Toxic Culture (MB#2)

A recent article (Wall Street Analyst Shreds Kraft Heinz’s Culture in Harsh Stock Downgrade) got me thinking about how organizational cultures can become toxic. Having an org culture that is recognized as bad in some way clearly costs, both in terms of turnover and negative reaction in the marketplace. One analyst identified a risk to Kraft-Heinz’s ability to innovate, due to a culture that results in high turnover. The analyst went on to downgrade the company’s stock, which immediately impacted the company’s stock valuation. The trigger to turnover here is cited as the excessive workload, which gets back to the Job Demands-Resources model that I mentioned in a previous post. Kraft-Heinz selects high performers, and promotes them quickly, but then loses them because of the staggering work load.

I wonder to what extent the JDR model can be used to understand other poor-performing or toxic cultures. Does a bad organizational culture always ultimately come back to the JDR model? If there is something wrong with the balance of job and personal resources relative to the job demands, it seems like the result must be the degradation of culture. But is it enough to restore the right balance of resources and demands? Is righting the balance enough to improve the organizational culture?

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