Most of us like to think we are ethical.

Enron was a bunch of crooks, Andersen colluded with them and Conrad Black and his lackeys were fraudsters. There is no way we are like that.

Or are we?

If that were right, how do you explain the ethical lapses of people who normally regard themselves as ethical? Think of the people who would never steal but who fiddle their tax returns. Or the auditors who help skew the accounts to make sick companies look healthy? What about the normally ethical people who cheat on their partners? Or the tradesmen who work only with cash?

It's a world of public virtue and private vice. We like to think we are ethical but sometimes reality can tell a different story.

It's a point examined in a new study Why We Aren't as Ethical as We Think We Are: A Temporal Explanation. The authors, Max Bazerman from Harvard Business School, Ann E. Tenbrunsel from University of Notre Dame, Kristina A. Diekmann from University of Utah and Kimberly A. Wade-Benzoni from Duke University argue that people kid themselves if they believe they always behave ethically. They say people are in the grip of what the writers "bounded ethicality" , where one's sense of morality is caught up in systemic ways that are self-serving. As a result, they say, we fail to predict how we would act in a sticky situation and after the event, we misrepresent the event as more positive than what actually happened.

At the root of the problem is the conflict between the "want" and the "should" self. The "want" side is emotional and wants gratification now, the "should" part is more rational.

So we know we need to behave ethically during a deal, but we might stretch the truth to close the deal. We might want to donate some money to charity but instead, we spend it on lunch. We know we have to report the person harassing staff, but we don't do it because we want to keep our job.

It's a provocative paper and it has enormous implications for companies wanting to do the right thing by setting up training programs and implementing codes of ethics. If the findings are right, then all of these initiatives will not solve the problem. What's needed is a moral approach that would address individual ethical dilemmas.