This paper explores the role of perceived ethicality in entrepreneurial action. We extend the entrepreneurial action framework and propose that well-intended entrepreneurs evaluate a potential opportunity on three dimensions: feasibility (“Can I?”), desirability (“Do I want to?”), and ethicality (“Should I?”). To theorize how ethicality assessment shapes the entrepreneur’s belief-forming processes, we advance a novel concept integrating insights from moral philosophy: ethical ambiguity. Assuming that many entrepreneurs want to do “the right thing” yet face ambiguity concerning “what is the right thing to do,” we develop a proposition-based model for how ethical ambiguity shapes entrepreneurial action. We posit ethical judgment as a function of attention, cognition, neutralization, and framing and propose individual factors that determine the ability to process ethical ambiguity and how different characteristics of an identified opportunity dominate the entrepreneur’s cognitive processing. Our analysis opens a new research agenda connecting entrepreneurship and ethics literature.
