This study adopts moral reasoning strategies to investigate why consumers support companies involved in ethical transgressions. Drawing on several cases of real multinationals publicly involved in tax avoidance practices, it aims to demonstrate that moral rationalization and moral decoupling depend not only on how consumers perceive the magnitude of the transgression, but also on their individual differences, such as political ideology and brand identification. A quantitative study with a sample of 3989 consumers of five different focal brands was employed to (...) test a set of hypotheses. Findings reveal that moral decoupling directly explains purchase intentions. However, rationalization only explains behavioral intentions if it leads to a reduction in the perceived immorality of the action. Furthermore, the study reveals significant differences across personal values. Left-leaning individuals tend to rationalize less and decouple more when they perceive that the magnitude of the transgression as egregious. Interestingly, consumers who are highly identified with the brand are less affected by the transgression and tend to be more supportive toward the brand by engaging in rationalization mechanisms. (shrink)

ABSTRACT Leaders have been thought to play a vital role in influencing employees’ unethical behavior. However, what happens to leaders and followers in the aftermath of unethical conduct has received little attention in the literature. Drawing from the correspondent inference theory, we examine the conditions under which leaders attribute their followers’ unethical behavior to poor moral character and eventually assign them low performance ratings. Through a two-wave research design and data from 290 matched employee–leader dyads, we found that a leader (...) is more likely to infer that a follower who has engaged in unethical behavior is of poor moral character when the leader has a higher moral identity, and the leader will impose lower performance ratings on this follower when the leader prefers lower moral decoupling. (shrink)

Do liberals’ and conservatives’ brain processes differ in moral reasoning? This research explains these groups’ dissimilar moral stances when they face ethical transgressions in business. Research that explores the effects of ideological asymmetry on moral reasoning processes through moral foundations has been limited. We hypothesize two different moral reasoning processes and test them in the South Korean culture. Study 1 uses the neuroscientific method of event-related potentials to explore the dissociable neural mechanisms that underlie Korean liberals’ and conservatives’ moral reasoning (...) processes in business ethical transgressions. Liberals’ early frontal negative-going brain waves showed that they are quick to pass negative judgment by intuitively detecting violations of fairness, while conservatives’ temporoparietal positive-going brain waves showed that they have a higher motivation to respect authority. Both liberals’ and conservatives’ ERP components occur within the first second of the decision-making phase, suggesting the rapid and intuitive nature of moral reasoning processes. Study 2 tests a mediating process and confirms that Korean liberals exhibit the moral engagement strategy, through the fairness foundation. These findings from our interdisciplinary research deepen the knowledge of the complexity of human morality in business ethics research. (shrink)

Although performance pressure has desirable consequences, there is evidence that it can produce unintended outcomes as employees tend to engage in dysfunctional and unethical behaviors to meet performance goals. Thus, the process through which employees think and behave unethically under performance pressure deserves more research attention. This study goes beyond the stress-appraisal perspective and investigates whether and when performance pressure influences individual work mindsets and behaviors from a moral reasoning perspective. Specifically, we contend that performance pressure is related to employee (...) expediency through moral decoupling. We further hypothesize dialectical thinking and moral identity to be the boundary conditions of the proposed relationships. Analyses of data from a field study in three waves provide support for most of the hypotheses. In particular, we find that moral decoupling accounts for additional variance after we control for the stress-appraisal effect of performance pressure on employee expediency. The study offers several contributions to the literature on performance pressure and unethical behavior. (shrink)

To promote ethical and pro-environmental behavior, hypocrisy sometimes is made salient to individuals: i.e., they are made aware that their past behavior does not conform to expressed norms. The fact that this strategy may backfire and may even reduce the likelihood of individuals performing the desired action has been largely overlooked. This paper develops a theory of how hypocrisy stimulates two opposing heuristic processes: one that favors the former, positive outcome and one that renders hypocrisy non-effective. We test the model (...) and reveal important boundary conditions using the finding of a comprehensive field experiment. Situational and individual factors determine which of the competing mechanisms is activated. The paper contributes a novel understanding to managers and scholars of how hypocrisy operates and illuminates the contingencies of when this strategy is beneficial. (shrink)