Quote from elindydotcom:
The answer depends on whether you can do something you already know is unethical/morally wrong and still look at yourself in the mirror. Yes, corporations may be all about looking out for themselves but that doesn't mean that there arent' some out there that will act ethically even when their backs are against the wall. You have to decide what kind of person YOU are and what kind of company you would want to be associated with.
My suggestion is ALWAYS take the high road when you can. Make it a point of establishing your career and track record as someone that people will trust and you'll probably end up standing out from the crowd.
In this case, you don't have to decline the offer outright in order to interview with the larger company. You can do things that risk the offer being rescinded such as asking for more time to make a decision. But doing that does not necessarily mean that the smaller company will immediately rescind the offer - it may still be there after you've interviewed with the larger company. I doubt that they'll immediately go out and make an offer to their second choice - they'll probably save that until they know their first choice (you) is really not longer on the market. At the very least, they still may want to do some more interviews before rescinding your offer completely which still buys you time.
Being upfront is not necessarily a liability...
My two cents...
-eLindy.