Linking perceived market competition threat to moral disengagement: The roles of fear of failure and moral relativism

Abstract

Drawing on moral disengagement theory, this study examined the interplay of perceived market competition threat, fear of failure, moral relativism, and moral disengagement. Perceived competitive threat was proposed to be positively related to moral disengagement, and fear of failure was proposed to mediate the relationship between perceived competitive threat and moral disengagement. Furthermore, moral relativism was anticipated to have a moderating effect on the direct and indirect relationships (via fear of failure) between perceived competitive threat and moral disengagement. The hypothesized relationships were examined using self-report survey data collected from 393 employees in the financial sector in Khyber Pakhtunkhwa Province, Pakistan. Structural equation modeling and bootstrap analysis techniques were used to test the articulated hypotheses. The results were consistent with our proposed hypotheses. The findings offer theoretical and practical implications that are discussed at the end.

Appendices

Appendix 1

Perceived Competitive Threat

• 1. Firms in our industry compete intensely to hold and/or increase their market share.

• 2. In our industry, competitive moves from one firm have noticeable effects on other competing firms and thus incite retaliation and counter moves.

• 3. In our industry, firms have the resources for vigorous and sustained competitive action and for retaliation against competitors.

• 4. There is diversity of competitors in our industry (i.e. competitors may be diverse in strategies, origins, personality, and relationships to their parent companies).

• 5. There is “warlike”, “bitter” or “cut throat” competition in our industry.

• 6. The availability of substitutes services limits the potential returns in our industry.

• 7. Substitute services limit the profitability of this industry.

• 8. In our industry, there is considerable pressure from cheaper substitutes.

• 9. Our industry offers services for which there is a large number of substitutes.

• 10. Our industry’s offerings serve functions which may be easily served by many other offerings.

Appendix 2

Fear of Failure

Fear of Shame & Embarrassment

• 1. When I am failing, I worry about what others think about me.

• 2. When I am failing, I worry that others may think I am not trying.

• 3. When I am failing, I feel that my doubters feel that they were right about me.

• 4. When I am not succeeding, I am less valuable than when I succeed.

Fear of Upsetting Important Others

• 5. When I am failing, I lose the trust of people who are important to me.

• 6. When I am failing, I expect to be criticized by important others.

• 7. When I am failing, it upsets important others.

• 8. When I am failing, I let down people who depend on me.

Fear of Losing Social Influence

• 9. When I am not succeeding, my value decreases for some people.

• 10. When I am failing, I feel like I am losing a great opportunity to accomplish something.

• 11. When I am failing, I am afraid that I won’t be allowed to try again.

Appendix 3

Moral Relativism

• 1. What is ethical varies from one situation and society to another.

• 2. Moral standards should be seen as being individualistic; what one person considers to be moral may be judged to be immoral by another person, and vice versa.

• 3. Different types of morality cannot be compared as to “rightness.”

• 4. Questions of what is ethical for everyone can never be resolved since what is moral or immoral is up to the individual.

• 5. Moral standards are simply rules which should indicate how a person should behave and are not to be applied in making judgement of others.

• 6. Ethical considerations in inter personal relations are so complex that individuals should be allowed to formulate their own individual codes.

• 7. Rigidly following an ethical position that prevents certain types of action could stand in the way of business benefits.

• 8. No rule concerning an unethical action (e.g., violation of rules) can be formulated; whether the action is permissible or not totally depends upon the situation.

• 9. Whether an action (e.g., rule violation) is judged to be moral or immoral depends upon the circumstances surrounding the action.

Appendix 4

Moral Disengagement

Diffusion of responsibility

• 1. In a competitive market, where everyone ignores ethics, there is no reason not to do so.

• 2. It’s okay to do anticompetitive tactics if the whole company agrees that it’s the best way to handle the competitive situation.

• 3. If a work group decides to do something that violates market ethics, it is unfair to blame any member in the group for it.

• 4. An employee from a work group should not be blamed for the harm/damage in a market that a group of employees causes.

Displacement of responsibility

• 1. If employees are working under threatening/uncertain market competition, they cannot be blamed for ignoring market ethics.

• 2. If employees are not properly supervised, they should not be blamed for working in an unethical way.

• 3. Employees cannot be blamed for wrongdoing if they feel that their boss pressured them to do it.

• 4. Employees are not at fault for wrongdoing if their boss puts too much pressure on them to perform.

• 5. If an employee perceives that his/her company wants him/her to do something unethical, it is unfair to blame the employee for doing it.