Generating the Moral Agency to Report Peers’ Counterproductive Work Behavior in Normal and Extreme Contexts: The Generative Roles of Ethical Leadership, Moral Potency, and Psychological Safety

Abstract Reporting peers’ counterproductive work behaviors (CWBs) is important for maintaining an ethical organization, but is a significant and potentially risky action. In Bandura’s Theory of Moral Thought and Action (Bandura, 1991) he states that such acts require significant moral agency, which is generated when an individual possesses adequate moral self-regulatory capacities to address the issue and is in a context that activates and reinforces those capacities. Guided by this theory, we assess moral potency (i.e., moral courage, moral efficacy, and moral ownership) as key capacities predicting peer reporting intentions and assess three contextual factors influencing the generation and effects of moral potency: whether a potential informant (1) works for an ethical leader, (2) is embedded in a psychologically safe climate promoting interpersonal risk-taking, and (3) operates in a more normal or extreme context. We assess the proposed model across three field studies entailing both normal and extreme (i.e., firefighting units) contexts. Results show that ethical leaders raise employees’ moral potency, promoting greater willingness to report their peers’ CWBs. In normal work contexts, psychological safety positively moderated both the relationship between ethical leadership and moral potency and between moral potency and peer reporting intentions. However, psychological safety had the opposite effects in more extreme work contexts. Whereas psychological safety strengthens the positive association between moral potency and peer reporting intentions in normal work contexts, in contexts where individuals are more frequently exposed to extreme events, psychological safety weakens this relationship, thus highlighting the unforeseen downsides of psychological safety in extreme contexts.