This empirical study is built upon emerging research on ethical fading by investigating the influence of perceived scarcity on ethical fading in the workplace. Drawing on social cognitive theory, the study develops and tests a moderated and sequential mediated model to understand the process through which perceived scarcity triggers dispositional greed, leading to social undermining and cutting corners, resulting in ethical fading. Furthermore, the study examines the role of psychological entitlement in this relationship. It posits that when psychological entitlement is high, perceived scarcity is more likely to incite ethical fading through dispositional greed, social undermining and cutting corners.
The current study is conducted by using the positivism research philosophy, deductive approach and survey method to test the formulated hypotheses. The suggested theoretical framework is examined utilizing time-lagged data acquired from a subset of 357 individuals employed in small and medium-sized enterprise (SME) establishments.
The results suggested that perceived scarcity can lead to ethical fading with sequential mediation of dispositional greed, social undermining and cutting corners. Psychological entitlement positively moderates the relationship between perceived scarcity and dispositional greed.
The current study offers an original perspective on the critical nature of perceived scarcity, undermining, entitlement and greed in relation to the strategic importance of effectively managing and controlling ethical fading. The results offer broad backing for the assumptions, presenting repercussions for theory, application, detailed practical implications and potential areas of future research.
