Effect of supervisors' stress on subordinates' unethical behavior: moderating role of managers' despotic leadership

Purpose By applying displaced aggression and conservation of resource theory, this paper aims to investigate the effect of supervisors' workplace stress over subordinates' unethical behavior through displaced aggression as an underlying mechanism. Moreover, it tests the moderating effect of despotic leadership between supervisors' workplace stress and displaced aggression. Design/methodology/approach The data consists of three hierarchy levels: despotic leadership (top manager), supervisor's (immediate supervisor/middle manager) workplace stress and displaced aggression and subordinates' unethical behavior. The data was collected from 80 managers about their workplace stress and displaced aggression besides perceived unethical behavior of their 240 subordinates. Findings The data analysis of 80 bank managers of Pakistan about their perception of top managers' despotic behavior and unethical behavior of their 240 subordinates shows the support for all hypothesized relationships. Supervisors' workplace stress positively affected their displaced aggression over their subordinates, which motivated subordinates to engage in unethical behavior. Moreover, the findings supported the moderating effect of despotic leadership in the relationship between supervisors' workplace stress and displaced aggression. Originality/value This study contributes to the limited studies on the trickledown displaced aggression phenomenon in the service (banking) sector. Moreover, the manager's despotic leadership role as a higher-level negative supervisory behavior in increasing the supervisors' displaced aggression shows the critical aspect in such a stressful workplace situation.