When making judgments, determining a response, or simply trying to understand another person's action, perspective taking acts as a social tool that can help determine the cause of someone's behavior or decide how one would feel or act if "put into the other person's shoes" (Batson, 1994; Mead, 1934). Most management research assumes that the act of perspective taking results in a concerted effort to understand the target, and therefore has positive benefits for both the target and the observer. For this reason, perspective taking is often encouraged, especially in decision-making scenarios, negotiations, conflict management or for managers who must distinguish between multiple perspectives before passing judgment. However, with this dissertation I present a more balanced view of perspective taking, using social identity theory to detail a process-oriented model that presents both the possible positive and negative consequences of perspective taking for managers, and identify boundary conditions that may make either outcome more or less likely. More specifically, I argue that an individual's own perspective and past experiences exert influence on how he or she interprets and passes judgment on other people's experiences.