By Marshall Schminke, James Caldwell, Maureen L. Ambrose, Sean R. McMahon
Organizational Behavior and Human Decision Processes
Volume 123, Issue 2, March 2014, Pages 206–219
This research examines organizational attempts to recover internally from ethical failures witnessed by employees. Drawing on research on service failure recovery, relationship repair, and behavioral ethics, we investigate how witnessing unethical acts in an organization impacts employees and their relationship with their organization. In two studies—one in the lab and one in the field—we examine the extent to which it is possible for organizations to recover fully from these ethical lapses. Results reveal an ethical recovery paradox, in which exemplary organizational efforts to recover internally from ethical failure may enhance employee perceptions of the organization to a more positive level than if no ethical failure had occurred.
The entire article is here, behind a paywall.