How Internal and External Supervisors Influence Employees' Self-Serving Decisions

Abstract

The current investigation examined the effects of internal and external supervisors (i.e., formally installed institutions that hold employees accountable for their actions) on employees’ self-serving decisions. In two studies, it was found that internal supervisors reduced self-serving decisions more strongly than external supervisors did because they hold more position power over employees. The findings further suggest that the presence of both supervisors did not provide additive advantages, as employees primarily responded to internal supervisors. We discuss the theoretical and practical implications of these findings.

Keywords: self-serving decisions, internal supervision, external supervision, power bases

JEL Classification: G30, D23, C93