SOCIAL BEHAVIOR AND PERSONALITY, 2017, 45(9), 1409–1424

© 2017 Scientific Journal Publishers Limited. All Rights Reserved.

https://doi.org/10.2224/sbp.6708

PSYCHOLOGICAL CONTRACT BREACH, ORGANIZATIONAL

DISIDENTIFICATION, AND EMPLOYEES’ UNETHICAL
BEHAVIOR: ORGANIZATIONAL ETHICAL CLIMATE
AS MODERATOR

NI NING AND LI ZHAOYI

Shanghai Normal University

We explored the effect of psychological contract breach on employees’ unethical behavior

and examined the mediating and moderating roles of organizational disidentification and
organizational ethical climate, respectively, using data from 362 paired questionnaires. The
results of multiple linear regression analysis showed that psychological contract breach was
positively related to employees’ unethical behavior and also that organizational disidenti-
fication completely mediated the relationship between psychological contract breach and
employees’ unethical behavior. In addition, organizational ethical climate moderated the
relationship between psychological contract breach and employees’ unethical behavior by
weakening the mediating role of organizational disidentification. The results demonstrated that
avoidance of organizational disidentification and cultivation of a higher level of organizational
ethical climate were conducive to the reduction of employees’ unethical behavior.

Keywords: psychological contract breach, organizational disidentification, organizational

ethical climate, employees’ unethical behavior.

Employees’ unethical behavior refers to an employee’s behavior that is either

illegal or morally unacceptable to the wider community. The negative effects
of employees’ unethical behavior on organizations are not only serious but
also extensive. This behavior may cause pecuniary loss (e.g., through stealing
or responsibility shirking), reputational damage (e.g., through cheating or
dishonesty), and lack of legitimacy (e.g., through cheating or bribery), and has
thus been extensively researched over the past decade (Nafei, 2015). Further,

Ni Ning, Department of Human Resource Management, Shanghai Normal University; Li Zhaoyi,

Department of Public Administration, Shanghai Normal University.
Correspondence concerning this article should be addressed to Ni Ning, Department of Human
Resource Management, Shanghai Normal University, 100 Guilin Road, Xuhui, Shanghai, People’s
Republic of China. Email: nining_xl @126.com

1409
1410 EMPLOYEES’ UNETHICAL BEHAVIOR AND ETHICAL CLIMATE

unethical behavior can spread beyond the original setting (Gino, Ayal, & Ariely,
2009; Kaptein, 2011).
The approach of previous researchers to the mechanism of unethical behavior
has been from three perspectives: bad apple (Trevino & Youngblood, 1990), bad
barrel (Welsh & Ordóñez, 2014), and interactionist (Brass, Butterfield, & Skaggs,
1998; Treviño, Weaver, & Reynolds, 2006), in which unethical behavior is
attributed to personal traits (such as gender, age, education level, work experience,
moral philosophy, moral values, Machiavellian doctrine, and locus of control), in-
stitutionalization of ethics (environmental factors, such as competitive intensity,
work goal setting, and rewards and punishment), or interaction between personal
and environmental factors. We considered that the interactionist perspective that
integrated the other two perspectives was explanatorily advantageous. However,
although the interaction’s effect on unethical behavior in an organization was
emphasized in this perspective (Treviño, et al, 2006), how the consequence of
specific interactions affected employees’ unethical behavior or when this would
happen, was not explained. Thus, we aimed to refine the interactionist perspective
and develop a theory to explain the mechanism of employees’ unethical behavior.
Within a hierarchical organization, the most important interaction occurs
between employees and their supervisor, and this results in various organizational
performances and individual subjective beliefs (Settoon, Bennett, & Liden,
1996). Of these subjective beliefs that determine employees’ behavior change,
psychological contract is one (Randall, 1989). Psychological contract refers to a
belief in payment in exchange for reciprocal obligations. The belief is that some
form of a promise has been made and that the terms and conditions of the contract
have been accepted by both parties (Robinson & Rousseau, 1994).
Psychological contract breach refers to an employee’s perception that the
organization has failed to meet its obligations to him or her (Robinson, 1996).
Previous researchers have focused on the suppressive effect of psychological
contract breach on employees’ positive behavior, such as conscientiousness,
creative behavior, organizational citizenship behavior, and job satisfaction
(Kiazad, Seibert, & Kraimer, 2014; Rayton & Yalabik, 2014; Restubog, Bordia,
& Tang, 2006; Restubog, Hornsey, Bordia, & Esposo, 2008), but they have
rarely focused on the facilitating effect of psychological contract breach on
employees’ negative behavior, such as counterproductive or deviant behavior.
Recently, empirical researchers have reported that psychological contract breach
can result in employees’ unethical behavior (Hill, Eckerd, Wilson, & Greer,
2009; Restubog, Zagenczyk, Bordia, Bordia, & Chapman, 2015). However,
although Johnson and O’Leary-Kelly (2003) explained that each psychological
contract breach is not equal, to our knowledge, there is no theory that explains
why psychological contract breach sometimes results in employees’ unethical
 EMPLOYEES’ UNETHICAL BEHAVIOR AND ETHICAL CLIMATE 1411
behavior, rather than employees reducing their positive behavior. In this study,
we set out to address this gap.
We therefore aimed to make three main contributions to the literature. First,
we examined a relatively new antecedent of employees’ unethical behavior,
namely, psychological contract breach, which we argued is a personal rather
than an interactive factor. Second, we explored an underlying mechanism for
the relationship between psychological contract breach and employees’ unethical
behavior. We posited that employees’ unethical behavior is dependent on whether
or not organizational disidentification happens simultaneously. Organizational
disidentification refers to the cognitive process of no longer identifying with
one’s organization (Ashforth, Joshi, Anand, & O’Leary-Kelly, 2013). Thus,
we explored the boundary conditions that explain the relationship between
organizational disidentification and employees’ unethical behavior, and the
mediation process that transmits the psychological contract breach effects to
employees’ unethical behavior. We proposed organizational ethical climate as a
moderator in the psychological contract breach–employees’ unethical behavior
relationship, and as a mediating mechanism.
We thus aimed to develop the first model of employees’ unethical behavior
in the workplace as a guide for practitioners in the management of employees’
unethical behavior induced by superior-subordinate interaction, and we hoped
that our model would lead to more interactionist research.

Literature Review and Hypothetical Model

Psychological Contract Breach and Employees’ Unethical Behavior

Employees are likely to perceive psychological contract breach when their
superior fails to deliver on promised pay or reciprocal obligations (Robinson &
Morrison, 2000). Thus, it is reasonable to propose that the role of environmental
factors is, unlike innate personal traits, transmitted through supervisors. In other
words, psychological contract breach is an immediate outcome of administrative
behavior. That employees’ unethical behavior results from psychological
contract breach is consistent with social exchange theory (Emerson, 1976),
namely, reciprocal exchange underpins psychological contracts. When an
imbalance in the reciprocal relationship occurs, employees adjust their behavior
and attitudes toward the organization to restore the balance. In addition to
reducing their positive work behavior, employees may increase their unethical
behavior (Tekleab, Takeuchi, & Taylor, 2005). Thus, we proposed the following
hypothesis:
Hypothesis 1: Psychological contract breach will have a positive effect on
employees’ unethical behavior.
1412 EMPLOYEES’ UNETHICAL BEHAVIOR AND ETHICAL CLIMATE

Mediating Role of Organizational Disidentification

Psychological contract breach by a supervisor does not inevitably result
in employees’ unethical behavior. Many researchers have argued that moral
disengagement is the prerequisite of unethical behavior (e.g., Detert, Treviño,
& Sweitzer, 2008; Moore, Detert, Klebe Treviño, Baker, Mayer, 2012).
Moral disengagement refers to the use of mechanisms conducive to selective
disengagement of moral censure. This is achieved by reconstructing behavior,
obscuring causal agency, misrepresenting injurious consequences, and blaming
victims (Obermann, 2011).
According to the moral disengagement view, the mechanism of blaming
victims used by employees is to rationalize their unethical behavior while
simultaneously blaming the organization for dereliction of duty (Moorthy,
Seetharaman, Jaffar, & Foong, 2015). They may think “You don’t pay me enough,
so why shouldn’t I get that money in my own way?” In contrast, we proposed
that the true prerequisite for employees’ unethical behavior is organizational
disidentification. As employees with strong organizational identification have
no reason to separate themselves from their organization, moral disengagement
does not succeed in these circumstances. Disidentification refers to the process
of no longer identifying oneself through one’s role, occupation, organization,
or nation (Ashforth et al., 2013). Empirical results from previous studies show
that psychological contract breach can damage organizational identification
(Epitropaki, 2013). Because organizational disidentification is a more specific
variable than moral disengagement (Lai, Chan, & Lam, 2013), we chose it as
the mediator between psychological contract breach and employees’ unethical
behavior. This choice is consistent with social identity theory (Tajfel, 2010),
according to which, organizational disidentification changes individuals’ social
identity perception and then affects their moral behavior. When employees
separate themselves from their organization in terms of their identity, they
can ignore moral considerations that benefit their organization. Therefore, we
proposed the following hypothesis:
Hypothesis 2: Organizational disidentification will play a mediating role in the
relationship between psychological contract breach and employees’ unethical
behavior.

Moderating Role of Organizational Ethical Climate

Organizational ethical climate is defined as an organization’s general and
pervasive characteristics, which affect a broad range of decisions (Victor &
Cullen, 1988). Empirical researchers have found that organizational ethical
climate affects employees’ unethical behavior (e.g., Liu & Jing, 2010; Ma & Du,
2014). Wang and Hsieh (2013) used organizational ethical climate to explain
employees’ undesirable silence behavior.
According to Wyld and Jones (1997), organizational ethical climate plays an
important role in the process of ethical decision making. A strong ethical climate
 EMPLOYEES’ UNETHICAL BEHAVIOR AND ETHICAL CLIMATE 1413
brings about a high level of ethical reasoning, which results in a high level of
ethical decision making (Martin & Cullen, 2006) and reduces the probability
of unethical behavior. Organizational ethical climate also provides symbolic
resources and a psychological endorsement for employees to solve ethical
dilemmas (Jaramillo, Mulki, & Solomon, 2006). If a high-level organizational
ethical climate is formed, it inhibits employees’ unethical behavior (Trevino,
1986), because they know that if they conduct unethical behavior, they will
receive harsh criticism and punishment from their colleagues or the organization,
whether or not their level of organizational disidentification is high or low. Thus,
the negative effect of a high-level organizational ethical climate would offset
the positive effect of organizational disidentification on employees’ unethical
behavior.
In contrast, when the organizational ethical climate level is low, employees’
unethical behavior caused by organizational disidentification will increase
significantly. In other words, organizational ethical climate negatively moderates
the organizational disidentification effect on employees’ unethical behavior.
Thus, we proposed the following hypothesis:
Hypothesis 3a: Organizational ethical climate will negatively moderate the
relationship between organizational disidentification and employees’ unethical
behavior.
If Hypothesis 2 and Hypothesis 3a were both supported, a moderated mediation
effect could be inferred, that is, that organizational ethical climate would moderate
the mediating effect of organizational disidentification. Specifically, if the level
of organizational ethical climate is high, the effect of psychological contract
breach on employees’ unethical behavior will be low, because the organizational
disidentification effect would be offset by organizational ethical climate, and vice
versa. Thus, we proposed the following hypothesis:
Hypothesis 3b: Organizational ethical climate will moderate the mediating effect
of organizational disidentification on the relationship between psychological
contract breach and employees’ unethical behavior. That is, the higher the
organizational ethical climate level is, the lower the mediating effect will be.
Therefore, we proposed a conceptual model (see Figure 1).
Organizational ethical climate

Psychological Organizational Employees’

contract breach + disidentification + unethical behavior

Figure 1. Conceptual model of the relationship between psychological contract breach and
employees’ unethical behavior.
1414 EMPLOYEES’ UNETHICAL BEHAVIOR AND ETHICAL CLIMATE

Method

Participants and Procedure

Before we distributed the questionnaires, we marked them for randomly
selected supervisors and their subordinates, to obtain paired data. From October
to November 2014, 500 pairs of questionnaires were sent to 47 high-tech
enterprises in Shanghai, and 383 were returned. After omitting incomplete
or incorrectly completed questionnaires, we had a sample of 362 valid
questionnaires completed by supervisor–subordinate dyads, a response rate of
72.4%. To avoid common method bias, we adopted an evaluation method that
was based on heterogeneous information sources. Direct managers evaluated
unethical behavior, and employees evaluated the other variables.
Of the 97 supervisor participants, 62% were men (n = 60), 91% had a
bachelor’s degree or higher (n = 88), 80% were aged between 35 and 44 years
(n = 78), and 75% had five to 10 years of work experience (n = 73). Of the 265
employee participants, 54% were men (n = 143), 72% had a bachelor’s degree or
higher (n = 191), 80% were aged between 25 and 34 years (n = 212), and 75%
had two to eight years of work experience (n = 199).
All the procedures we performed were in accordance with the ethical standards
of the institutional and/or national research committee and with the 1964 Helsinki
declaration and its later amendments or comparable ethical standards. Informed
consent was obtained from each participant.

Measures
All the scales that we used were from previous studies. Each original item was
reciprocally translated between English and Chinese to guarantee the content
validity of the final Chinese scale. All the items were measured by participants’
responses to the items on a 5-point Likert scale ranging from 1 = strongly
disagree to 5 = strongly agree.
Employees’ unethical behavior. We measured employees’ unethical behavior
using a six-item Unethical Behavior Scale abbreviated from Chen and Tang’s
(2006) scale. Sample items are “Take merchandise and/or cash home” and “Take
no action against shoplifting by customers.” Cronbach’s  for the scale was .88.
Psychological contract breach. We adopted a three-item questionnaire
from Tekleab et al. (2005) to measure psychological contract breach. A sample
item is “The organization has repeatedly failed to meet its obligations to me.”
Cronbach’s  for the questionnaire was .82.
Organizational disidentification. We used a four-item scale revised from the
Psychological Contract Violation Scale (Van Der Vegt & Bunderson, 2005) to
measure organizational disidentification. Each item was a negative statement,
 EMPLOYEES’ UNETHICAL BEHAVIOR AND ETHICAL CLIMATE 1415
such as “I do not feel emotionally attached to this team or organization.”
Cronbach’s  for the scale was .86.
Organizational ethical climate. We adopted a five-item questionnaire
from Victor and Cullen’s (1988) Ethical Climate Questionnaire to measure
organizational ethical climate. A sample item is “In this organization, our major
concern is always what is best for the other person.” Cronbach’s  for the
questionnaire in this study was .94.
Control variables. We used demographic factors as control variables, namely,
education level, gender, age, and length of service, because it has been shown
that they affect employees’ unethical behavior (Kohut & Corriher, 1994; Roxas
& Stoneback, 2004).

Results

Common Method Bias

We conducted Harman’s (1976) single-factor test to test for common method
bias. The results showed that the first factor explained 11.22% of the total
variance, and 41.55% of the total variance was explained. Thus, the factor
analysis did not produce a single or general factor that accounted for the majority
of the variance. Then, following Podsakoff, MacKenzie, Lee, and Podsakoff
(2003), we tested for common method bias by comparing the structural equation
models. The results showed that the goodness of fit of the four-factor model,
² = 375.87, df = 129, ²/df = 2.90, root mean square error of approximation
(RMSEA) = .076, goodness of fit index (GFI) = .90, normed fit index (NFI)
= .96, incremental fit index (IFI) = .97, was better than other factor models,
such as the three-factor model that combined psychological contract breach
with organizational disidentification, ² = 742.97, df = 130, RMSEA = .117,
GFI = .81, NFI = .93, IFI = .92. Thus, in this study, we found no common method
bias.

Descriptive Statistics and Correlation Coefficients of the Variables

Means, standard deviations, and correlations of the study variables are
presented in Table 1. The four main variables, namely, psychological
contact breach (PCB), employees’ unethical behavior (EUB), organizational
disidentification (ODI), and organizational ethical climate (OEC) were observed
to be moderately correlated. As well as the correlation coefficients of OEC and
the other three variables, r OEC-PCB = -.37, p < .01; r OEC-ODI = -.58, p < .01;
r OEC-EUB = -.62, p < .01, the rest were all significantly positive, r PCB-ODI =
.39, p < .01; r PCB-EUB = .14, p < .01; r ODI-EUB = .44, p < .01.
Table 1. Means, Standard Deviations, and Correlations for Each Variable
M SD 1 2 3 4 5 6 7 8
1416

1. Education level 4.77 0.60 —

2. Gender 1.44 0.50 -.10 —
3. Age 29.18 5.02 -.14** -.08 —
4. Organizational tenure 6.24 3.95 -.03 -.07 .74** —
5. PCB 2.25 0.40 .23** -.05 .06 .06 (.82)
6. ODI 1.72 0.70 -.05 .02 .05 -.06 .39** (.86)
7. OEC 4.14 .071 -.01 .07 .05 -.01 -.37** -.58** (.94)
8. EUB 1.14 0.25 -.01 -.11* .02 -.01 .14** .44** -.62** (.88)
Note. Cronbach’s alpha for each variable is shown in parentheses on the diagonal. PCB = psychological contract breach, ODI = organizational
disidentification, OEC = organizational ethical climate, EUB = employees’ unethical behavior. * p < .05, ** p < .01.

Table 2. Hierarchical Regression Analysis Results

Organizational disidentification Unethical behavior
Model 1 Model 2 Model 3 Model 4 Model 5 Model 6 Model 7
1. Control variable
Education level .047 -.050 .007 -.026 -.004 .039 .019
Gender -.021 -.011 -.109* -.105* -.100* -.064 -.038
Age -.006 -.045 .059 .045 .066 .146* .173**
Length of service -.056 -.053 -.058 -.057 -.033 -.104 -.119
2. Main effect
PCB .407** .141** -.043 -.140 -.087
ODI .453** .144** .102**
OEC -.598** -.555**
EMPLOYEES’ UNETHICAL BEHAVIOR AND ETHICAL CLIMATE

3. Moderating effect
ODI * OEC -.308**
ΔR2 .007 .155*** .014 .02** .17** .228** .09**
F 0.59 65.89*** 1.25 6.86* 76.67** 141.86** 64.85**
Note. Table data are standardized beta coefficients. PCB = psychological contract breach, ODI = organizational disidentification, OEC = organizational
ethical climate, EUB = employees’ unethical behavior. * p < .05, ** p < .01, *** p < .001.
 EMPLOYEES’ UNETHICAL BEHAVIOR AND ETHICAL CLIMATE 1417
Hypothesis Testing
We used multivariate linear regression analysis based on least squares
estimation to test Hypotheses 1, 2, and 3a. We used the mean-centering procedure
to process the data before building a new interaction term by adding two
variables (organizational disidentification and organizational ethical climate).
The result for Model 4 (see Table 2) showed that psychological contract breach
had a significant positive effect on employees’ unethical behavior ( = .141,
p < .01), discounting the effect of the control variables. Thus, Hypothesis 1
was supported. The result for Model 5 (see Table 2) showed that organizational
disidentification had a significant positive effect on employees’ unethical
behavior ( = .453, p < .01). The originally significant effect of psychological
contract breach on employees’ unethical behavior disappeared ( = -.043,
p > .05). These results showed that organizational disidentification completely
mediated the relationship between psychological contract breach and employees’
unethical behavior. Hypothesis 2 was thus supported. The result for Model 7 (see
Table 2) showed that organizational ethical climate had a negative moderating
effect on psychological contract breach and employees’ unethical behavior
( = -.308, p < .01). Thus, Hypothesis 3a was supported.
To further identify the moderating effect of organizational ethical climate,
we conducted a simple slope analysis. The results (see Figure 2) showed that
when the organizational ethical climate level was high, the level of employees’
unethical behavior was mostly low, and it decreased slightly as the organizational
disidentification level decreased ( = .03, p > .05). In contrast, when the
organizational ethical climate level was low, the level of employees’ unethical
behavior decreased rapidly as the organizational disidentification level decreased
( = -.11, p < .01).
We used the PROCESS macro procedure developed by Preacher, Rucker, and
Hayes (2007) to examine the degree and significance level of the mediating
effect of organizational disidentification at different levels of the moderating
variables (bootstrap default autosampling 5,000 times). The results showed that
the indirect effect was weaker when the organizational ethical climate level
was high, estimate = .0124, standard error (SE) = 0.026, p < .05, compared to
when it was low, estimate = .275, SE = 0.043, p < .01. Moreover, the bootstrap
results revealed that the indirect effect from psychological contract breach to
employees’ unethical behavior (through organizational disidentification) was
not significant at high levels, 95% confidence interval (CI) = [-0.035, 0.067]
of organizational ethical climate, but was significant at medium levels, 95%
CI = [0.099, 0.207] and low levels, 95% CI = [0.199, 0.366] of organizational ethical
climate. Thus, the indirect effect of psychological contract breach on employees’
unethical behavior was significant. This means that the weaker the organizational
ethical climate is, the more likely it is that employees’ unethical behavior caused
 1418 EMPLOYEES’ UNETHICAL BEHAVIOR AND ETHICAL CLIMATE

by psychological contract breach will occur. The stronger the organizational

ethical climate is, the weaker the mediating effect resulting from organizational
disidentification will be. Thus, Hypothesis 3b was supported.
1.2
1.0
0.8
Unethical behavior score

0.6
0.4
0.2
0
-0.2
-0.4
-0.6
-0.8
-1
Weak disidentification Strong disidentification
Organizational disidentification level

Low organizational ethical climate

High organizational ethical climate

Figure 2. The moderating effect of organizational ethical climate on the relationship between
organizational disidentification and employees’ unethical behavior.

Discussion

In this study, we proposed and tested a new theory on the internal mechanism
of employees’ unethical behavior. Our findings show that organizational
disidentification is the only necessary channel between psychological contract
breach and employees’ unethical behavior. We derived our theoretical views
from the moral disengagement view, to which we have contributed by excluding
other possible channels between psychological contract breach and employees’
unethical behavior. Our findings indicate that in the event of psychological contract
breach, employees do not immediately attempt to restore the psychological
balance through behavior, but reflect on their organizational relationship. If
these reflections lead to employees’ organizational disidentification, they tend
to conduct unethical behavior in revenge against the organization. Otherwise,
it would be more rational for employees to seek the organization’s support to
remedy the unfair treatment.
Our results have also revealed the moderating effect of organizational ethical
climate on employees’ unethical behavior. Because employees’ unethical
 EMPLOYEES’ UNETHICAL BEHAVIOR AND ETHICAL CLIMATE 1419
behavior can adversely affect innocent colleagues, a high-level organizational
ethical climate is likely to make them aware of their colleagues’ low tolerance
for unethical behavior. Thus, employees would be more careful in their
ethical decision making. If organizational identification is the first obstacle
to unethical behavior, organizational ethical climate is the second. With
low organizational identification (i.e., high organizational disidentification), a
high-level organizational ethical climate can still effectively prevent employees
from conducting unethical behavior.

Theoretical Implications
Although the interactionist perspective integrates personal and environmental
factors to explicate unethical behavior in general, there has been limited
theoretical progress based on this perspective. Microlevel research is needed for
the exploration of the mechanism of specific unethical behavior, because unethical
behavior differs. For example, some unethical behavior is conducted consciously
and externally caused. Thus, further research is required to determine whether or
not unethical behavior that occurs in different scenarios follows the same rules.
It can be inferred from the interactionist perspective that employees’ unethical
behavior has a lower probability of occurrence than general unethical behavior.
The unique features of employees’ unethical behavior are not conducive to
its occurrence. First, the ethical offenders (adult employees) usually have a
mature self-consciousness, and their ethical decisions and behavior will be more
consistent and stable than those of adolescents. Second, the work environment
is a context with a formal ethical code (in the form of employee handbooks
and identity reminders). Employees are therefore likely to be aware of a formal
external moral censor. Third, because ethical decision making by colleagues is
commonly encountered by employees, this provides them with opportunities
to conduct social learning by observing their colleagues’ appropriate ethical
behavior. Nevertheless, employees’ unethical behavior does often occur (Wang
& Hsieh, 2013). We thus suspected that some important variables generated in
the workplace had not yet been identified.
We therefore put forward and tested psychological contract breach as
an explanatory variable for employees’ unethical behavior. We argued that
psychological contract breach is a specific variable that triggers employees’
unethical behavior. As psychological contract breach often occurs in the
interaction between employees and organization agents, we regard it as an
interactive consequence rather than a personal trait. It can also be inferred that
psychological contract breach is not the only factor that can be caused by this
interaction and that affects employees’ unethical behavior. Therefore, we wish
to inspire future researchers to pay attention to specific variables that result in
employees’ unethical behavior.
1420 EMPLOYEES’ UNETHICAL BEHAVIOR AND ETHICAL CLIMATE

Practical Implications
We used the moral disengagement view to explain unconscious unethical
behavior rather than intentional unethical behavior. When employees conduct
unintentional unethical behavior, their motive is to gain private benefits, and the
role of moral disengagement is to make employees ignore the existence of norms
(Detert, Treviño, & Sweitzer, 2008). In contrast, employees’ intentional unethical
behavior motive is to balance the person-organization relationship rather than to
reap private benefits (Chen & Tang, 2006). Our theoretical contribution in this
study is helpful for the management of intentional unethical behavior.
Employees’ unethical behavior resulting from psychological contract breach
is an intentional unethical behavior. This is different from unethical behavior
related to unintended neglect of moral rules (Kaptein, 2011). Therefore, this
kind of unethical behavior cannot be prevented by improving ethics codes and
increasing self-awareness. In other words, when employees’ unethical behavior
occurs, management practitioners should not select simple coping methods, such
as punishing or warning employees. They should instead focus on three aspects:
eliminating the cause of psychological contract breach, avoiding or repairing
organizational disidentification, and strengthening the organizational ethical
climate.
First, to eliminate psychological contract breach, the key is to build a good
supervisor-subordinate relationship. Because supervisor-subordinate similarity
is negatively related to the subordinate’s perception of psychological contract
breach (Suazo, Turnley, & Mai-Dalton, 2008), employee cognitive similarity
should be considered in staff recruitment. Moreover, to enhance the quality of the
supervisor-subordinate relationship, good practice, such as providing employees
with mentors, supportive supervisors, and role models (Epitropaki, 2013),
should be incorporated. This would strengthen organizational communication
concerned with initial entry, day-to-day work, and more future-oriented,
top-down communication (Guest & Conway, 2002). Effective communication
is associated with what managers judge to be a clearer and less frequently
breached set of organizational promises and commitments, as well as with a
fairer exchange and a more positive impact of policies and practices on employee
attitudes and behavior (Guest & Conway, 2002).
Second, psychological contract breach is sometimes hard to avoid. Large-scale
psychological contract breach always occurs during organizational reform
(Conway, Kiefer, Hartley, & Briner, 2014), and predominantly involves the
social exchange relationship between employees and their organization rather
than that between individuals and supervisors. In that situation, management
practitioners should focus on preventing the negative outcome of psychological
contract breach by identifying and attending to management shortcomings,
such as dysfunctional leadership, work overload, conflicting job demands, poor
 EMPLOYEES’ UNETHICAL BEHAVIOR AND ETHICAL CLIMATE 1421
communication, lack of opportunities for career advancement, inequities in
performance evaluation and pay, restrictions on behavior, and excessive travel
(Kets de Vries, 2001). The fundamental purpose of this corrective action is
to show organizational effectiveness and to prevent organizational disidenti-
fication. To support this, managers can develop employees’ capacity to exert
self-control (Mead, Baumeister, Gino, Schweitzer, & Ariely, 2009) through
computer-mediated communication technology, and they can also take steps to
avoid employees’ emotional exhaustion (Walker, 2009).
Third, to strengthen organizational ethical climate, two managerial practices,
communication and empowerment, have been effective in the development
of ethical climate. To establish a good rules-based climate, managers should
formulate and publicize the code of ethics (Cleek & Leonard, 1998), and hold
regular activities during which employees are involved in discussions and
debates about unethical behavior. Fu and Deshpande (2012) showed that only a
rules-based climate had a significant impact on the participants’ ethical behavior.
Other types, such as professional, caring, instrumental, independent, and efficient
ethical climates, did not have an impact on the participants’ ethical behavior.

Limitations and Directions for Future Research

There are several limitations in this study. First, the cross-sectional research
design we used is less suitable than a longitudinal design for testing and verifying
the causal mechanism. Second, self-report questionnaires are less accurate and
objective than experimental methods. Third, we treated organizational ethical
climate as a single-dimension construct, whereas Peterson (2002) treated it as a
multidimensional construct.
Future researchers can address the following questions: (1) Are there factors
other than psychological contract breach, such as employees’ turnover intention,
that can lead to employees’ unethical behavior? (2) Is employees’ unethical
behavior caused by psychological contract breach a systematic discrepancy
arising from employees’ unethical behavior caused by other factors? (3) Are there
interactions with employees’ organizational disidentification? For example, if
employees recognize that organizational disidentification prevails among their
colleagues, does the organizational ethical climate still moderate the relationship
between organizational disidentification and employees’ unethical behavior?
In conclusion, our results have shown that there is a positive correlation
between psychological contract breach and employees’ unethical behavior,
and that this relationship is mediated by organizational disidentification.
Organizational ethical climate moderates the relationship between organizational
disidentification and employees’ unethical behavior, and also between
psychological contract breach and employees’ unethical behavior, by weakening
the mediating role of organizational disidentification. The lower the level of
1422 EMPLOYEES’ UNETHICAL BEHAVIOR AND ETHICAL CLIMATE

organizational ethical climate, the greater the effect of psychological contract

breach on unethical behavior will be via organizational disidentification.

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