A Social Exchange Perspective of Leader Nepotism: The Roles of Kinship and Self-Interest

Abstract Although nepotism practices are commonplace worldwide and while still being universally condemned, little is known about how and when employees react to leaders’ nepotism. Informed by social exchange theory, we theorize that leader nepotism is negatively linked to employees’ unethical pro-leader behavior (UPLB) via reduced trust in the leader. We further examine whether the relationships among leader nepotism, employees’ trust in the leader, and UPLB are bounded by kinship to the leader (first-stage moderator) and career self-interest (second-stage moderator). Three studies were conducted to test the research model: an experiment in Jordan (Study 1), two experiments in China (Studies 2a and 2b), and a multi-wave organizational sample in Jordan (Study 3). Results revealed that leaders’ nepotism negatively affects employees’ UPLB through reducing their trust in the leader. Additionally, the negative effect of leader nepotism on trust in the leader was lower for employees with kinship to the leader, and the effect of trust in the leader on UPLB was higher for employees with higher career self-interests. With these findings, we advance research on the effects of leaders’ nepotism and its boundary conditions and provide insights for practice.