Abstract

Extending ethical leadership theory and research beyond the walls of the organization, we propose a spillover model wherein ethical leaders impact customer loyalty (i.e., repeat purchase amount) by first establishing trusting relations with employees, who in turn emulate their leaders’ ethical behavior. In Study 1, we examined how this initial trust (i.e., trust primacy) facilitates new employees’ moral imprinting in a controlled experiment. In Study 2, with a field design, we tested our model among new employees and their respective customers over a 6-month timespan. Results indicate that perceptions of ethical leadership operate through trust primacy to affect customer repeat purchase, with accelerated growth over time. We conclude by considering theoretical and practical implications as they relate to ethical leadership and trust primacy, as well as marketing and salesforce management.