Fear of failure in the fast lane: how stretch goals fuel unethical leadership and employee misconduct
Reports of organizational scandals often describe leaders who encourage subordinates to commit unethical acts for the organization; this phenomenon is known as leader immorality encouragement. However, the causes of and preventive methods for leader immorality encouragement have yet to be fully eluc...
| Authors: | ; ; |
|---|---|
| Format: | Electronic Article |
| Language: | English |
| Check availability: | HBZ Gateway |
| Interlibrary Loan: | Interlibrary Loan for the Fachinformationsdienste (Specialized Information Services in Germany) |
| Published: |
2026
|
| In: |
Journal of business ethics
Year: 2026, Volume: 203, Issue: 2, Pages: 357-376 |
| Further subjects: | B
Employee unethical behavior
B Stretch goals B Failure tolerance climate B Fear of failure B Aufsatz in Zeitschrift B Leader immorality encouragement |
| Online Access: |
Volltext (lizenzpflichtig) Volltext (lizenzpflichtig) |
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| 520 | |a Reports of organizational scandals often describe leaders who encourage subordinates to commit unethical acts for the organization; this phenomenon is known as leader immorality encouragement. However, the causes of and preventive methods for leader immorality encouragement have yet to be fully elucidated. Based on the dual-process theory and loss-aversion framework, we argue that leader stretch goals may increase leader immorality encouragement and subsequent employees’ unethical behavior by increasing fear of failure. We further examine the moderating effect of the organizational failure tolerance climate on the above relationship. To test the hypotheses, we conduct a scenario experiment (N = 234) and a four-wave leader-employee dyadic survey study (N = 134). The results reveal that leader stretch goals increase fear of failure, which drives leaders to engage in leader immorality encouragement, thereby triggering employees’ unethical behavior. Moreover, the organizational failure tolerance climate moderates this mediation effect, such that the mediation effect is significant only in organizations with a lower level of failure tolerance and not significant in organizations with a higher level of failure tolerance. This finding suggests that when stretch goals are applied in an unsupportive climate (i.e., lower organizational failure tolerance), they may wreak havoc on organizations. We discuss the theoretical and practical implications, limitations, and future directions of this paper. | ||
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