Instructor Resource
Collins, Business Ethics 3e
SAGE Publishing, 2022
Instructor Manual
Chapter 10: Managers as Ethical Leaders and Performance Assessments
CHAPTER 10 LEARNING OBJECTIVES AND END OF CHAPTER QUESTIONS
After reading this chapter, you will be able to
10.1 Describe the five sources of power available to managers.
End of Chapter Question 1: What are the five sources of power available to
10.3 Explain the two components of ethical leadership and how to measure ethical
leadership.
End of Chapter Question 3: What are the components of ethical leadership and how
can it be measured?
10.4 Develop organizational and work goals that foster ethical behaviors.
End of Chapter Question 4: How do you develop holistic organizational goals and
Instructor Resource
Collins, Business Ethics 3e
SAGE Publishing, 2022
CHAPTER 10 OVERVIEW
Three aspects of daily organizational life significantly impact an employee’s ethical
performance: (1) the behaviors of organizational executives, managers, and direct supervisors;
(2) work goals; and (3) employee performance appraisals.
CHAPTER 10 LECTURE OUTLINE
Suggested Time: 2 to 3 hours of class time is recommended to present this chapter.
I. Chapter Question 1: What are the five sources of power available to
managers? and the ethical issues related to authoritarian and participatory
leadership styles?
II. Chapter Question 2: Describe ethical issues related to authoritarian and
participatory leadership styles.
III. Chapter Question 3: What are the components of ethical leadership and how
can it be measured?
Personal Integrity
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Collins, Business Ethics 3e
IV. Chapter Question 4: How do you develop holistic organizational goals and
SMART work goals?
Holistic Organizational Goals
V. Chapter Question 5: How can performance appraisals be designed to
encourage ethical behaviors?
Transparent Employee Feedback
VI. Chapter Question 6: How would you coach to discipline and forgive employees
who have behaved unethically?
Major Infractions
CHAPTER 10 SUPPORTING MATERIALS
Textbook Inserts
Ethical Dilemma Analysis
• What Would You Do: Work Credit
Instructor Resource
Collins, Business Ethics 3e
SAGE Publishing, 2022
Tables and Figures
• Table 10.1: Quick Reputational Turnaround at Severn Trent Water
Self-Assessment (in Vantage only)
• Self-Assessment 10.1: Ethical Leadership Survey
Thematic Boxes
• Ethics in Action: Aaron Feuerstein at Malden Mills
CHAPTER QUESTION 1: WHAT ARE THE FIVE SOURCES OF POWER
AVAILABLE TO MANAGERS?
EXERCISE OF POWER
• Managers possess power for the purpose of achieving organizational objectives.
• Power refers to the ability to act, create an effect, or wield force.
• Social psychologists John French and Bertram Raven differentiated among five types of
Instructor Resource
Collins, Business Ethics 3e
SAGE Publishing, 2022
3. Coercive power is power obtained by enforcing punishments; “I’m going to do what
that person says because I don’t want to get fired!”
4. Referent power is power obtained because people want to be like you; “I’m going to
CHAPTER QUESTION 2: DESCRIBE THE ETHICAL ISSUES RELATED TO
AUTHORITIAN AND PARTICIPATORY LEADERSHIP STYLES?
AUTHORITARIAN LEADERSHIP STYLE
• Historically, the dominant view on how to manage an organization and its employees
consisted of managers organizing work and directing people.
• Authoritarian refers to demanding blind submission to someone in authority.
Instructor Resource
Collins, Business Ethics 3e
SAGE Publishing, 2022
• In the early 1900s, Frederick Winslow Taylor encapsulated the authoritarian leadership
style by scientifically studying every worker motion necessary to perform a task at peak
• An authoritarian management style raises several ethical issues.
o Employees are tightly controlled and their opinions are not respected. These
restrictions inhibit individual creativity and contribute to a culture of dependency.
PARTICIPATORY LEADERSHIP STYLE
• During the 1950s, Douglas McGregor differentiated between two different management
approaches, referred to as Theory X and Theory Y, based on a different set of beliefs
about employees.
o Theory X represented the traditional perspective—people were lazy, disliked work,
avoided responsibilities, and did as little as possible unless induced by monetary
Instructor Resource
Collins, Business Ethics 3e
SAGE Publishing, 2022
o As a result, Theory Y managers could get the most out of employees by
SITUATIONAL LEADERSHIP STYLE
• Paul Hersey and Ken Blanchard fine-tuned the differences between authoritarian and
participative leadership styles by noting that there is no one best way to manage
everybody.
o A manager’s leadership style needs to fit the type of employee being managed.
Blanchard further developed a Situational Leadership II Model that categorizes four
▪ Coaching—If an employee has either low or some competence and lacks
commitment, such as a disillusioned learner, the manager needs to provide
direction, guide the employee using two-way communication that stresses
accountability, and provide feedback.
Instructor Resource
Collins, Business Ethics 3e
SAGE Publishing, 2022
• Hersey and Blanchard have an ultimate preference that uses the greatest human capacity,
in this case, delegating.
• But delegation will only work if an employee has the appropriate competencies and
DISCUSSION ACTIVITY
Have students complete the free Theory X and Theory Y survey available at
CHAPTER QUESTION 3: WHAT ARE THE COMPONENTS OF ETHICAL
LEADERSHIP AND HOW CAN IT BE MEASURED?
PERSONAL INTEGRITY
• Personal integrity has long been recognized as an essential component of successful
leadership.
• Back in 1954, Peter Drucker, the “father of modern management,” noted that, “The final
Instructor Resource
Collins, Business Ethics 3e
SAGE Publishing, 2022
o The seventh most important reason was even more directly associated with ethics, the
failure to demonstrate personal integrity and foster trust. According to the
WHAT IS ETHICAL LEADERSHIP?
• Whether a situation calls for an authoritarian or participatory leadership style, one aspect
is constant in all situations—the need for an ethical leadership style.
• In a series of articles, Michael Brown, Linda Trevino, and their colleagues provide an
work to behave ethically, and hold employees accountable for ethical behavior.
• A manager’s private life affects the way employees and other key stakeholders perceive
the manager’s ethics.
o A manager who encourages and reinforces ethical behaviors at work, but engages in
drunken behaviors, adulterous affairs, drug addictions, or excessive profanity loses
• Ethical leadership can dramatically turn around dire business situations
o 2008 Severn Trent Water
▪ First utility in Great Britain to please guilty for fraud
Instructor Resource
Collins, Business Ethics 3e
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actions and interpersonal relationships, and the promotion of such conduct to followers
ETHICAL LEADERSHIP DURING CORONA VIRUS
I. Worker Support
• Danone guaranteed its 100,000 employee contracts and income until June 30th, and confirmed all
employees will have COVID-19 health coverage.
II. Jobs & Layoffs
• Morgan Stanley promised no layoffs or job cuts in 2020 due to the virus.
• PayPal promised to not layoff any employees due to the virus crisis.
• Texas Roadhouse’s CEO gave up his salary for the year to help pay frontline workers.
III. CEO Pay
IV. Customer Support
• Comcast, Charter, Verizon, Google, and Sprint signed a pledge to keep customers internet-
connected for the 60 days in April, even if people could not afford to pay.
• Zoom gave K-12 schools its videoconference tools for free.
V. Community Support
• Airbnb announced free housing for 100,000 coronavirus responders around the world.
MEASURING ETHICAL LEADERSHIP
Instructor Resource
Collins, Business Ethics 3e
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• Brown, Trevino, and Harrison developed an ethical leadership survey consisting of 10
statements that describe attributes of being a moral person and a moral manager.
• Survey 10.1, Ethical Leadership Survey, can be used to assess a specific manager. The
survey can also be used to assess top management in general by substituting “top
DISCUSSION ACTIVITY
Have students complete the “Ethical Leadership Survey” in Survey 10.1 (ONLINE ONLY) for a
boss, the president of a student organization, or the teacher. Also complete the survey as a self-
assessment.
What are the person’s strengths and weaknesses? How can the person improve a weak area? In
small groups, discuss the results.
Also address the following questions:
1. Must an ethical leader at work live a moral lifestyle outside of work? Why or why not?
o Ethical applications: Common Decencies at Work.
DISCUSSION ACTIVITY
Instructor Resource
Collins, Business Ethics 3e
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Students can be an ethical leader by making a real personal difference in the life of a friend,
classmate, or coworker through a heart-to-heart discussion or action. Ask students to provide
examples as follows:
1. When did you make a difference in the life of a friend, classmate, or coworker? Why did you
DEVELOPING ETHICAL LEADERSHIP SKILLS
• Self awareness
• Study ethical cases
SERVANT LEADERSHIP
• Many of the virtues noted above are encapsulated under the concept of servant
leadership.
•
Robert Greenleaf, an American Telephone & Telegraph executive responsible for
• Greenleaf identified eight primary characteristics of a servant leader:
1. Authenticity
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Collins, Business Ethics 3e
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5. Courage
• From a servant leadership perspective, any occupation, profession, job title, or job task is
a call to serve.
o A servant leader is one who ensures that all employees have the requisite support
DISCUSSION ACTIVITY
Have students read the Ethics in Action” situation involving Malden Mills’s CEO Aaron
Feuerstein, age 70. Malden Mills, in Massachusetts, had been in business since 1906 and in 1995
a tragic fire destroyed three manufacturing facilities, impacting the jobs of 3,000 employees.
• If you were Feuerstein, would you:
• (a) Call it quits after the fire and sell the company (you are 70 years old).
A GREAT PLACE TO WORK
• An organization composed of ethical leaders and managers would be a great place to
work. The Great Place to Work® Institute has developed a model of best management
practices for creating a work culture that achieves superior performance.
Instructor Resource
Collins, Business Ethics 3e
SAGE Publishing, 2022
• A great place to work is defined by the institute as a place where people “trust the people
DISCUSSION ACTIVITY
Have students complete the “Great Place to Work® Dimensions” in Table 10.3 for an employer,
CHAPTER QUESTION 4: HOW DO YOU DEVELOP HOLISTIC ORGANIZATIONAL
GOALS AND SMART WORK GOALS?
GOALS FOSTERING ETHICAL BEHAVIORS
• Organization and work goals clarify expectations for both managers and employees.
• Conscientious employees desire goals that establish clear measurable targets which can
HOLISTIC ORGANIZATIONAL GOALS
Instructor Resource
Collins, Business Ethics 3e
SAGE Publishing, 2022
• Traditionally, managers focus on influencing employees to accomplish the twin goals of
increasing productivity and profitability.
• The balanced scorecard is a technique that provides ethical leaders with more holistic
goals and measurements for evaluating organizational performance.
• Another popular holistic goal approach available to ethical leaders is the triple bottom
line.
o Sustainability theorist John Elkington conceived of the triple bottom line in 1994 as a
comprehensive measure that takes into account an organization’s ecological
STRETCH GOALS
• Many organizations establish “stretch goals” that challenge employees to perform at peak
efficiency and effectiveness.
Instructor Resource
Collins, Business Ethics 3e
SAGE Publishing, 2022
• Researchers report that stretch goals, however, sometimes tempt employees to stretch the
truth and behave unethically if that is the only way they can achieve the goal by the
specified deadline.
• Sales performance stretch goals are a particularly troublesome area and they contribute to
GOAL SETTING
• Depending on the nature of the job task, daily, weekly, monthly, and yearly goals can be
established, as well as interim goals, with rewards for employees who achieve them.
• SMART goals have five attributes. The SMART acronym stands for goals that are:
1. Specific—The outcome is clearly identifiable.
2. Measurable—The outcome can be measured.
Instructor Resource
Collins, Business Ethics 3e
SAGE Publishing, 2022
• Management-by-objectives (MBO) is a goal-setting technique in which managers and
their subordinates jointly determine work unit and individual goals in alignment with
organizational goals.
DISCUSSION ACTIVITY
Have students independently answer the following: Do employees in your organization or
CLAWBACK DISINCENTIVE
• Clawback refers to an employee, under certain conditions, returning money already paid.
• Sarbanes-Oxley Act of 2002 required SEC to obtain repayment of executive bonuses
STRESS MANAGEMENT
• Goals require deadlines, and deadlines can create stress through psychological and
physical tension.
• High levels of stress, inappropriately managed, can lead to health problems, low
Instructor Resource
Collins, Business Ethics 3e
SAGE Publishing, 2022
DISCUSSION ACTIVITY
Lead a short 5-minute meditation in class using the eight steps that appear in the “Stress
Management” section in the book. Upon completion, ask students if they feel more relaxed.
CHAPTER QUESTION 4: HOW CAN PERFORMANCE APPRAISALS BE DESIGNED
TO ENCOURAGE ETHICAL BEHAVIORS?
TRANSPARENT EMPLOYEE FEEDBACK
• PULSE survey
PERFORMANCE APPRAISALS
• Ethical leaders can hold followers accountable through performance appraisals.
• An employee performance appraisal evaluates factors that are directly or indirectly
related to achieving organizational and employee goals.