Exploring the unintended negative impact of an ethical climate in competitive environments

To attain short-term performance, sales managers must motivate their salesforce to close deals (often through use of intra-firm competition). At the same time, to maintain long-term relationships, they must promote a highly ethical selling environment (which may be incongruent with use of intra-firm competition). The present study examines the interactive relationship between competitive psychological climate and ethical psychological climate in predicting salespeople’s ethical intentions and behaviors toward customers. A unique dyadic data set is used to predict salesperson ethical intentions and actual salesperson ethical behaviors reported by customers. For ethical intentions, an “executive control” perspective predicts improved ethical intentions toward customers. However, a “depletion” perspective predicts reduced ethical behavior during actual customer interactions. This result is provocative as fostering an ethical climate in conjunction with a competitive climate is found to reduce ethical behaviors in the eyes of customers, a finding clearly counter to what managers intend.