Sunday, October 7, 2012

Oxygen: How Is Your Corporate Culture Breathing? (Part 2)

A couple of weeks ago I wrote ‘Oxygen: How Is Your Corporate Culture Breathing (Part 1)’, which focused on quantitative research about the effects a toxic corporate culture can have on employee output and an organisation's performance as a whole.

This week’s follow-up article looks at the signs of a toxic corporate culture and how it affects employees personally.

So just what constitutes a toxic corporate culture?

An academic paper published by International Journal of Leadership Studies, titled from “Toxic versus cooperative behaviors at work: The role of organisational culture and leadership in creating community-centered organisations” (Gilbert, Carr-Ruffino, Ivancevich, Konopaske) provides an excellent summation of defining a toxic workplace: “A workplace may be toxic if: 
  1. mediocre performance is rewarded over merit-based output (Colligan & Higgins, 2006; Doyle & Kleiner, 1993)
  2. employees avoid disagreements with managers for fear of reprisal (Jones, 1996);
  3. personal agendas take precedence over the long-term well-being of the company (Atkinson & Butcher, 2003);
  4. leaders are constantly on edge and lose their tempers often (“Middle,” 2003);
  5. new leaders do not stay long and employee turnover is common; and,
  6. employees are treated more like financial liabilities than like assets (Macklem, 2005), and
  7. bosses routinely throw temper tantrums, make unreasonable demands, scream, and use obscenities (Anonymous, 2008).”
One word springs to mind when I read a list like this - Values. It is clear that when assessing those companies whose culture is defined as toxic, the values of the organisation are either corrupt, non-existent or exist in the world of PowerPoint templates only. In other words values misalignment equals toxicity. In such environments many people choose to leave the organisation. An early 2012 survey by Corporate Crossovers of more than 300 female entrepreneurs found almost a quarter (23%) cited that culture and values misalignment was the main reason they have left their corporate jobs. The results, as demonstrated in the previous post (Part 1) can materially impact the bottom line.

But what about those employees who stay? In a tough labour market, job choice is often limited and hence employees may be unable to resign without the security of a confirmed new job. Employees who continue to work under the stress of a toxic environment risk effecting their health. In a paper titled 'Workplace Stress: 'Etiology and Consequences' (Colligan and Higgins), the authors noting Katherine Macklem's work (point 5 above) state,

"Toxic workplaces are characterized by “relentless demands, extreme pressure, and brutal ruthlessness” (Macklem, 2005). Moreover, employees within a toxic work environment operate consistently in fear, paranoia, and increased anxiety states. Appraisals of threat or harm that arise from both high work demands and over-controlling/harassing environments have been found to be most often stress producing (Karasek & Theorell, 1990; Mausner-Dorsch & Eaton,2000). Employees experiencing chronic work stress have been shown to develop unstable blood pressure, increased cholesterol levels, muscle tension, diabetes, hypertension, ulcers, headaches, substance abuse, and clinical depression. Moreover, their capacity to concentrate and retain information becomes a problem. The employee also may experience significant anxiety, anger, and irritability (Israel et al., 1989), which may affect his or her capacity to maintain interpersonal relationships outside of the organization. Workplace stress has been shown to lower productivity, increase absenteeism, and create pervasive patterns of dysfunction in the workplace (Anderson & Puluch, 2001; Levin-Epstein, 2002). Stress has also led to changes in work habits, changes in personality (or social behavior), and job burnout. It is estimated that disorders related to stress annually claim nearly 10 percent of the earnings from businesses (Dyck, 2001)."

Often we talk and read about corporate culture as though it is merely academic theory in some business school's text book. However corporate culture is very real and a toxic corporate culture very dangerous. As the research shows a toxic work environment not only effects the health of an organisation, as measured by the bottom line, but also the physical health of employees. The evidence clearly demonstrates that it is in everyone's best interest, be they directors, managers or employees, to ensure that a toxic culture is not allowed to develop. So if you think your company's culture is sickly, chances are you may end up seeing a doctor... literally!

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Part 3 (Final) will focus on the primary causes of a toxic corporate culture.


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