The appointment of leaders to hierarchical positions entails the expectation that they will prioritize the welfare of their subordinates and the organizations as a whole. However, self-interested behaviors among leaders are prevalent in the business world. Given its harm to the group and the organization, extant research has mainly documented the negative reactions from the subordinates. This research sheds new light on the phenomenon that leader self-interested behaviors may sometimes be acceptable in the eyes of the subordinates. Extending the psychological licensing theory to the third-party domain and drawing on the justice literature, we develop a model of subordinate’s acceptance of leader self-interested behavior as a third-party licensing process in response to their perceived leader-experienced unfairness. Specifically, when perceiving their leaders have experienced unfair treatment, subordinates tend to ascribe psychological entitlement to their leaders, and in turn be more likely to accept leaders’ self-interested behaviors. Further, we propose that leaders’ organizational status could assuage or amplify such third-party licensing effects: the unfairness-induced licensing effects will be amplified for leaders with lower status, but assuaged for those with higher status. Findings from a multi-wave field survey and an experiment support our hypotheses. Insights into theory, practice, and future research are addressed.
