The interplay of exploitative leadership and team dynamics: how counterproductive work behavior and locus of control shape unethical climates

Based on social learning theory, the aim of this study is to examine the mechanisms by which exploitative leadership contributes to the emergence of a team-level unethical climate. Using a time-lag survey conducted across several industries in Pakistan, data were collected from 100 team leaders and 300 subordinate employees, comprising 100 teams. This study employed moderated mediation analysis to examine the role of team locus of control in moderating the relationship between exploitative leadership and team counterproductive work behavior (CWB), and how this indirectly contributes to team-level unethical climate. Results show that teams under exploitative leadership engage in higher levels of CWB, which subsequently promotes a team unethical climate. This effect is intensified when teams have a stronger external locus of control than internal. The findings offer significant theoretical insights into the dynamics of exploitative leadership as well as practical implications for reducing unethical team behaviors. Suggestions for future research are also discussed.