EMPIRICAL STUDY OF THE ANTECEDENTS OF POLICY NON-COMPLIANCE, THE ROLE OF LEADERSHIP, AND THE MEDIATING ROLE OF NORM LEGITIMACY

Corporate policy non-compliance continues to be a major concern for many organizations. Non-compliance to policy can lead to loss in revenue. Many organizations have measures in place to address non-compliance such as monitoring and enforcing policy. However, these measures do not always work. What leads to the non-compliance of policy? And what can organizations do to address the non-compliance? By integrating neutralizations, this study investigated the mechanisms that employees use to mitigate anticipated guilt from unethical behavior intention. The study also incorporated ethical leadership (EL) to investigate how direct managersâ ethical behaviors influence employee behavioral intentions. A field study research design was employed to test the conceptual model of intention to comply. Self -report data were collected from a sample in the United States (N = 334) and analyzed. The results show that neutralization mediates the relationship between ethical leadership and norm legitimacy. These findings suggest that when employees use neutralizations, they negate the influence of ethical leadership on policy legitimacy, and they are then more likely to be non-compliant with policy. The most important implications of these findings are that neutralizations influence employee intentions through the medium of norm legitimacy, and that influence makes non-compliance to policy the â normâ . This finding indicates that creating an awareness of how managers can mitigate the use of neutralizations can help address policy non-compliance. Theoretical and practical implications for ethical leadership and neutralization research are discussed, and future research recommendations are included.