How do employees judge a leader who bribes foreign government officials for the market entry of the company’s products? What makes employees give biased treatment in favor of their friends at work? In my dissertation, I suggest that employees’ lay theories of agency influence their ethical judgments and choices. Lay theories of agency are general preconceptions about intentionality, capacity, and autonomy of individuals and groups. Chapter 1 reviews research on lay theories, defines lay theories of agency, and distinguishes them from related constructs. Chapter 2 develops the thesis about how employees’ lay theories of agency inform their judgments of leaders’ commitment of bribery. Study 1 found that Chinese working adults were more lenient than Americans when asked to imagine that their actual work supervisor had committed bribery and this was because of the stronger Chinese preconception of group agency. Effects of group agency primacy held even after controlling for alternative accounts such as organizational identification, power distance, paternalistic leadership, and personal relationship with the supervisor.

Study 2 found that when group (versus individual) agency was experimentally primed, participants became more lenient toward a leader who commits bribery. Chapter 3 develops the thesis on how lay theories of agency influence employees’ own unethical decisions, namely, their favoritism towards friends at work. Studies 3 and 4 found that Chinese employees were more likely to show favoritism at work than Americans, and again this was mediated by their greater emphasis on group agency. Study 5 found greater favoritism both in and outside the workplace when group (versus individual) agency was experimentally primed. In each of the theses I discuss the implications to specific literatures and relevant management practices. I also propose several future research directions that could potentially address the limitations of current studies.