Unethical behavior in organizations has attracted increasing attention among researchers, yet we know little about when and why unethical behavior conducted by leader that is intended to benefit organization (UPB) would translate into employee unethical behavior. Drawing upon moral disengagement and social learning theoretical perspectives, we proposed that leader UPB reflects leader moral disengagement practices which are modeled by employees, especially among those with high power distance orientations; employee moral disengagement, in turn, frees employee to engage in unethical behavior. We found support for our theoretical model across two studies. With an experimental design in Study 1, we found that leader UPB led employee to be more morally disengaged than leader unethical pro-self behavior, and employee moral disengagement mediated the positive effect of leader UPB on employee unethical behavior. With a two-wave field survey study conducted among a sample of real estate agents, Study 2 revealed that leader UPB was positively related to employee moral disengagement, and this positive relationship was stronger among high power distance orientation employees. Importantly, Study 2 revealed that employee moral disengagement mediated the interactive effect of leader UPB and employee power distance orientation on employee unethical behavior. We discussed theoretical and practical implications of our findings.
Academy of Management Proceedings, 2016 (Meeting Abstract Supplement) 13478