I've been working with some managers and employees in a small manufacturing facility lately. It's a small business with a pretty passionate CEO and some fun-loving employees. Being a smaller business, however, it's not without its challenges when it came to management consulting, and that's how I was brought in.
Research has shown us that many employees will equate their manager's ethical behavior with competence. If the manager does something shady or questionable, the employees are less likely to think that manager knows what s/he's doing.
On the other side of that coin, sometimes any employee (manager or otherwise) will engage in non-ethical behavior when their job depends on doing something that's either near-impossible, if they're burnt out, and/or if they're not getting the support that they need to accomplish what's expected of them (and I understand those are all kind of the same thing!). Additionally, a manager may fear losing face or power if they admit to wrong-doing in front of their subordinates.
So, onto the story. A manager had purchased the wrong kind of tool for a team. They tried to use it as instructed, even though they knew it was the wrong tool, but it was still a massive fail. They knew the manager had picked the wrong tool.
The next day, the manager called one of the team members (let's call him "Joe") to blame another team member ("Ron") for buying that wrong tool. Joe and Ron had disagreements sometimes, and Joe had a better relationship to the supervisor. However, Joe knew the supervisor was the one who'd purchased the wrong tool.
Even worse, Joe had answered the phone call on speaker, so the rest of the team - including Ron - heard the manager outright try to blame Ron for his mistake.
That was a hand-to-the-forehead moment. The team wondered: Why did the manager need to blame Ron? Was he trying to turn Joe even more against Ron? Everyone knew that the manager had made the mistake and they were willing to forget it if the manager would just correct it with the right tool. There was even some rumors about the manager having a substance abuse problem which spurred this odd behavior.
I won't go into the details of how this problem was fixed, but it was a great example of how much the good employees are the ones who really just want to avoid drama and move forward with completing their work. There will always be concerns about how the manager's behavior damaged his relationship with this team, but it's also possible to repair relationships with time and effort.