Research On The Impact Of Perceived Threat Of Market Competition On Employees’ Tendency Towards Anticompetitive Practices

Market-directed unethical behaviour,i.e.,unethical selling and marketing practices has been an area of interest for research scholars and they have examined a number of antecedents of such behaviour so far.Due to the fact that market-direct unethical behaviour occurs in a market,it is reasonable to examine the role of market-related factors in prompting such behaviour which has previously been ignored.Of the market-related factors,market competition is the potential determinant of employees’ involvement in unethical behaviour directed towards a market.Market competition involves uncertainty due to the emergence of new rivals,diminishing periods of competitive advantage,frequent change of consumer demands and so on.Therefore,firms demand employees to invest extra efforts and energies to survive in the market.For instance,salespersons are required to do other tasks besides their regular sales job such as market intelligence,product promotion and after sales services.As the job security and the financial benefits offered to these employees are closely tied to their performance in the market,they are more concerned about their wellbeing when they are working in a highly competitive market.Among the other negative effects of individuals’ concerns self-interests,it also has a negative impact on their morality as well.Therefore,the market competition is more likely to motivate employees towards wrongdoings in a market.However,scholars have mostly considered the indirect role of market competition in employees’ ethical transgressions in a market rather than the direct role,which has rarely been considered.To address this gap,the current research proposes a framework based on the integration of the transactional theory of stress and social cognitive theory of morality.This study assumes that market competition acts as a regular stressor for those employees whose job is closely related to a market and who perceive a constant threat to their wellbeing during the course of their job in the market.The proposed framework consists of three sections to explain how the employees’ perceived threat of market competition is related to their tendency towards anticompetitive practices.The first section explains the role of moral disengagement in linking the perceived threat of market competition to the employees’ tendency towards anticompetitive practices.The second part of the model describes the intervening role of fear of failure to explain how the perceived threat of market competition triggers moral disengagement through stimulating the fear of failure.The third part of the model describes the moderating role of moral relativism and ethical leadership.This study proposes that moral relativism moderate the direct and indirect effect(via fear of failure)of perceived threat of market competition on moral disengagement.The study also aims to examine the moderating effect of ethical leadership on the link between moral disengagement and tendency towards anticompetitive practices.To test the proposed theoretical framework,this research has opted for the questionnaire survey method to gather empirical data.Following the convenience sampling method,data were collected from the employees working in various organizations in financial sector of Pakistan.The reason for choosing the financial sector was that this sector has experienced considerable competition for the last two decades as the industry is enriched with the diversity of the rival firms.Given the fact that English is an official language of Pakistan,we used the original(English)version of questionnaire.The items for measuring perceived threat of market competition,moral relativism,moral disengagement,and the anticompetitive practices were adapted from previous studies.The responses to the items were varying on a seven-point Likert scale.In addition,the questionnaire also consisted of the items measuring the demographics of the respondents,i.e.,gender,age,and education.The collected data from the respondents(N = 393)were analysed using structural equation modeling(SEM).Besides,the bootstrapping method was used in testing the mediating and moderating effects.The results supported the proposed hypotheses.Perceived threat of market competition was positively and significantly related to moral disengagement and fear of failure.Moral disengagement had a positive and significant association with the tendency towards anticompetitive practices.There was also a significant and positive association between fear of failure and moral disengagement.Regarding the mediation effects,moral disengagement was found to fully mediate the effect of perceived threat of market competition on the tendency towards anticompetitive practices.Besides,fear of failure partially mediated the association between perceived threat of market competition and moral disengagement.Moreover,a serial mediation path was observed between the perceived threat of market competition and tendency towards anticompetitive practices with fear of failure and moral disengagement as the sequential mediators.The hypotheses related to moderating effects were also supported by the results.Moral relativism was found as a significant moderator of the direct as well as indirect effect(via fear of failure)of perceived threat of market competition on moral disengagement.Similarly,ethical leadership had a negative moderation effect on the association between moral disengagement and the tendency towards anticompetitive practices.Drawing on the integrated views of transactional theory of stress and social cognitive theory of morality,this study offers promising contributions to the extant theories and literature.By integrating fear of failure and moral disengagement in a single framework,this study contributes to the transactional theory of stress and social cognitive theory of morality.Relative to transactional theory of stress,this study offers a more plausible explanation of how the negative emotion in response to the perceived stressors directs individuals to activate moral disengagement to rationalize the resulting unethical behaviour.This study contributes also to the social cognitive theory of morality by offering emotions as the underlying mechanism to better explain the relationship between the perceived workplace environment and moral disengagement which was mostly ignored in the previous studies.Moreover,the moderating effect of moral relativism and ethical leadership advances the interactionist perspective of morality.The findings of this study should be of interest to the researchers who are concerned to study the psychological processes underlying the employees’ unethical practices in a market.This research specifically outlines the role of fear of failure in workplace which was previously ignored by organizational scholars.This research is of significant interest to the firms that rely on their workforce to achieve the desired results in a market.The management should take insights from this study to address the stress and fears of the employees about their wellbeing and should change the performance evaluation criteria of these employees from a single factor(financial benefits to the company)to multifactors.