Prophets vs. Profits: How market competition influences leaders' disciplining behavior

In three studies we examined how market competition influences leaders’ willingness to discipline transgressing employees. We found that fierce market competition changes the lens through which ethical transgressions are viewed to an instrumental one. When they have to discipline transgressing employees, leaders in highly competitive markets are more influenced by the profitability of an ethical transgression for the company than those in less competitive markets. Our findings show that that for leaders, profits precede ethics as market competition increases.

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