New research highlights the dangers of moral disengagement – and points to ways that leaders can combat its threat
In today’s financial and corporate world, leadership is often celebrated for driving profits and innovation. Yet ethical accountability – the cornerstone of sustainable success – frequently takes a backseat. Our research sheds light on how leadership can inadvertently normalize unethical practices, through a concept we have termed Organizational Moral Disengagement (OrgMD). Understanding its dangers is crucial for leaders aiming to build organizations that thrive economically and ethically.
What is Organizational Moral Disengagement?
Developed by researchers from Aston University and the University of East Anglia in the UK (a project funded by Inail – the Italian National Institute for Insurance against Accidents at Work) and published in the journal Human Relations, the concept of OrgMD describes how moral standards are collectively suspended in organizations, creating environments where unethical activities become accepted and normalized. Unlike individual moral disengagement, OrgMD is systemic, reflecting a collective mindset: a shared perception that justifies, and even encourages, unethical behaviors as being in the organization’s “best interest.”
For example, euphemistic language – such as calling price fixing “stabilizing markets” – can downplay the ethical implications of harmful practices. Similarly, comparing minor misconduct to worse violations (“It’s not as bad as what our competitors do”) makes unethical decisions seem more benign. The mechanisms of OrgMD include a range of behaviors.
Moral justification Unethical actions are reframed as serving a higher purpose. For instance, cutting safety standards might be rationalized as saving jobs
Euphemistic language Harmful actions are sanitized, such as layoffs being termed “rightsizing”
Advantageous comparison Unethical practices are justified by comparing them to worse wrongdoing (“Our safety violations are nothing compared to our competitors”)
Displacement of responsibility Employees attribute responsibility for unethical actions to higher-ups, claiming “We just follow orders.” Leaders shift responsibility, including blaming “bad apples,” external regulators, or other industry actors
Diffusion of responsibility Accountability is diluted through team decisions or complex workflows, making it unclear who is responsible for harmful outcomes
Distortion of consequences Negative impacts are minimized through misleading documentation or omitted data
Dehumanization Stakeholders are devalued, referred to as numbers, or seen as undeserving of fair treatment
Attribution of blame Victims are held responsible: “They should have read the fine print before signing the contract.”
Leaders play a pivotal role in shaping organizational ethical culture. Morally disengaged thinking among leadership sets a tone for their teams, signaling that bending ethical rules is acceptable, even expected, if it benefits the organization. The displacement of responsibility in particular is key: accountability blurs and employees start justifying unethical actions as following orders or following the “rules of the game.”
Unethical pro-organizational behavior
Our study found that OrgMD significantly increases the likelihood of unethical pro-organizational behavior (UPB): actions that benefit the organization, but violate societal or ethical standards. Examples include misleading clients, falsifying reports, or hiding harmful information to protect the organization’s reputation. For instance, employees may rationalize lying to clients to secure deals. Although these behaviors aim to support organizational goals, they often result in long-term damage to trust and reputation.
OrgMD also normalizes silence. Employees may feel concerned about unethical practices but feel pressure to stay quiet. Speaking up may be viewed as disloyal, or simply futile, allowing harmful practices to persist. Over time, silence fosters a vicious cycle where unethical actions go unchallenged, entrenching moral disengagement. This cycle is illustrated by cases like Facebook’s data privacy controversies. When employees feel unable to challenge unethical decisions, the organization’s long-term viability suffers.
Preventing Organizational Moral Disengagement
Organizations can counteract OrgMD by implementing ‘ethical infrastructure.’ This includes effective reporting channels where employees feel safe raising concerns, which significantly reduces OrgMD. Conversely, organizations relying on codes of conduct without integrating them authentically into daily practices may inadvertently foster moral disengagement. A code that is seen as window dressing or irrelevant to real operational decisions can create cynicism – and when employees perceive the organization’s ethical commitments as insincere, it becomes easier to justify unethical behaviors. To be effective, ethical frameworks must be meaningful, actionable, and supported by genuine leadership commitment.
There are several steps that leaders can take to prevent OrgMD.
Cultivate transparent decision-making processes Leaders should ensure accountability at all levels by clarifying who is responsible for decisions. This discourages moral disengagement and empowers employees to raise concerns.
Invest in authentic ethical frameworks Codes of conduct are important but must be more than symbolic gestures. Ethical guidelines should be deeply integrated into organizational practices, supported by robust training and leadership commitment.
Encourage open communication Safe channels for employees to report unethical practices are critical. When employees trust that their concerns will be addressed fairly, they are more likely to speak up, breaking the cycle of silence.
Lead by example Leaders must embody the values they want to see in their organizations. This includes demonstrating zero tolerance for unethical behaviors, even when such actions might bring short-term gains.
Monitor and address OrgMD indicators Regularly assess organizational culture for signs of moral disengagement, such as euphemistic language, omission/misrepresentation of risks or unclear accountability structures.
Ethical leadership in the modern era
Ethical leadership is no longer optional – it is a competitive imperative and advantage. Leaders who understand the dynamics of OrgMD can better safeguard their organizations against the reputational, financial and operational risks of unethical activities.
Addressing OrgMD is about more than preventing harm. It is about creating workplaces that inspire trust, loyalty and innovation. Employees are more likely to align with organizational values when they see leaders prioritizing ethics, driving long-term success.
By redefining success to include integrity and societal impact, leaders have the opportunity to set a new standard for ethical organizations.
Roberta Fida is professor of organizational psychology and organizational behavior at Aston Business School. Irene Skovgaard-Smith is associate professor in organizational anthropology, Norwich Business School, University of East Anglia
