At work, people don’t always choose what’s best for the company—they often choose what feels safest for themselves, a behavior known as defensive decision making or “cover your ass.” This matters because it wastes opportunities, blocks new ideas, and can even cause scandals, such as when Wells Fargo workers created fake accounts because they were scared of losing their jobs if they didn’t meet sales goals. Defensive decisions happen when things feel uncertain—you can’t know for sure what will happen, and mistakes might be punished.

The researchers looked at two things that can reduce this behavior: psychological safety (feeling it’s okay to take risks without blame) and authentic leadership (leaders who are fair, honest, and consistent). Their study found that both can reduce defensive choices: psychological safety helps people speak up, and authentic leaders especially matter when psychological safety is low. Since defensive decisions may account for up to 20–50% of choices in some organizations, creating the right working environment can save money and improve long-term success.

The abstract of this study mentions that psychological safety or authentic leadership causes a change in the amount of defensive decisions. However, the hypotheses seem to be testing a correlation, meaning that two things move together. This doesn’t exactly mean that one thing causes a change in the other.

Methods

Employees of a large, unnamed German public administration organization belonging to different managerial levels were invited to participate in the study via a formal email.

Participating employees would then be provided a survey consisting of scenarios that questioned their comfort in expressing their opinions freely at work, as well as whether or not they worked under leaders who prioritized traits such as humility and transparency.  Artinger et al. (2025) purposefully designed these scenarios with options that were either aligned with personal interest or the interest of the organization; participants were also instructed to rate on a scale of 1 to 4 how likely they were to make that given decision. Using real-life examples, these scenarios were developed to realistically simulate a specific work environment.

The study's researchers calculated the costs of defensive decision-making through estimates of the average costs made by the participants and their colleagues' decisions.

Hypotheses 1 & 2

In a business setting, risk and uncertainty can affect decision-making. In a risky context, future events are predictable, but in an uncertain context, it’s unpredictable. The behavioral theory of the firm states that if there's uncertainty, people will look for and make a choice that requires minimal effort, but is still satisfactory, rather than the best, based on past performance.

Psychological safety can counteract these just-satisfactory decisions, and without it, employees might just focus on individual benefits, not the organization’s. Thus, Hypothesis 1 states that as psychological safety decreases, defensive decision-making increases.

Leaders are also a huge factor in employees' behavior. Authentic leadership helps to manage concerns about uncertainty.  Hypothesis 2 states that as authentic leadership decreases, defensive decision-making increases.

The results from the study did not support either hypothesis.  When considering only psychological safety or only authentic leadership, those characteristics alone did not make a significant difference in decreasing defensive decision-making.

Hypothesis 3

The leader-employee relationship can amplify or buffer the influences of psychological safety on employees' behavior and vice versa. For example, a leader who gives helpful, honest feedback can amplify the benefits of a trustworthy environment. Hypothesis 3 states that psychological safety and authentic leadership influence each other and together determine defensive decision-making.

When analyzing the combination of psychological safety and authentic leadership, there were significant interactions, supporting Hypothesis 3. From the study, around 18% of people made the most defensive choices when they didn’t feel safe and their boss wasn’t honest. However, when they didn’t feel safe but did have an honest boss, only 12% of people made defensive choices. If people already felt safe, whether the boss was honest or not didn’t further increase or decrease their defensive decisions.

Researchers believe it is possible that people may not be admitting their own defensive choices, as participants reported that 20% of their most important choices in the past year were defensive. But when asked about their co-workers’ decisions, they guessed it was around 34%

Participants also believe that their defensive choices were worth only about 70% in value compared to the best choice for the company. Researchers think that companies lose about 10% of their yearly revenue from defensive decisions.

Conclusion

The results of this study suggest that the combination of psychological safety and leadership authenticity influences defensive decisions being made in a group. In other words, if a person fears speaking up and there is no genuine leader present, then more decisions are made for one’s own best interest rather than the group's best interest. Ultimately, if the degree to which the company’s betterment is influenced by the employees’ comfort in speaking up, then employers need to acknowledge these findings so they can create the right working environment that can save money and improve long-term success.

Link to paper: https://www.sciencedirect.com/science/article/pii/S0148296325000633