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Summary Attributions are causal explanations made by individuals in response to important, novel, and/or unexpected events. Numerous attribution theories have examined how people use information to make attributions and how attributions impact an individual's subsequent emotions and outcomes. However, this research has only recently considered the implications of dyadic‐level attributions (i.e., relational attributions), particularly in the context of leader–follower relationships in organizations. Therefore, the purpose of this theoretical paper is threefold. First, we integrate research on attributional biases into the research on relational attributions. Second, we integrate and extend attribution theory to consider the implications of convergent and divergent internal, external‐person, external‐situational, and relational attributions for leader–member exchange (LMX) quality, relationship work, self‐work, and conflict. Third, we make the implicit ranking of attribution combinations and the resultant levels of relationship work explicit. In doing so, we contribute to attribution theory and research by proposing how attribution combinations produce positive and negative outcomes that are both intrapersonal and interpersonal. Further, we contribute to the LMX literature by explicating how leader–follower attribution combinations influence relationship quality.

Many companies prominently espouse their virtuous character in communications with investors, with a view toward influencing investor perceptions about the firm’s standards of behavior. While there are benefits to investors perceiving an organization to be virtuous, what happens if the firm violates those standards by engaging in unethical behavior? In this study, we use expectancy violations theory to argue that virtue rhetoric sets investors up for disappointment. When an organization claims to be virtuous but then acts unethically, investors respond to the ethics violation more negatively than they would otherwise. We also theorize about scenarios where investors may overlook unethical behavior or intensify their disapproval of it. To test our ideas, we assemble a unique sample of unethical events committed by S&P 500 companies over a 12-year period, combined with analysis of the virtue rhetoric found in their annual letters to shareholders. Our main finding is that investor reaction to unethical behavior is more negative for companies that claimed to be virtuous prior to the violation than for those that did not make such claims. This relationship is less strong when the company has high expected future value.

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