Executives today face many difficult, potentially explosive situations in which they must make decisions that can help or harm their firms, themselves, and others. How can they improve the ethical quality of their decisions? How can they ensure that their decisions will not backfire? The authors discuss three types of theories — theories about the world, theories about other people, and theories about ourselves — that will help executives understand how they make the judgments on which they base their decisions. By understanding those theories, they can learn how to make better, more ethical decisions.