http://repub.eur.nl/res/col/292/ List of Publications en http://repub.eur.nl/static-eur/img/logo.png http://repub.eur.nl http://repub.eur.nl/res/pub/40081/ 2013-06-20T00:00:00Z Recent studies suggest that entrepreneurship is partly heritable, but are unable to pinpoint the specific genes involved. This thesis presents results from novel research aiming to identify genes associated with entrepreneurship using genetic data on the molecular level. In addition, the relationship between testosterone and entrepreneurship is examined since genes may exert their influence through this hormone. The thesis starts by reviewing candidate gene studies that test a pre-specified set of genes for association, but which often fail to replicate. An example within the setting of entrepreneurship research is provided to illustrate this last point. Next, the genome-wide association study (GWAS) design is presented that scans the entire genome for associations. However, due to multiple testing, GWAS requires very large sample sizes to establish robust associations and we perform a simulation study to estimate the minimum sample size needed for a GWAS on entrepreneurship. The following part reports evidence that entrepreneurship is partly heritable and around half of the heritability is accounted for by actual molecular genetic data. However, a GWAS on entrepreneurship does not identify robustly associated genes and prediction exercises show that it is currently impossible to predict entrepreneurship solely from molecular genetic data. In the final part, we show that, in contrast to earlier findings, testosterone is not associated with entrepreneurship. Taken as a whole, the results suggest that entrepreneurship is likely to be influenced by hundreds if not thousands of genes with a very small effect size each, implying that very large sample sizes will be needed in future research to discover associated genes. Most importantly, this thesis may serve as a practical guide for studying the molecular genetics of other economic variables. In conclusion, this thesis helps to build the foundations for a novel research field that integrates molecular genetics into economics. Loos, M.J.H.M. van der http://repub.eur.nl/res/pub/40079/ 2013-06-13T00:00:00Z Vision communication has been heralded as the most defining aspect of outstanding leadership, yet what makes for effective vision communication has eluded leadership scholars so far. Indeed, while vision communication is the only leader behavior that is specified in all influential leadership theories, it remains unclear which elements of leader vision and how these elements are conducive to the mobilization of followers toward action. Accordingly, the goal of the current dissertation was to clarify part of the mystery surrounding these issues. In this dissertation I highlight two ways by which vision communication can provide followers with a viable basis for action and motivation. The first way involves the use of emotional displays by leaders during vision communication. Specifically, I show that leader emotional displays provide useful for leaders by impacting the motivational lens through which followers interpret and respond to the leader’s vision. The second way involves the assurance of collective continuity. Specifically, I show that leaders can effectively motivate followers to help realizing intended change by communicating a vision which assures them that – despite objective change – the most defining features of the collective will remain unchanged. This dissertation concludes by reflecting on these results from the view that regards leadership as the management of meaning. Venus, M. http://repub.eur.nl/res/pub/40076/ 2013-06-07T00:00:00Z The aim of this dissertation is to uncover the relationship between leader affective displays and leadership effectiveness. Five empirical studies were conducted to test the influence of several leader affective displays on different follower outcomes that indicate leadership effectiveness. The results showed that leader happy displays enhance followers’ creative performance, whereas leader sad displays enhance followers’ analytical performance. In addition, a leader displaying happiness is rated as more effective than a leader displaying sadness, independent of followers’ performance. Moreover, increased follower happiness mediated the effects of leader happy displays on followers’ creative performance and followers’ ratings of their leader’s effectiveness indicating that emotional contagion processes play a role. Another line of research demonstrated that a leader displaying sadness yields more long-term focused decisions than a leader with a happy, angry or an affective neutral display. This effect is mediated by follower sadness, thus driven by emotional contagion. Furthermore, leader sad displays increase followers’ long-term decisions particularly for followers who have a chronic tendency to experience negative affect. The final study revealed that sad leader displays combined with pro-self leader instructions enhanced followers’ unethical behaviors. When leaders display happiness, anger, or no affect (neutral), followers’ unethical behaviors are not influenced differently by the pro-self or the pro-social leader instructions. All studies together provide a solid base for the main ways in which leader affect influences leadership effectiveness. Leader happy, sad and angry displays differently influence followers’ performance, decisions, unethical behaviors and ratings of their leader’s effectiveness. Consequently, leaders who display the kind of affect that is most optimal within a certain context will be the most effective leaders. V.A. Visser http://repub.eur.nl/res/pub/40068/ 2013-05-31T00:00:00Z This study examines the portfolio choice anomalies and trading strategies of two types of institutional investors, Dutch pension funds (PFs) and US mutual funds (MFs), and presents some explanation for the unexpected behaviour in their trading. Particularly we focus on the determinants of home bias, feedback trading and herding in the investment behaviour of these institutional investors. We find that Dutch PFs’ domestic share in portfolio allocation (‘home bias’) diminishes over time, and that fund characteristics, such as economies of scale, experience, funding status and pension plan (DB or DC), significantly affect their asset allocation across multiple asset classes and markets. We disprove the theory that all PFs are passive traders by finding that Dutch PFs display a monthly turnover rate of approximately 8.5%. We find strong evidence for contrarian trading by Dutch PFs on an aggregate basis; however, it varies considerably across asset classes. Furthermore, we find that lagged institutional demand for a security drives momentum investment in riskier assets and contrarian investment in less risky assets. A security’s contemporaneous and lagged performance drives contrarian investments across asset classes. Using quarterly holdings of US equity MFs we investigate the herding dynamics in their long-term trading behaviour and find that funds styles, market volatility, the increased participation of MFs in the financial markets and MFs size/capitalization are important determinants of herding dynamics in their trading behaviour. The results endorse one of our hypotheses that “in the long term, US equity mutual funds limit themselves to certain stock characteristics”. G. Rubbaniy http://repub.eur.nl/res/pub/39933/ 2013-05-30T00:00:00Z High-tech capital goods enable the production of many services and articles that have become a part of our daily lives. Examples include the refineries that produce the gasoline we put in our cars, the photolithography systems that enable the production of the chips in our cell phones and laptops, the trains and railway infrastructure that facilitate public transport and the aircraft that permit us to travel long distances. To prevent costly production disruptions of such systems when failures occur, it is crucial that service parts are readily available to replace any failed parts. However, service parts represent significant investments and failures are unpredictable, so it is unclear which parts should be stocked and in what quantity. In this thesis, analytical models and solution methods are developed to aid companies in making this decision. Amongst other things, we analyze systems in which multiple parts need replacement after a failure, a situation that is frequently encountered in practice. This affects the ability to complete repairs in a timely fashion. We develop new modeling techniques in order to successfully apply scalable deterministic approaches, such as column generation techniques and sample average approximation methods, to this stochastic problem. This leads to solution techniques that, unlike traditional methods, can ensure that all parts needed to complete maintenance are readily available. The approach is capable of meeting the challenging requirements of a real-life repair shop. Jaarsveld, W.L. van http://repub.eur.nl/res/pub/39931/ 2013-05-24T00:00:00Z This thesis explores how social context influences the neurobiological processes underlying decision-making. To this end, this research takes an interdisciplinary approach, combining methods and insights from Psychology, Marketing, Economics, and Neuroscience. In particular, behavioural responses are collected, and used in combination with both functional magnetic resonance imaging (fMRI) techniques and pharmacological interventions examining the role of the hormone oxytocin in decision-making. The first part of this thesis is concerned with the effects of social influence on decision-making, or in other words, how human decisions are influenced by the behaviour and beliefs of other people. Specifically, this part examines the influence of both celebrity endorsements and peer groups on the neural processes underlying decision-making. The second part of this thesis investigates the influence of social norms on decision-making. This section examines the neural processes involved in cooperation and the role of oxytocin in social norm enforcement. Stallen, M. http://repub.eur.nl/res/pub/39655/ 2013-04-12T00:00:00Z This thesis studies the role of credit rating agencies (CRAs) in capital markets, and the effects of two important regulatory decisions that are taken to improve the quality of information available to the capital markets. In particular, this thesis examines a) the importance of credit ratings to the debt markets and the level of trust investors place on CRAs b) whether the adoption of International Financial Reporting Standards (IFRS) improves the quality of accounting information in European Union, and c) whether implementation of Market Abuse Directive (MAD) has been successful in deterring the market manipulation activities, improving the quality and flow of information to the capital markets, and reducing selective disclosure of private information. Chapter 2 of this thesis shows that the extent of investors’ reliance on the credit ratings depends on whether or not these ratings correspond to the ratings that are expected based on publically available information. Chapter 3 demonstrates that the reporting under IFRS is associated with higher credit ratings and a lower probability and level of rating disagreements between CRAs. The results in Chapter 4 reveal a decrease in the level of market manipulation activities and the provision of selective disclosures subsequent to the implementation of MAD. Chapter 4 also provides evidence of more timely and accurate information flowing to the security markets after implementation of MAD. Overall the findings in this thesis show that the participants in the capital markets prefer credit ratings that have strong association with the publically available information and that financial regulations introduced during the last decade enhanced the quantity and quality of information available to the capital markets. Shahzad, K. http://repub.eur.nl/res/pub/39654/ 2013-04-11T00:00:00Z Public health is continually threatened by re- and newly emerging infections, as well as pathogen resistance to available intervention strategies, including vaccines. This persistent threat of the unmet medical need challenges vaccine developers to anticipate future epidemiological outbreaks. Nevertheless, there are insufficient resources available to address all unmet medical needs: developing the average vaccine candidate from the symbolic ‘bench to bedside’ takes approximately 10 years requiring an investment exceeding €400 million. Furthermore, vaccine development is affected by the so-called innovation paradox. In short; regardless of increasing research and development activities, the predicted output - as measured by successful market entry of the commercialized product - is lacking behind. This situation has intensified over the past few decades and significantly impacts the productivity gap in vaccine valorization. In the view that there is a correlation between health and wealth; it is critical to select the appropriate target disease area for vaccine development. This dissertation evaluates the innovation paradox in selecting human infectious disease targets for vaccine development. When it comes to selecting the target, there is a distinction between the level at which the infectious disease is manifested (societal-level), and the level at which valorisation takes place (entrepreneurial- and organizational-level). This action-reaction reciprocity between the micro- and macro-level lies at the heart of the innovation paradox. The six research chapters offer an assessment into entrepreneurial- and organizational-level productivity, focusing on strategies that would potentially stimulate and restrict vaccine target selection. Additionally, we propose the valorization process would be more efficient as an all-inclusive cycle, delineating a number of sequential steps from bench-to-bedside and back again. Such a cycle would allow for proper assessment into the available resources, in order to most accurately determine and address the unmet medical need. Nevertheless, it is up to the biopharmaceutical community to demonstrate their innovative capacity within the context of valorization in order to continue to develop safe and effective vaccines for the benefit of public health. Pronker, E.S. http://repub.eur.nl/res/pub/39253/ 2013-03-21T00:00:00Z Governance structure specifies the allocation of ownership rights, decision rights, and income rights. A cooperative is characterized by user ownership, user control, and user benefits. The focus of this thesis is on various governance structure characteristics and the efficiency of farmer cooperatives. Special attention is dedicated to cooperatives in China. The thesis consists of six chapters. Chapter 1 outlines the structure of the thesis and provides an overview of farmer cooperatives in China, especially in terms of the history, the modes, and organization characteristics. The genesis of farmer cooperatives in China is described in chapter 2. Chapter 3 delineates the governance structure of Chinese farmer cooperatives in terms of the allocation of ownership rights, decision rights, and income rights within the membership. A principal-agent model is developed in chapter 4 to explore the efficiency of cooperatives with different CEO identities, member CEO or outside CEO. Chapter 5 examines how farmers producing differentiated quality products choose different governance structures in a non-cooperative game. Besides, the impact of the cooperatives’ presence in the market on the welfare of various stakeholders is analyzed. We conclude in chapter 6. Liang, Q.X. http://repub.eur.nl/res/pub/39129/ 2013-03-15T00:00:00Z Contemporary organizations operate in an increasingly complex environment and organize themselves more and more horizontally, across organizational boundaries. Yet the leadership literature remains focused on the internal organization, largely neglecting the organizational context. There is a need for a leadership answer that suits the current context; a need for the conceptualization, operationalization and application of strategic leadership. This dissertation develops a multidimensional measure for strategic leadership behavior. Strategic leadership is set apart from supervisory, face-to-face leadership behavior and is conceptualized as dealing with two organizational paradoxes (i.e. External Environment versus Internal Organization and Exploitation versus Exploration), resulting in a model of four dimensions: 1)organizational creativity, 2) business development, 3) client centricity and 4) operational efficiency. The methodology consists of an elaborate and sophisticated statistical analysis, consisting of exploratory, confirmatory and discriminant analyses in order to establish the new 20-item, four-dimensional measure. Moreover the model was tested in terms of effectiveness on subordinate’ job satisfaction and on team performance. The strategic leadership concept is shown to be distinct from the mainstream supervisory leadership concept proven by the empirical statistical data. Moreover, this dissertation provides evidence for the differential manifestation and impact of supervisory and strategic leadership behavior across organizational levels. It equally demonstrates that the strategic leadership model holds promising value when considering the team as a source of leadership, having a positive impact on environment-oriented team effectiveness. The latter finding is especially interesting in the light of the societal trend, where organizations need to tailor their leadership endeavours much more to what happens outside of the organization. Duursema, H. http://repub.eur.nl/res/pub/39130/ 2013-03-15T00:00:00Z Organizations are embedded in a network of relationships and make sense of their business environment through the cognitive frames of their employees and executives who constantly experience battles for power. This dissertation integrates strategic management research with organizational behavior to illuminate managerial cognition, intra-organizational power and interfirm networks. The collection of the studies presented in the present dissertation provides further insights into measurement of cognition, consensus formation process, optimal power differences, and social network theory with assumptions grounded on social cognition, behavioral decision theory, psychology and organizational behavior. These studies offered a new method to measure, visualize and aggregate individual cognition to group and between group level with a strong emphasis on multiple dimensions of cognition, shed light on micro-processes on consensus formation in relation to within-group power differences and psychological safety, a novel model of strategic decision making, and a new behavioral construct that refined existing theories from a behavioral perspective. Each study on its own laid down responses to core research questions of behavioral strategy. Consequently, this dissertation extends strategic management along behavioral lines and equips scholars and practitioners with novel methods and theoretical insights with respect to cognition, power and networks. Tarakci, M. http://repub.eur.nl/res/pub/39128/ 2013-03-14T00:00:00Z An enduring notion in strategy and organization theory literature is that firms succeed and survive as long as a strategic fit exists between strategy, structure, processes, competencies, and resources on the one hand and opportunities and threats arising in the external environment on the other hand. Maintaining strategic fit over time requires that firms undertake appropriate change to reflect changing environmental conditions and shape the environment to their advantage. This dissertation focuses on the crucial yet under-researched temporal dimension of the adaptive and proactive actions organizations take to achieve fit in dynamic environments and develops current knowledge on the outcomes and determinants of proactive strategic behavior in the domain of strategic entrepreneurship. Findings from the four studies composing this dissertation indicate that (1) potential absorptive capacity plays an important role in aligning organizational and environmental rates of change over time; (2) a proactive strategic timing orientation can either enable or hamper positive performance outcomes of exploratory and exploitative innovations under different levels of environmental dynamism; (3) work design characteristics are important levers for proactive strategic behavior of firms in dynamic environments and are thus a potential driver of an organization’s ability to influence and manipulate its environment; (4) strategic timing, together with knowledge intensity and prior experience, should be considered a crucial factor in offshoring decisions aimed at cost reductions. Jointly, these results underscore the need to systematically address temporalities in strategic management and entrepreneurship research from a dynamic contingency perspective. In particular, this dissertation calls for further research on the outcomes and determinants of proactive strategic behavior at the firm level, as well as within the organization. Indeed, proactive behaviors are a driving force in entrepreneurship and economic value creation and as such are crucial to the development and advancement of society. Ben-Menahem, M.G.M. http://repub.eur.nl/res/pub/39127/ 2013-03-08T00:00:00Z This dissertation consists of three studies in the field of corporate governance. The research examines the impact of the way Dutch firms are managed and controlled on risk characteristics and the implications for shareholder value. The first study examines the relation between board interlocks and firm risk. In particular, we measure the effect of supervisory directors’ connectivity on firm risk. We find yet unknown aspects of connectivity and based on our findings the validity of the motivation behind recent Dutch civil law amendments can be questioned. In the second study we examine how firms adapted their communication with investors to the changing demands of the financial markets in the 1990s. Using Royal Philips NV as a case study we find that Philips’ communication was not able to satisfy the demands of the changing financial markets. As a consequence, its shareholders have suffered billion euro value losses. In the third study, we measure the effect of managers’ discretion offered by takeover defenses on shareholder wealth. Dutch firms are known for the frequent use of takeover defenses, protecting managers and providing them a relatively strong position towards shareholders. We find that acquisitions conducted by Dutch firms generate significant positive abnormal announcement returns, which suggests that shareholders have other means to control management. Wolfswinkel, M. http://repub.eur.nl/res/pub/38766/ 2013-02-22T00:00:00Z Warehouses are important nodes in supply chains. They decouple supply from demand in time, assortment, quantity, and space. By doing so, economies of scale can be achieved in transport, as warehouses allow to regroup transport flows leading to lower cost. They also allow postponement of value addition, increasing service levels at lower inventory levels. Warehouses are particularly needed in densely populated areas, close to where demand is generated and where the labor is available. Warehouses require much space to realize economies of scale. Warehouse buildings are often quite large, more than 10,000 m2 built space is common, and much infrastructure outside the building is needed. Unfortunately, in many of the urbanized areas, space for such large facilities has become short. In order to address this issue, enterprises are moving toward next generation storage systems, namely “three-dimensional (3D) compact storage systems”. These systems are designed in order to save floor space and labor costs, and increase the reliability of the order picking process. Several types of 3D compact storage systems exist with different handling systems (like S/R machines, conveyors, shuttles, or elevators) taking care of the horizontal, vertical and depth movements. This dissertation focuses on new types of 3D compact storage systems, in particular live-cube storage systems, where each unit load rests on a shuttle which can move in horizontal and depth directions, in cooperation with shuttles of other unit loads. In such a system, at least one empty storage slot per level is required. One of the key performance measures for compact storage systems, which is also the focus of this dissertation, is response time. We analyze these systems at two decision-making levels. At the tactical (design) decision level, we focus on the rack-dimensioning problem aiming at short response times. At the operational decision level, we investigate storage assignment and retrieval sequencing problems to shorten the response time. Zaerpour, N. http://repub.eur.nl/res/pub/38675/ 2013-02-08T00:00:00Z Corporate reputation is important for firms’ long-term performance and competitive advantages. This dissertation sets out to understand the relationship between corporate reputation and a company’s attractiveness to financial stakeholders from different angles. Specifically, I examine the role of corporate reputation in the context of the agency problem to explain the causal chain through which the uncertainties and risks are mitigated for investors. This dissertation contributes to the multifaceted conceptualization of reputation (1) by examining different economic values of overall corporate reputation and its pre-condition—visibility, (2) by considering reputation among different stakeholders—public stakeholders and financial stakeholders, and (3) by distinguishing two dimensions of financial reputation—trustworthiness and attractiveness. Acknowledging this multifaceted conceptualization of corporate reputation is crucial for firms to develop an effective strategy for reputation management, and further achieving competitive advantages. The overarching finding across the studies is that reputation management contributes to both attracting financial stakeholders and achieving a superior financial performance of the corporation. Particularly, I identified the mediating role of financial reputation in the mechanism through which public reputation affects financial performance. This result also contributes to the understanding of how reputations among different stakeholder groups affect financial performance differently. Wang, Y. http://repub.eur.nl/res/pub/38673/ 2013-02-07T00:00:00Z This PhD thesis contributes to the newly emerged, growing body of scientific work on the use of News Analytics in Finance. Regarded as the next significant development in Automated Trading, News Analytics extends trading algorithms to incorporate information extracted from textual messages, by translating it into actionable, valuable knowledge. The thesis addresses one main theme: the incorporation of news into trading algorithms. This relates to three main tasks: i) the extraction of the information contained in news, ii) the representation of the information contained in news, and iii) the aggregation of this information into actionable knowledge. We validate our approach by designing and implementing three semantic systems: a system for the computational content analysis of European Central Bank statements, a system for incorporating news in stock trading strategies, and a time-aware system for trading based on analyst recommendations. The approach we choose for addressing these tasks is an interdisciplinary one. For the extraction of information from news we rely on approaches borrowed from Computer Science and Linguistics. The representation of the information contained in news is realized by using, and extending, the state-of-the-art in Semantic Web technology. We do this by bringing together insights from Logics, Metaphysics, and Computational Semantics. The aggregation of information is done by using techniques and results from Computational Intelligence and Finance Milea, V. http://repub.eur.nl/res/pub/38449/ 2013-01-24T00:00:00Z This thesis studies the development of knowledge locations: area-based initiatives aimed at agglomerating knowledge-intensive activities in a designated area or city district (e.g. technology parks, creative “factories”). It relates the reinvigorated interest (and qualitative change) in knowledge locations with a number of societal evolutions, and develops a theoretical framework to explain their emergence and development. This framework contributes to better ground the study of knowledge locations within the spatial-economic context and dynamics of its host cities and regions. This study also explores the relation between a knowledge location´s features – Specialization, Urban-spatial integration and Management – and their agglomeration outcomes. It shows that there are multiple pathways to growth and agglomeration: no single factor has to be always present to explain it at a certain moment in time. Moreover, the three factors proved relevant but in different ways, and namely to the extent that they contribute to image formation (associated with the identification of a concept) and ecosystem formation (associated with exchange and learning among tenants). Those processes provide two different paths to agglomeration. Their interaction influences the development of a knowledge location over time and, ultimately, the relation between the location and change in its spatial-economic context. The abovementioned phenomena are explored with the support of four European case studies of “themed” knowledge locations, focusing on audiovisual, biotechnology, design and digital media, respectively. Carvalho, L.M. de http://repub.eur.nl/res/pub/38240/ 2013-01-11T00:00:00Z This dissertation consists of three studies on the use of intraday asset price data for accurate measurement and forecasting of financial market volatility. Chapter 2 proposes a refined heuristic bias-correction for the two time scales realized range-based volatility estimator in the presence of bid-ask bounce and non-trading. The merits are illustrated through simulations and an empirical forecasting application. Chapter 3 introduces a novel approach for estimating the covariance between asset returns using intraday high-low price ranges. The realized co-range estimator compares favourably to the realized covariance for plausible levels of microstructure noise and non-synchronous trading. The estimator is successfully implemented in a volatility timing strategy that deals with constructing mean-variance efficient asset allocation portfolios from stock, bond and gold futures. Chapter 4 introduces a mixed-frequency factor model for vast-dimensional covariance estimation. This original approach combines the use of high- and low-frequency data with a linear factor structure. We propose the use of highly liquid ETFs -- that are essentially free of microstructure frictions -- as factors such that factor covariances can be estimated with high precision from ultra-high-frequency data. The factor loadings are estimated from low-frequency data to bypass the potentially severe impacts of noise for individual stocks and to circumvent non-synchronicity issues between returns on stocks and liquid factors. Theoretical, simulation and empirical results illustrate that the mixed-frequency factor model is excellent, both compared to low-frequency factor models and to popular realized covariance estimators based on high-frequency data. Bannouh, K. http://repub.eur.nl/res/pub/38241/ 2013-01-10T00:00:00Z Passenger railway transportation plays a crucial role in the mobility in Europe. Since the privatization of the railway sector in the 90s, passenger satisfaction has become an important performance indicator in this sector. A key aspect for passengers is the reliability of transfers between trains. When a train arrives at the station with a delay, passengers might miss their connection if the next train departs on time. These passengers then prefer the connecting train to wait, but this introduces delays for many other passengers. Delay Management is a field in railway operations that deals with this situation. It determines whether a connecting train should wait for the passengers that arrive with a delayed train or should depart on time. In this thesis, we apply techniques from Operations Research to develop models and solution approaches for Delay Management. The objective in our models is the minimization of passenger delay. First, we extend the classical delay management model with passenger rerouting. This allows us to compute the exact delays for passengers. We develop an exact algorithm and several heuristics to solve this extension. Then, we incorporate the limited capacity of the stations in our models. Stations are the bottlenecks of the railway infrastructure, where delays of one train can easily propagate to other trains. When optimizing the wait-depart decisions, these secondary delays should be considered. We therefore develop an integrated model that includes headway constraints for trains on the same track in the station and an iterative approach that evaluates the timetable microscopically. Dollevoet, T.A.B. http://repub.eur.nl/res/pub/38027/ 2012-12-06T00:00:00Z Recent research has tried to understand moral behavior in the workplace mainly from an intra-personal perspective, blaming ethical failures on the person’s moral character, moral development or moral identity, or on isolated aspects of the situation. In doing so, little attention has been paid to the interplay between the person and the interpersonal context in which this behavior takes place. Thus, an important angle for investigating the question why good people do bad things has yet remained unexplored. In this thesis I present four chapters that illustrate this interpersonal influence in the context of ethical behavior within organizations – I discuss how leaders and followers influence each other’s moral behavior, how the organization’s moral norms influence employees moral decisions especially when they identify strongly with the organization, how follower moral awareness influences the effects of ethical leadership on the employee’s deviant behavior, and how demographic differences between leaders and followers influences the effect moral leadership has on employee performance. Together these chapters aim to increase understanding of the importance of factors in the interpersonal for moral decision making by individuals. Gils, S. van