Lies in the Sky: Effects of Employee Dishonesty on Organizational Reputation in the Airline Industry

Conventional wisdom suggests that dishonesty on the part of an organization's employees has a negative effect on the organization's reputation. However, many organizations condone (or even require) dishonesty under certain circumstances. In this research of 128 airline passengers, we examine situations in which employees are perceived to be dishonest within one such industry, the international airlines, and examine the impact of this dishonesty on organizational reputation and customer satisfaction. We found that the reputation of the firm was most damaged when the lie benefited the company or the employee, rather than the passenger. In addition, the view of the airline significantly decreased when the lie caused a high amount of harm (compared with a low amount) to the passenger.