Ramifications of leaders' unethical pro‐organizational behavior on employees: Dual‐stage moderation of ethical mindset

Summary Although leaders' unethical pro‐organizational behavior (UPB) have been identified as one of the key drivers of employees' unethical actions in organizations, our understanding of when and why leader UPB unfolds these adverse effects is still at an early stage. By integrating social cognitive theory with the literature on ethical mindset, the present research sheds light on the cognitive processes and boundary conditions that underpin the effects of leader UPB on followers. We argue that leader UPB may undermine followers' moral efficacy, which in turn translates into heightened follower UPB and general unethical behaviors (UBs). More importantly, we propose that ethical mindset moderates the two stages of the processes, such that followers' outcome‐based ethical mindset weakens the effects of leader UPB on follower moral efficacy but strengthens the link between follower moral efficacy and their UPB and UB. The results of two field studies and one experiment provide consistent support for the hypothesized model. Theoretical and practical implications as well as avenues for future research are discussed.