Rationalize or reappraise? How envy and cognitive reappraisal shape unethical contagion

Abstract Reducing unethical employee behavior is a complex challenge for organizations given that such behavior is often highly contagious. Yet, although many employees imitate the unethical behavior of their coworkers, some adhere to ethical standards in spite of their coworkers’ unethical behavior. Drawing on social cognitive theory, we propose an expanded model of unethical social influence that sheds light on the processes and boundary conditions associated with unethical contagion within organizations. Specifically, we argue that observing others engage in unethical behavior evokes feelings of envy that, in turn, facilitate moral disengagement and unethicality. We then integrate research on cognitive reappraisal with the moral disengagement literature to propose that cognitive reappraisal attenuates the experience of envy in those who observe unethical behavior. Across two field studies and an experimental study, we build a model in which envy mediates the relationship between observed unethical behavior and moral disengagement with downstream consequences in the form of unethical behavior. Additionally, both cognitive reappraisal orientation (Studies 1 & 2) and cognitive reappraisal training (Study 3) attenuate this mediated effect. Given the substantial costs of unethical contagion within organizations, these findings have implications for both scholars and managers.