How Leaders Drive Followers' Unethical Behavior

Abstract

Numerous organizational scandals have implicated leaders who have encouraged employees to advance organizational objectives through unethical means. However, leaders’ encouragement of unethical behaviors is under-examined in leadership research. We define leader immorality encouragement (LIE) as an employee’s perception that his or her leader encourages unethical behaviors on behalf of the organization. Across four studies, we found that: (1) LIE promotes employees’ unethical pro-organizational behavior; (2) this relationship is mediated by employees’ moral disengagement and reward expectancy; (3) LIE, via moral disengagement, promotes employees’ self-serving unethical behavior; and (4) the association between LIE and unethical behavior is stronger when the leader and the employee have a high-quality exchange relationship and the employee perceives the leader as having high organizational status. Our set of findings shed light on leaders’ attempts to further organization objectives by encouraging unethical behavior.