Abstract

While unethical behaviors that are intended to benefit the self are often severely punished, unethical behaviors that are intended to benefit the organization (unethical pro-organizational behaviors, UPBs) are disciplined within organizations at different levels of severity. Building on the sensemaking theoretical framework, we study how employees make sense of what the organization is like through observing what the organization has done (i.e., different levels of punishment imposed for UPBs) and how employees subsequently react to the results of sensemaking (i.e., affective commitment to the organization)—increased or decreased turnover and UPB engagement intention. By conducting a vignette-based experimental study and a time-lagged field study, we find that affective commitment to the organization of observers, especially those with a high moral disengagement propensity, increases at a low-to-moderate level of punishment severity for UPBs, and decreases at a moderate-to-high level of punishment severity for UPBs. Furthermore, the impacted affective commitment to the organization subsequently leads to increase in observers’ UPB engagement (intention) and decrease in observers’ turnover intention. We also highlight implications for theory and practice.