We theorized and tested employees’ moral disengagement as a transaction cost component, which may be controlled by tailoring the level of task autonomy.
In this field study, 225 employee-supervisor-matched multi-source data were collected from various organizations located in South Korea. Data were analyzed with multiple hierarchical regressions.
We found an inverted U-shaped curvilinear relationship between employees’ task autonomy and their moral disengagement, suggesting a counterproductive impact of providing moderate levels of task autonomy. Moreover, this curvilinear pattern is particularly pronounced among highly evaluated employees, which exhibits a lock-in effect of transaction costs.
Our study identifies employees’ moral disengagement as a form of organizational transaction costs, highlighting its relevance in advancing the human resource management discipline. The current empirical results do not establish causality due to the cross-sectional research design.
We recommend two governance methods to mitigate moral disengagement among employees: one that employs minimal task autonomy and another that provides maximum autonomy. This suggestion is especially relevant for effectively managing high-performing employees who are particularly sensitive to the varying levels of task autonomy.
Taking an interdisciplinary approach, this research borrows the lens of transaction cost theory and its applications to understand the employee–management relationship.
