We use a lab experiment to examine whether and how leaders influence workers’ (un)ethical behavior through financial reporting choices. We randomly assign the role of leaders or workers to subjects, who can choose to report an outcome via automatic or self-reporting. Self-reporting allows for profitable and undetectable earnings manipulation. We vary the leaders’ ability to choose the reporting method and to punish workers. We show that workers are more likely to choose automatic reporting when their leader voluntarily does so and (...) can assign punishment. Even workers who choose self-reporting tend to cheat less when their leader chooses automatic reporting. Nonetheless, most leaders do not opt for automatic reporting in the first place: they often choose self-reporting and punish workers who rather choose automatic reporting. Collectively, our results reveal a dual effect of leadership on ethical behaviors in organizations: workers behave more ethically if their leader makes ethical choices, but often leaders do not make ethical choices in the first place. Hence, leading by example can backfire. (shrink)

Recent data breaches underscore the importance of organizational cybersecurity. However, the high costs of such security can force chief financial officers (CFOs) to make difficult financial and ethical trade-offs that have both business and societal implications. We employ a 2 × 2 randomized experiment that varies both an observed scenario CFO’s investment decision (invest/not invest in security) and organizational outcomes (positive/negative) to investigate these trade-offs. Participant managers assess the observed CFO’s investment behavior and indicate their own intentions to invest. Results (...) indicate that when the observed scenario CFO invests in security, managers primarily follow their peers when making investment decisions. However, when the observed CFO does not invest in security, managers make their own decisions by engaging in more in-depth reasoning that includes assessment of the seriousness of consequences, as well as the ethical and societal considerations. Moderated mediation findings further deconstruct and corroborate these relationships. (shrink)

Since the conceptualization of unethical pro-organizational behavior ten years ago, scholarly interest in exploring this phenomenon has multiplied. Given a burgeoning body of empirical research, a review of unethical pro-organizational behavior literature is warranted. This study, therefore, systematically reviews the extant literature on unethical pro-organizational behavior and presents a comprehensive theory-based review of the past developments in this field. We classify previous studies based on their underlying theoretical perspectives and discuss the antecedents and consequences of unethical pro-organizational behavior in work (...) context. We also explicate the boundary conditions under which the influence of these antecedents gets accentuated or alleviated. Overall, this study synthesizes past knowledge to elucidate why, how, and when unethical pro-organizational behavior unfolds in the workplace. Finally, the gaps in the extant theorization are identified and an agenda for future research is proposed. (shrink)

In recent years, the adverse implications of organizational identification (OID) have received significant attention in the field of organizational behavior research, particularly as it is considered a critical factor in unethical pro-organizational behavior (UPB). Nevertheless, the findings of previous studies are inconsistent. To explain these discrepancies, we performed a meta-analysis of 54 independent studies from January 2010 to April 2023, comprising a total of 14,836 samples, to investigate the impact of OID on UPB and the moderating effects of cultural context. (...) The results of our study demonstrated that individualism, power distance, masculinity, uncertainty avoidance, and indulgence play moderating roles in the OID – UPB relationship. This study makes noteworthy theoretical and practical contributions and lays the foundation for future research. (shrink)