Who Follows the Unethical Leader? The Association between Followers' Personal Characteristics and Intentions to Comply in Committing Organizational Fraud
39 Pages Posted: 13 Feb 2017 Last revised: 22 Feb 2017
Date Written: January 16, 2017
The role of followers in ﬁnancial statement fraud has not been widely examined, even though these frauds typically involve collusion between followers and destructive leaders. In a study with 140 MBA students in the role of followers, we examined whether two follower personality traits were associated with behavioral intentions to comply with the demands of an unethical chief executive ofﬁcer (CEO) to be complicit in committing financial statement fraud. These personality traits are (1) self-sacriﬁcing self-enhancement (SSSE), a form of mal-adaptive narcissism characterized by seemingly altruistic behaviors that are actually intended to boost self-esteem and (2) proactivity, a trait characterized by behaviors reflecting efforts to positively change one’s environment. As predicted, follower SSSE was positively associated with follower behavioral intentions to comply with CEO pressure to commit fraud, while follower proactivity was negatively associated with fraud compliance intentions. Also, as predicted, follower SSSE interacted with follower proactivity, such that followers high in SSSE and high (low) in proactivity reported greater intentions to resist (comply with) pressure from the unethical CEO to commit fraud compared to low-SSSE followers. Implications for future research and corporate governance are discussed.
Keywords: Unethical Leaders, Susceptible Followers, Self-Sacrificing Self-Enhancement, Proactivity, Financial Statement Fraud
JEL Classification: M41, M49, L20
Suggested Citation: Suggested Citation