Purpose: The purpose of this study is to understand how ethical leadership and coworker ethical behavior will influence employee unethical pro-organizational behavior (UPB). In particular, the authors examine the mediating effect of moral disengagement on the relationship between ethical leadership and UPB and also investigate the moderating effect of coworker ethical behavior on the aforementioned effect. Design/methodology/approach: Data were collected from 251 employee–coworker dyads from five organizations in Taiwan at two time points. Moderated mediation analysis was conducted to test the hypotheses. Findings: The results show that moral disengagement mediates the relationship between ethical leadership and employee UPB. Moreover, the results show that coworker ethical behavior moderates the relationship between moral disengagement and employee UPB, as well as the mediated relationship between ethical leadership and employee UPB via moral disengagement. Specifically, both the moral disengagement–UPB relationship and the ethical leadership–moral disengagement–UPB relationship become weaker when coworker ethical behavior is high. Practical implications: The results highlight the importance of creating an ethical work environment to get everyone behaving ethically in the workplace, because nurturing an ethical atmosphere in organizations will be useful in reducing the occurrence of UPB even for those who have high levels of moral disengagement. Originality/value: This study shows that coworkers matter morally as much as leaders, demonstrating the importance of social influence from coworkers in organizations.
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