends) and
thus offer them higher compensations (Wellman and
Wortley 1989). Yet, it is not clear whether the mechanism
leading to compensation (in this study, guilt and shame)
works the same way when the transgressor feels close to
the victim, as it does when the transgressor feels distant
from the victim. While the term ‘‘proximity’’ can refer to
more than only ‘‘psychological proximity,’’ for ease of
discussion we use proximity to indicate psychological
proximity only, unless clearly stated otherwise. Proximity
here means actors’ perceived psychological closeness to
In the next section, we put forth a series of hypothesis by
reviewing literature on shame and guilt. Then, we expand
on the concept of psychological proximity and its impli-
cations to develop hypotheses about its interaction with
shame and guilt in determining levels of compensation to
the victims of a wrongdoing. We then outline our meth-
odology and explain our results, and discuss their impli-
cations for both theory and practice.
This study investigates the effect of moral emotions on
compensatory decision-making and compares these effects
across different levels of perceived psychological distance.
Moral emotions are the link between internal standards and
behaviors and decisions that are morally acceptable to the
agent (Tangney et al. 2007). These self-conscious emotions
are not based purely on internal validations of self, but are
also based on agents’ understanding of how they have been
M. Ghorbani et al.
evaluated by others (Leary 2007). From the pool of moral
emotions that can determine behavior, we have chosen the
two most referenced emotions, guilt, and shame (Tangney
et al. 2007). We argue that these two emotions, while often
used interchangeably by managers (Leith and Baumeister
1998; Tangney 1991), have different effects on decisions.
Several studies have investigated the psychological dif-
ferences between shame and guilt (Brown et al. 2008;
Leary 2007; Leith and Baumeister 1998; Lindsay-Hartz
1984; Orth et al. 2010; Tangney 1991; Tangney et al.
2007); however, their differences in affecting ethical
decision-making remain substantially under investigated
(Brown et al. 2008). Furthermore, their effect is unknown
when the transgressed are at different levels of psycho-
logical distance from the perpetrator. To explore the effect
of these two emotions on compensation, we first introduce
the two concepts and describe how they are different from
Shame and Guilt
Many people can recall moments of feeling guilty or
ashamed distinctively, but they might also use the two
terms interchangeably, as these emotions have many sim-
ilar characteristics (Leith and Baumeister 1998; Tangney
1991). Both guilt and shame are considered negative
emotions (Leary 2007; Tangney 1991; Tangney et al. 1998;
Tangney et al. 2007), but they differ in their relationships
to morality. Smith et al. (2002) suggested that shame is
relevant to both moral and non-moral related transgres-
sions, but guilt is only a result of moral transgressions.
Both emotions are cognitive responses as one perceives
being viewed by others following a behavior or decision
(Leith and Baumeister 1998; Tangney et al. 2007).
Each of these emotions has distinctive causes and effects
on the actor and people around them. Guilt is defined as an
agitation-based emotion of regretting a wrong action or
decision (Ferguson and Stegge 1998). Based on this defi-
nition, guilty transgressors perceive the wrongdoing aspect
of their actions or decisions, assume responsibility for
them, and desire to find a way to either undo the wrong or
punish themselves (Eisenberg 2000; Lindsay-Hartz 1984).
In this way, the transgressor is capable of putting him or
herself in victims’ shoes and seeing the issue from their
perspective (Leith and Baumeister 1998; Tangney 1991);
hence these emotions are called cognitive responses to a
behavior. Since guilty people can feel the pain as the vic-
tims feel, they are motivated to take other-oriented actions,
such as apologizing to and compensating the victim, in
order to eliminate the negative feeling. Guilty people per-
ceive their behavior, but not themselves, as the target of
criticism (Tangney 1991); therefore they can correct their
wrongdoings without feeling humiliated or threatened.
Shame, on the other hand, is a dejection-based emotion
of condemning one’s entire self (Ferguson and Stegge
1998; Gramzow and Tangney 1992; Leary 2007; Tangney
et al. 1996). When ashamed, the transgressor feels like the
target or even victim of criticism (Tangney et al. 1996).
People feel ashamed when they feel they are bad people
(Leary 2007). Feeling ashamed, the transgressors devalue
themselves and fear contempt from others (Ferguson and
Stegge 1998). Emotions of shame are more painful than
those of guilt, because ashamed people perceive an attack
to their self and identity (Lindsay-Hartz 1984; Tangney
1991; Tangney et al. 2007). Because of the threat to the self
and fear of scorn, ashamed people feel like the target of
criticism and usually respond by self-oriented actions, such
as avoiding others and hiding away (Orth et al. 2006; Orth
et al. 2010; Tangney 1991).
Ashamed people perceive that blame is focused on
themselves, but guilty people perceive it to be focused on
their behavior (Leary 2007; Tangney et al. 2007). Ashamed
individuals are more likely to blame others or get angry at
them for creating shame-eliciting situations, and are not
likely to undertake any measure to change the wrongdoing
(Leith and Baumeister 1998; Tangney 1995). Guilt, in
contrast, being based on the ability to take other people’s
perspectives, a cognitive ability that did not result from
shame, is more likely to activate senses and behaviors that
can benefit others (Leith and Baumeister 1998). For
example, de Hooge et al. (2007) found that ashamed people
are not motivated to cooperate. However, they found that
individuals, who would usually act on self-interest, are
more likely to cooperate when they feel guilty. Unlike
shame-prone individuals, guilt-prone individuals are more
likely to take responsibility for their actions and correct
their wrongdoings (Tangney et al. 2007).
Therefore, it seems that the guilt and shame produced by
transgressions are not equally responsible for the compen-
satory behavior that follows. Guilty individuals would try to
correct the transgression, and either accept retribution from
the victim or give out compensation. We expect guilty
people to take some measures to compensate their victims.
Ashamed transgressors, on the other hand, would be more
likely to feel like they want to hide from everyone and as a
result, would be less likely than transgressors who consider
themselves guilty to compensate their victims (Leith and
Baumeister 1998; Tangney 1995). Therefore, we propose
that guilty people would be more willing than ashamed
people to compensate victims of their transgression.
H1 Guilt is more likely than shame to lead to compen-
Both emotions, as discussed at the beginning of this
section, are based on discrepancies between one’s behavior
and other people’s expectations. Since people evaluate
Guilt, Shame and Psychological Proximity
themselves from the perspectives of significant others (e.g.,
friends, relatives, spouses, and children) as well as every-
body else around them, the level of guilt and shame in
people should be a product of strength and weakness of ties
with the victim. In the next section, we discuss how psy-
chological proximity affects the level of guilt, shame, as
well as compensation.
Based on the theory of self-discrepancies (Higgins 1987),
there is an actual self and an ought self, and they are dif-
ferent from each other most of the time. Actual self refers
to what we are and how we behave. Ought self is derived
from other people’s, especially family and friends’,
expectations of us. When there are inconsistencies between
what we actually do (actual self) and what we are expected
to do (ought self), we may feel guilty or ashamed. For
example, we are expected to look out for our family
members. If someone secretly puts his or her family at risk
for his or her own financial gains, this person will feel
guilty and/or ashamed in front of the family. These
assumptions are consistent with the theory of planned
action (Fishbein 1967; Fishbein and Ajzen 1975).
The theory of planned action (Fishbein 1967; Fishbein
and Ajzen 1975) suggests that individuals’ actions are
affected by normative beliefs and subjective norms. Nor-
mative beliefs refer to behaviors that are acceptable by
people close to us—collectively categorized as ‘‘significant
others’’—such as parents, siblings, spouse, friends, and
family. For example, being honest to each other is a nor-
mative belief among family members and close friends.
Subjective norms are derived from norms in the broader
society, and include people with looser ties to us than
significant others. These people, in addition to significant
others, could include community, acquaintances, and any-
one related to us based on the context, location and time
circumstances. Both normative beliefs and subjective
norms play an important role in construing our ought self.
What our significant others expect and what the general
society expects us to do are both parts of our obligations.
At the center of this discussion is whether people closer
to us (e.g., significant others) have more impact on our
ought selves than strangers. If so, when significant others
are involved, discrepancies resulting from the violation of
normative standards have stronger influence on emotions
compared to when strangers are involved. While both the
theory of planned action and theory of self-discrepancy
give equal weight to significant others and to general
society, it seems intuitive that people closer to us might
play a more important role in influencing our behavior.
First, significant others are fewer in number compared to
the broader community and society where individuals live,
but each category has an almost equal weight in the theo-
ries. Therefore, any individual significant other being a
friend, relative, teacher, or colleague, has more influence
over our behavior and what is accepted from us than an
individual member of the broader society. Second, signif-
icant others are also members of the broader society.
Their influence in setting or defining acceptable rules of
subjective norms is minor, but it still exists. Therefore,
significant others have a larger influence on us and our
behavior than others.
The importance of significant others is manifested as
perceived closeness to significant others, termed ‘‘psycho-
logical distance’’ or inversely put ‘‘psychological proxim-
ity’’. Psychological distance can also be used to describe
actors’ subjective experience of objects, events, or other
people in terms of their proximity in time and location
(Trope and Liberman 2010). The point of reference for
psychological distance is self, and distance is measured
based on perceived proximity to self (Trope and Liberman
2010). For instance, the physical distance between two
people on a crowded bus is an absolute value, such as one
foot. However, one person might perceive this distance as
too close and the other might think this is an acceptable
distance. In terms of relationships, psychological proximity
(or psychological distance) toward another person is one’s
subjective experience of the perceived closeness (or dis-
tance) to that person. This latter definition is what we have
used in our study.
The idea of psychological proximity has been used in
research on management and ethical decision-making
(Brass et al. 1998; Flannery and May 2000; Jing et al.
2009; Jones 1991; Mencl and May 2009; Novicevic et al.
2008). For example, Jones (1991) proposed an issue-con-
tingent model that includes six constructs: (1) magnitude of
consequences, (2) social consensus, (3) probability of
effect, (4) temporal immediacy, (5) proximity, and (6)
concentration of effect. In making ethical decisions, Jones
argued that ‘‘intuitively, people care more about other
people who are close to them (socially, culturally, psy-
chologically, or physically) than they do for people who
are distant’’ (Jones 1991, p. 376). Perpetrators’ ethical
actions are contingent on how close they perceive their
victims to be; the closer the victim is perceived, the more
likely the decision will be ethical.
Brass et al. (1998) used social network theory to explain
the importance of proximity in ethical behavior. Our social
ties, they argued, are grouped as strong ties and weak ties.
Close relationships such as those we have with our in-
groups (e.g., family and close friends) are stronger ties, and
relationships with acquaintances and people we only know
(i.e., out-groups) are weak ties (Granovetter 1973). Brass
et al. (1998) also proposed that stronger ties diminish the
effect of situational and normative constructs.
M. Ghorbani et al.
Mencl and May (2009) tested the influence of psycho-
logical and physical proximity in interaction with magni-
tude of consequences on ethical decision-making. They
defined psychological proximity as agents’ perceived
closeness to others, and physical proximity as the physical
distance to a potential victim. They suggested that deci-
sion-makers’ decisions about employees are affected by the
interaction between their information about the conse-
quences of their decision and how close they feel to the
employee (Mencl and May 2009). They did not, however,
find the two types of proximity to have significantly dif-
ferent effects on ethical decision-making.
The research reviewed so far indicates that emotions are
created by peoples’ actual behavior violating their set of
expected behavior (Higgins 1987). So the set of stan-
dards—whether set by subjective norms, normative
behavior, ought self, ideal self or actual self—determine
peoples’ actual behavior as well as their intended behavior
(Higgins 1987). Emotions derived from the inconsistencies
between standards and behaviors are products of peoples’
relationships with others (Tangney 1995). Baumeister et al.
(1994) also posited that the more people feel concerned
about one another, the more likely they would feel guilty if
they did something wrong. This indicates that guilt arises
from within relationships, as transgressions against people
important to the wrongdoer creates more guilt (Baumeister
et al. 1994). Therefore, we propose here that as the psy-
chological distance between perpetrator and victim redu-
ces, failure in matching standards with behavior would
result in more negative emotions of guilt and shame.
H2a The closer the perpetrators perceive their psycho-
logical proximity to their victims, the guiltier they feel.
H2b The closer the perpetrators perceive their psycho-
logical proximity to their victims, the more ashamed they
Although there has been limited attention on the rela-
tionship between psychological proximity and compensa-
tion, there is a strong body of literature about advantages
people enjoy from relationships and ties (Chand and
Ghorbani 2011; Chow and Ng 2004; Cohen et al. 2006;
Ibarra 1995; Neyer and Lang 2003; Rowley 1997; West-
phal and Milton 2000). For example, theories of kinship
(Korchmaros and Kenny 2006; Neyer and Lang 2003) and
network theories (e.g., Chand and Ghorbani 2011; Grano-
vetter 1973; Jing et al. 2009; Stam and Elfring 2008; Zhang
et al. 2008) suggest that stronger ties (e.g., family and close
friends) are more helpful during difficult times than weaker
ties (e.g., acquaintances). Korchmaros and Kenny (2006)
also suggested that family relationships and perceived
closeness could predict helping behavior. Together, these
studies indicate a potential connection between proximity
and favors. When one is closer to another and has stronger
tie with the person, he or she is more likely to act in ways
which will benefit the other party (Wellman and Wortley
While there is a lack of direct empirical support from the
literature because of the dearth of studies done in this
regard, we consider compensation after wrongdoing as a
benefit to the victim, and based on our deductions from
kinship and network theories, expect proximity to affect the
potential for compensation.
H2c The closer the perpetrators perceive their psycho-
logical proximity to their victims, the more likely they are
to compensate them (victims) for the wrongdoing.
Interaction of Shame and Guilt with Proximity
Other than the direct impact on compensation, proximity
may also interact with shame and guilt in determining the
level of compensation. As indicated earlier, there is a
dearth of empirical evidence on behavioral consequences
of shame and guilt with respect to compensating others
(Brown et al. 2008). Nonetheless, studies on compensation
of out-groups provide some indirect evidence of the role of
In one study, Iyer et al. (2003) investigated the effect of
group-level guilt and shame on the tendency to compensate
out-groups, and they concluded that ‘‘White guilt,’’ felt by
European Americans, could predict support of this group
for programs such as affirmative action that attempt to
compensate African Americans (i.e., out-group members)
for historical racial discrimination. However, this study
does not distinguish between the effects of guilt vis-à-vis
shame, because shame was included as an item measuring
guilt. In another study, Iyer et al. (2007) investigated the
effect of guilt and shame separately and did not find guilt to
predict any action or behavior. The results of this study
were somewhat contradicted by Brown et al. (2008) who
also examined group-level shame and guilt, and compen-
sation of out-groups for historical wrongdoings. They
found guilt to have a longitudinal causal effect on com-
pensating out-groups for historical wrongdoing, but did not
find shame to have a similar effect. While there are dif-
ferences in the outcomes of these studies, one clear theme
that we can distil is that guilt works the same when it
comes to out-groups and in-groups; therefore, we do not
expect a moderating effect of proximity on the relationship
between guilt and compensation.
H3a Guilt’s effect on compensation is the same across
different level of psychological proximity.
However, shame seems to have a stronger predictive
power on compensation when the victims are out-group
Guilt, Shame and Psychological Proximity
members. One common theme in all the above studies
(Brown et al. 2008; Iyer et al. 2003) is that they follow
Lickel et al. (2006) to suggest that shame determines
compensation because the group tries to remove the neg-
ative image from the in-group and restore its own good
reputation. For example, Brown et al. (2008) noticed that
historical group shame could predict the tendency to
compensate out-groups, but this effect was mediated by the
intention to improve or maintain in-group reputation. Iyer
et al. (2007) found that American and British peoples’
shame of their countries’ occupation of Iraq predicted
reparative behavior (i.e., support for withdrawal of foreign
troops from Iraq). While these studies focus on group level
shame and guilt, we argue that the same logic should be
applicable, to some extent at least, to individuals as well.
Individuals’ shame is related to their personal image.
Once individuals feel that their image has been tarnished, it
is important for them to restore their reputations. However,
transgressions do not easily ruin one’s reputation in the
eyes of significant others. Those with close psychological
proximity have a thorough understanding of one another,
so reputations are relatively stable. On the other hand, there
are usually fewer interactions with individuals who are
psychologically distant, and each individual interaction,
good or bad, has a stronger impact on one’s reputation.
Therefore, endorsing or engaging in compensatory actions
can dramatically improve reputations in the eyes of people
who are psychologically distant. As such, we suggest that
perpetrators’ shame for wrong doing predicts their com-
pensatory action more when victims are psychologically
H3b Psychological distance positively moderates shame’s
effect on compensation, such that the higher distance, the
stronger effect of shame on compensation.
Interactions between the two moral emotions and psy-
chological proximity are different. When individuals feel
guilty about transgressions, they want to compensate the
victims regardless of their psychological proximity. In
contrast, individuals who feel ashamed of their transgres-
sions are more likely to compensate people who are more
psychologically distant, than those who are psychologically
We designed a within-subject scenario study to investigate
our hypotheses. Participants read a story about a manager
who was facing a decision to compensate for his or her
wrongdoing toward different victims. We manipulated the
type of victims along the dimension of psychological
proximity, and tested whether the level of shame and guilt
influenced the ethical decisions regarding compensations
made toward victims at different levels of psychological
proximity. Types of victims included family members,
friends, strangers with concrete descriptions, and strangers
with abstract descriptions. Construal Level Theory sug-
gests people feel psychologically closer when the
description of the target is concrete than when it is abstract
(Trope et al. 2007), and thus creating two types of strangers
leads to further examination of the role of psychological
Two hundred and sixty-one undergraduate business students
from a large west coast university participated in exchange
for partial course credit. There were 145 females and 116
males. Their mean age was 21.17 years (SD = 2.53).
Participants were asked to imagine that they were manag-
ers and read about an ethical dilemma they must solve. In
the scenario, the manager had sold garden-level housing
units to different people. Later, the manager receives a
report from an architect suggesting if a flood occurs there is
a significant possibility of massive damage to the units.
The manager had not done anything to make these homes
flood proof. One year later a flood occurs in the area and
most units are flooded. However, lawyers are in disagree-
ment as to whether the manager is legally responsible to
compensate homeowners. Participants were then asked to
indicate how much they would like to compensate each of
the following owners: (1) their parents, (2) close family
members or relatives other than their parents, (3) close
friends, (4) a retiree who is looking for a low maintenance
investment that could generate rental income for him or
her, (5) a middle-income couple who are expecting their
first child and in need of a bigger and more affordable
house, (6) a stranger they met at a social occasion, and (7) a
total stranger they know nothing about. Participants were
also asked to report how ashamed and guilty they felt
facing each of the above owners before they made the
decision to compensate. They then answered questions
on control variables and filled in their demographic
Shame and Guilt
Shame and guilt were measured with items drawn from pre-
vious studies (e.g., Dahl et al. 2005; Harder and Zalma 1990).
We drew selected items from previous studies to create the
M. Ghorbani et al.
shame and guilt scale for the current research because (1)
existing scales focus on shame- and guilt-proneness instead of
feelings after transgressions, and (2) we were concerned the
survey would be too long for our participants if we used a
16-item scale. We asked a five person focus group to choose
items from Harder and Zalma’s (1990) 16-item pool whose
meanings most resembled feelings of guilt and shame. Three
items for shame and four items for guilt, which were thought
to relate to corresponding constructs where selected. Con-
sultation with three experts in scale development suggested
those items have high face validity. The three items mea-
suring shame are ashamed, embarrassed, and foolish; and the
four items measuring guilt are guilty, remorseful, worried
about upsetting someone, and worried about hurting some-
one. The internal consistency reliabilities, as indicated by
Cronbach’s alpha, were above 0.80 for shame and 0.83 for
guilt on all seven target owners.
Participants indicated the portion of the total damage they
would be willing to compensate to each owner on a 5-point
Likert scale (1 = 0 %, 2 = 25 %, 3 = 50 %, 4 = 75 %,
and 5 = 100 %).
Participants indicated how close they felt to each owner on
a 5-point Likert scale (1 = not close at all, 5 = very
close). Proximity was used as manipulation check.
Internal Locus of Control
Locus of control was measured by an eight-item sub-scale
of internal locus of control from Levenson and Miller
(1976) and included as a control variable in line with
previous research (Tangney et al. 1996; Tracy and Robins
2006; Treviño 1986). Participants reported their locus of
control by rating a statement about themselves on a 5-point
Likert scale (1 = strongly disagree to 5 = strongly agree).
The internal consistency reliability, as indicated by Cron-
bach’s alpha, was 0.75. The average score of the eight
items was calculated and used as a control variable in
regressions (Detert et al. 2008; Treviño 1986).
Participants indicated how religious they were on a 5-point
Likert scale (1 = not religious at all, 5 = very religious).
This variable was used as a control variable in regressions
in line with related previous research (de St Aubin 1996;
Quiles and Bybee 1997; Tangney 1992).
A pilot study showed the seven types of owners gathered
around three clusters based on the psychological distance
participants felt toward them. Based on Construal Level
Theory and the results from the pilot study, we categorized
the seven owners into three groups: (1) in-groups including
parents, close family members or relatives other than par-
ents, and close friends, (2) strangers with concrete
descriptions (strangerCON) including retiree and middle
class couple, and (3) strangers with abstract descriptions
(strangerABS) including a stranger they meet at a social
occasion, and a total stranger they knew nothing about. The
average proximity scores were calculated for each group.
In order to confirm the three groups were different on
psychological distance, we first ran a repeated measures
analysis of variance (ANOVA) and found a significant
difference in proximity among the three groups (F(2,
259) = 1186.73, p \ 0.01). Two post hoc paired-samples t tests showed participants felt closer to their in-groups than
to strangerCON (t(260) = 33.18, p \ 0.01), and they felt closer to strangerCON than to strangerABS (t(260) =
10.34, p \ 0.01). These results indicated that participants felt closest to their in-groups, followed by strangerCON,
and felt most distant to strangerABS. The results supported
our logic of grouping, and thus all key variables were
averaged within each group. We conducted the following
analyses within each group first and then examined how the
hypothesized regression model differed across the three
groups. Means, standard deviations, and correlations of key
variables can be found in Table 1.
In order to test Hypothesis 1, we examined whether and
how shame and guilt predict ethical decision-making
(compensation) within each group. We ran a multiple
regression to investigate the proposed model in each group
separately. Age, gender, degree of religiosity, and internal
locus of control were entered as control variables. For in-
groups, guilt (b = 0.44, p \ 0.01), but not shame (b = -0.06, p = ns), predicted compensation. For stranger-
CON, both shame (b = 0.30, p \ 0.01) and guilt (b = 0.30, p \ 0.01) predicted compensation. For strangerABS, both shame (b = 0.25, p \ 0.01) and guilt (b = 0.27, p \ 0.01) predicted compensation. The results partially supported Hypothesis 1 as guilt was a stronger predictor
than shame for in-groups, but both emotions predicted
compensation equally well for strangers. Detailed regres-
sion results are presented in Table 2.
Guilt, Shame and Psychological Proximity
ANOVAs and t Tests
In order to test whether proximity affects the level of
shame, guilt, and compensation (H2a-c), we ran three
repeated measures ANOVAs with group as a within-sub-
ject factor. Results indicated a significant difference on
shame across the three groups (F(2, 259) = 185.41,
p \ 0.01). Two post hoc paired-sample t tests showed that participants indicated higher levels of shame to their in-
groups than to strangerCON (t(260) = 8.85, p \ 0.01), and higher levels of shame to strangerCON than to stranger-
ABS (t(260) = 13.87, p \ 0.01). Analyses on guilt and compensation showed similar patterns. Participants felt
most guilty and offered the highest compensation to their
in-groups, followed by strangerCON, and felt least guilty
and offered lowest compensation to strangerABS. Consis-
tent with our predictions, lower levels of psychological
proximity lead to higher levels of shame, guilt, and com-
pensation. Results of repeated measures ANOVAs and
paired-sample t tests for each variable can be found in
To test Hypothesis 3, we examined whether the regression
model differs across the three groups. We first compared
the in-group with both stranger groups to determine whe-
ther there is an overall effect of grouping between in-
groups and strangers. Following guidelines for testing
moderation using ordinary least squares (OLS) regression
in within-subject designs (Judd et al. 2001), we found a
marginally significant difference in the regression coeffi-
cient of shame on compensation among the three groups
(t = 1.69, p \ 0.10), but no difference in the regression coefficient of guilt on compensation (t = -1.20, p = ns).
In addition, guilt (t = 4.64, p \ 0.01) mediated the effect of grouping of proximity on compensation.
Next, we ran two post hoc regressions to further inves-
tigate the moderating effect of proximity on the relation-
ship between shame and compensation. Comparing in-
group and strangerCON, we found evidence that the effect
of shame on compensation was moderated by proximity
(t = -2.44, p \ 0.05). Comparing strangerCON and strangerABS, we found shame was not moderated by
proximity (t = 0.50, p = ns). Overall the results suggest
that when facing in-groups, the more guilty people feel, the
more likely they are to offer higher levels of compensation
to victims. However, the level of shame does not affect the
decision in the same way as that of guilt does. When facing
strangers, regardless of how concretely or abstractly
they are described, people make decisions based on both
how ashamed and guilty they feel toward the strangers.
Regression results are depicted in Fig. 1.
Taken together, our results supported our hypothesis that
the degree to which perpetrators feel guilty or ashamed,
and their subsequent decisions to compensate victims, are
Table 1 Means, standard deviations, and correlations of key variables
Variable 1 2 3 4 5 6 7 8 9 10 11 12
1. Proximity in-group –
2. Proximity stranger
3. Proximity stranger
-0.14* 0.42** –
4. Shame in-group 0.21** 0.07 -0.08 –
5. Shame stranger
0.13* 0.24** 0.06 0.59** –
6. Shame stranger abstract -0.00 0.16** 0.26** 0.27** 0.69** –
7. Guilt in-group 0.38** 0.11 -0.11 0.78** 0.53** 0.24** –
8. Guilt stranger concrete 0.27** 0.32** 0.06 0.48** 0.77** 0.52** 0.64** –
9. Guilt stranger abstract 0.09 0.21** 0.30** 0.26** 0.48** 0.88** 0.34** 0.65** –
10. Compensation in-
0.30** 0.13* -0.02 0.28** 0.30** 0.18** 0.39** 0.34** 0.19** –
11. Compensation stranger
0.18** 0.29** 0.16* 0.20** 0.55** 0.39** 0.25** 0.56** 0.40** 0.50** –
12. Compensation stranger
0.09 0.17** 0.22** -0.02 0.24** 0.45** -0.00 0.27** 0.47** 0.21** 0.65** –
M 4.34 2.10 1.51 3.50 2.98 2.31 3.93 3.35 2.53 3.87 3.16 2.46
SD 0.63 0.96 0.66 1.06 1.03 0.96 0.93 1.01 1.01 0.94 1.04 1.10
* p \ 0.05, ** p \ 0.01
M. Ghorbani et al.
functions of perceived psychological distance to the victim.
The closer people feel toward the target, the more likely
they will feel ashamed and guilty about the past harmful
behavior, and therefore offer higher compensation. More-
over, the effect of ethical emotions on decision-making
varies when the victim is an in-group member versus when
the victim is a stranger. When the victim is an in-group
member, guilt is a predictor of compensation while shame
is not. When the victim is a stranger, both shame and guilt
predict compensation equally well.
We tested the impact of individuals’ perceptions of psy-
chological distance on the level of guilt and shame, and on
their tendency to compensate the victim of wrongdoing.
There were three groups representing three different levels
of psychological proximity on a continuum from very close
relationship to the parents to total strangers that we know
absolutely nothing about and have no prior relationship
Regression analyses (Table 2) indicate partial support
for our first hypothesis that guilt is a better predictor for
compensation than shame. Guilt predicted compensation in
all groups, whereas shame only predicted compensation to
strangers. This is consistent with previous predictions that
guilt is more responsible for reparative actions than shame
(Lindsay-Hartz 1984; Orth et al. 2010; Smith et al. 2002;
Tangney 1991). Shame was not predictive of in-group
compensation, which is consistent with the literature on
shame. Tangney (1992) had posited that ashamed indi-
viduals are unlikely to rectify their wrongdoings. When
feeling ashamed, the perpetrator is not thinking of going
and amending the wrongdoing, but thinking of hiding from
Table 2 Regressions across three groups
Group IV Controls
b Model b Adj
In-group 0.14 21.81**
Age 0.04 0.05
Gender -0.04 0.05
Religious -0.12 -0.08
Stranger 0.35 59.78**
Concrete Age 0.04 0.06
Gender -0.14* -0.04
Religious -0.08 -0.06
Stranger 0.26 36.86**
Abstract Age 0.18** 0.14*
Gender -0.05 0.00
Religious -0.09 -0.04
* p \ 0.05, ** p \ 0.01
Table 3 Results of repeated measures ANOVA and paired-sample t test on key variables
Paired-sample t test
Proximity 1186.73** 33.18** 10.34**
Shame 185.41** 8.85** 13.87**
Guilt 293.34** 11.39** 15.65**
Compensation 225.66** 11.66** 12.46**
* p \ 0.05, ** p \ 0.01
Fig. 1 Regression of shame and guilt on compensation among the three groups
Guilt, Shame and Psychological Proximity
others (Lindsay-Hartz 1984). In-groups are comprised of
parents, other close relatives, and close friends, and it is
difficult to avoid them. Therefore feelings of shame, while
they may cause individuals to want to hide from in-groups,
may not in reality be acted upon since it is difficult to do
this in case of in-groups. This might explain why shame
does not predict in-group reparative behavior. This is not to
say that individuals do not experience shame when trans-
gressing people close to them. In fact, levels of shame were
higher when victims were members of in-groups, versus
out-group victims. It is possible that individuals expect
people who are close to them to be more forgiving and as
such do not think shame is a reason to compensate them.
Another possible explanation is that individuals see com-
pensation to in-group members as an obligation and noth-
ing to do with their level of shame.
We also found support for our second set of hypotheses.
We posited that psychological proximity can influence the
level of shame, guilt and compensation, in that the closer
individuals feel to their victims, the more likely they would
be to feel guilty and ashamed, and offer higher compen-
sation as a result. Participants reported the highest levels of
guilt, shame, and compensation when the victim was an in-
group member, followed by when the victim was a stranger
with a concrete description, and the lowest levels of guilt,
shame, and compensation resulted when the victim was an
abstractly described stranger.
In the third set of hypotheses, we predicted how psy-
chological proximity interacts with shame and guilt in
individuals’ decisions to compensate victims of transgres-
sion. While the levels of guilt and compensation increased
as perpetrators felt closer to the victims, the interaction of
proximity and guilt in predicting the level of compensation
were not significant. However, we found some support for
the mediating effect of guilt between perceived psycho-
logical proximity and the level of compensation.
This latter finding is perhaps not too surprising because
guilt is the emotion affects individuals through empathy
(Leith and Baumeister 1998; Tangney et al. 2007). Empa-
thetic people are capable of taking the perspective of others
(Mehrabian and Epstein 1972). Empathy is a source of
altruistic behavior as people who help others out of empathy
actually relieve themselves of negative feelings (Batson et al.
1981; Detert et al. 2008). Consistent with this logic, when
perpetrators feel close to victims of their wrongdoings, they
feel pain as the victim does, regret their behavior, and want to
do things to relieve the victims’ pain to relieve the perpetra-
tors’ own painful feelings. Guilt is associated with other-
oriented empathy (Tangney 1991; Tangney et al. 2007).
Mencl and May (2009) also suggested that empathy
increases as proximity decreases. The more individuals
can relate to others and become familiar with them, the
more they can empathize with them (Brass et al. 1998).
Mikulincer et al. (2005) posited that individuals distance
themselves from the suffering of others to reduce empathy
and the possibility of altruistic help. The closer individuals
feel to their victims the more empathetic and guiltier they
feel for transgressing them. Higher levels of guilt also
indicate higher levels of compensation. As such, guilt
could be a good mediator for the effect of proximity on the
level of compensation.
We found partial support for hypothesis 3b, which pro-
poses that proximity moderates the effect of shame on levels
of compensation. Our findings suggest that psychological
proximity moderates the effect of shame as a categorical
variable instead of a continuous variable. We found dissimi-
larities in compensation offered to in-group members versus
strangers. However, despite our findings (H2) that people
perceived different levels of shame, compensated varying
amounts, and felt like they were at different psychological
distances toward the two stranger groups, there was no dif-
ference in the predictive power of shame on compensation
between the two stranger groups. When perpetrators decided
on the level of compensation to offer in-group members,
shame was not a determinant of the amount. On the other
hand, when deciding on the level of compensation to offer
strangers, shame was a significant predictor of compensation.
This finding indicates that ashamed transgressors cate-
gorized their psychological distances to their victims based
on victims’ statuses as either in-group or out-group mem-
bers. This type of dyadic categorization and moderation is
consistent with previous studies about group-level ten-
dencies to compensate out-groups (Berscheid et al. 1968;
Berscheid and Walster 1967; Brown et al. 2008). Shame is
caused by violations of character (Keltner and Buswell
1997) and is related to individuals’ identities. Transgres-
sors try to compensate victims to reduce their feelings of
shame and restore their reputations. Therefore, shame can
transform perpetrators’ image and gives them a lower
evaluation of themselves; an image different and less
worthy of one to self (Lindsay-Hartz 1984).
Perpetrators do not defend their images and reputations
in front of in-group members to the same extent as they do
in front of out-group members, since in-groups are
expected to accept each other even when it is difficult. In
addition, it is hard to imagine a damaged in-group image
resulting from one mistake, when in-group members know
one another so well. Therefore, compensating an in-group
member is not likely to change how the in-group members
perceive the transgressor if the damage was caused by a
one off event. This could explain why shame was not a
significant predictor of in-group compensation. If we look
closer at shame, it is associated with running away and
hiding from others (Tangney 1991; Tangney et al. 2007;
Tangney et al. 1992). Transgressors might still feel
ashamed to face members of their in-groups, as indicated
M. Ghorbani et al.
by the first two sets of supported hypotheses. However,
results do not indicate that shame is the reason for trans-
gressors to compensate the in-group.
In contrast, transgressors try to protect and restore their
own images in front of out-group members. When perpe-
trators feel ashamed and condemn themselves, they still
want to keep a positive image in front of other people who
do not know them well. After all, strangers often judge
each other based on one action or behavior. So it is
important for perpetrators to make the wrong right in the
eyes of strangers, in order to restore a good image. In
addition, a single act such as compensation can make a
large difference in their image with strangers, but will
probably not make as much of a difference with the in-
group. By offering compensation, transgressors send out
the message that they take responsibility for their behavior.
This positive image can help restore reputations that were
damaged during transgressions. Therefore, when trans-
gressors feel distant to their victims and think their images
are vulnerable, they need to take actions to protect or
improve their image from victims’ point of view.
Implications and Directions for Future Studies
Our findings indicate that while guilt increases as prox-
imity decreases, guilt can predict transgressors’ tendencies
to compensate victims. This is an important finding as it
indicates that increasing the level of guilt in managers and
entrepreneurs could improve their ethical behavior. We
suggested that guilt works through empathy and empathy is
also linked with psychological proximity. We also posited
that empathy increases as concrete knowledge of victim
increases. While our suggestions needs further testing,
these findings indicate that when people provide more
information to firms, they seem more concrete to managers.
As the level of abstraction decreases, managers are likely
to feel more empathetic. Higher levels of empathy and
more concrete information about clients could insure better
treatment by managers.
This better treatment could occur in two ways. The first is
that managers who feel more empathetic toward clients may
avoid decisions that cause transgressions. For example, man-
agers might develop preemptive guilt through interactions with
the board of directors when the board emphasizes the reality of
the people who can be hurt by these decisions. The second way
that clients could be protected against wrongdoing is through
compensation. Managers who feel closer to their clients are
more likely to compensate them in the event of any trans-
gression. Therefore, the frequency of compensation might
increase when clients and customers have the opportunity to
meet face-to-face and get to know one another better. Both of
these mechanisms provide opportunities for further research.
Another area that would benefit from further study is the
implication for online businesses where almost all cus-
tomers are known only at an abstract level. Abstract rela-
tionships in an online environment are less prone to being
influenced by feelings of guilt. Based on our findings, we
expect that the possibility and level of compensation would
diminish in e-commerce situations compared to brick-and-
mortar businesses. However, shame is more likely than
guilt to determine compensation in this case. Bringing
issues of wrong doing to the public could increase victims’
chances of being compensated. Perhaps this explains why
blogs and online customer opinions are increasingly
important. From the point of view of online customers, it is
important that they make their voices heard in an organized
and systematic manner regarding corporate wrongdoing,
since this would create more shame for the concerned
organization and increase the chances of victims of cor-
porate fraud being compensated.
One final area for future research is to combine this line
of research with antecedents of guilt and shame. Person-
ality traits, values, culture, guilt-proneness, and shame-
proneness have all been shown to have some relationship
with feelings of guilt or shame. Culture, values, and per-
sonality possibly influence levels of guilt and shame and
could change individuals’ perceptions of psychological
proximity (e.g., some cultures value family more than
others, while in some other cultures societal or out-group
collectivism could be higher). These antecedents could
help explain how the level of guilt and shame can be
increased or decreased. For example, how does guilt-
proneness lead to the level of guilt when levels of concrete
knowledge and psychological proximity are controlled? Do
psychological proximity and guilt-proneness interact in the
same ways as guilt and proximity?
Our purpose was to provide an explanation as to how and
why people attempt to compensate others for their uneth-
ical decisions. In this study, we investigated the effect of
guilt, shame, their interaction with the perceived psycho-
logical proximity to the victim in affecting the transgres-
sor’s reparative behavior. We found that guilt increases as
proximity decreases, and that guilt can predict transgres-
sors’ tendencies to compensate victims. Shame interacts
with psychological proximity to predict compensation,
whereas guilt mediates the relationship between psycho-
logical proximity and compensation. Through this study,
we increased our knowledge about the effects of guilt,
shame, and psychological proximity on decisions leading
to reparative behavior. We hope that this research can help
with improving the frequency of moral reparative actions,
Guilt, Shame and Psychological Proximity
including righting previously committed wrongs. While we
do recognize that there are always anomalies and excep-
tions (for example, Madoff personally knew many of his
victims), we believe that this study has helped us gain a
better understanding of how organizations and decision
makers in organizations can better compensate their vic-
tims and right their previously committed wrongs.
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Guilt, Shame and Psychological Proximity
- Guilt, Shame, and Reparative Behavior: The Effect of Psychological Proximity
- Literature Review
- Shame and Guilt
- Psychological Proximity
- Interaction of Shame and Guilt with Proximity
- Shame and Guilt
- Internal Locus of Control
- Manipulation Check
- ANOVAs and t Tests
- Moderation Analyses
- Implications and Directions for Future Studies