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Fixing a Toxic Culture Without Firing People

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Abstract

This case study analyzes the case of an organization that needs to fix the case

disagreements in their management. Noelle Freeman is the Chief Finance Officer (CFO) of

the Franklin Climate Systems Company. There have been layoffs, unmerited, and pay cuts,

where staff might have lost their confidence. Identifying the need for proper solutions to a

company’s problems without radical approaches like those that punish the members is

crucial. Their best way is to create awareness and ensure collaboration for the best

improvement of the company. It will need to identify some indicators, train the entire

company to change to a new approach to handling the organization and practice this over

time. Importantly, they will shape their mechanisms to work that can deliver the best services

to their customers. It will be meaningful to allow the change to happen progressively until

they notice a specific working philosophy and culture.

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Contents
Abstract.....................................................................................................................................2

Fixing a Toxic Culture Without Firing People......................................................................4

Introduction..........................................................................................................................4

Problem Analysis..................................................................................................................4

Solution strategies..................................................................................................................6

Risk Mitigation...................................................................................................................10

Conclusion...........................................................................................................................11

References...............................................................................................................................13
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Fixing a Toxic Culture Without Firing People

Introduction

To examine the various management models, general organizational cultures, and

leadership in organizations, the Harvard Business Review provides a case study documenting

a case scenario of an eroded organizational culture and a toxic working environment to aid

the study. In this case, Noelle Freeman is the Chief Finance Officer (CFO) of the Franklin

Climate Systems Company, dealing in the designing, manufacturing, and engineering of

climate control systems for cars and SUVs in the United States (Gino, 2018). One of the

company's divisions has been underperforming in the last decade. Noelle is faced with

crafting a strategy and deciding how to leverage the division from its performance distress.

After comprehensively analyzing the division's problem, the CFO discovered that the

division had a poor working culture that had to be mitigated. The company's CEO suggested

firing non-compliant employees to fix the problem. Still, the human resource manager had a

different stand on unifying the employees and restructuring the organization's working

culture (Gino, 2018). The study would analyze the resulting management problems of the

division, recommend solutions to the identified challenges and provide mitigation metrics for

the risks for the company to have a performing course in the future.

Problem Analysis

After visiting Aurora and meeting with Marshall, the plant supervisor, Noelle

discovered deeper insights into the issues that Franklin Climate Systems was undergoing. She

mentions that the problem couldn't be solved numerically and required strategic solutions. In

their engagement with Noelle, Marshal was very vocal about the division's deteriorated team

culture that made employees feel undervalued and underappreciated. According to Doug, the

all-time low staff morale in the division resulted from leadership absence, which resulted in

low employee engagement in motivation and effort recognition (Gino, 2018).

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Following the suggestions of the participative leadership theory, leadership presence

encourages participation and accountability among team members. The participative theory

asserts that the leadership must consider the input of the other junior staff during decision-

making (Wang, 2022). In the case of Franklin, disengagement and absence were evidenced

when the leaders frequently elicited fear in the employees. The insertion of fear through non-

consultative pay cuts made employees believe that the organization only used its efforts to

generate profits but had no interest in bettering their welfare and working conditions.

When no one was ready to attend Noelle's financial review meeting, she realized that

the team spirit and communication ques had collapsed in the division and the entire teams

since none of the staff members wanted to participate in discussing matters of the division's

performance. The scenario evidenced the significance of communication and teamwork in

every organization. Communication mitigates strain among employees at every

organizational level of performance (Susita et al., 2020). Organizations being people-based, a

good communication orientation would encourage the employees to participate in decision-

making and share information regarding their feelings and emotions towards the various

management strategies the leadership employs.

In her explanations, Marshal mentioned how employees had lost their zeal for coming

to work and teamwork. She added that the employees had lost their confidence in the

management and lost trust in themselves as colleagues, which was very costly for the

division's performance. It was very crucial for the Franklin climate systems company

to appreciate team management to optimize performance and achieve the organizational goals

and objectives through open communication and team discipline. The problem of teams'

disengagement and toxic working environments in Franklins would be blamed on the

management, who missed the fundamental leadership principles of creating a favorable

organizational culture for their employees.

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The employees felt betrayed during the layoffs, while Cameron advocated for a purge

instead of championing his staff. The CEO lacked relevant leadership development skills to

understand the layoffs' impact on the employees' welfare and the emotional intelligence to

build stronger relationships with his workers. Therefore, the lack of leadership presence in

Franklin climate systems company resulted in a toxic organizational culture, barring

employees from delivering their full potential in innovation and collaboration that was central

to the success of the divisions.

Solution strategies

The conversation among the management team members (Noelle, CEO, and the

Human Resource Manager) showcased differing approaches and opinions for the mitigation

of the toxic culture in the organization. According to Cameron, exercising layoffs was the

strategy regardless of the financial muscles of the company (Gino, 2018). On the other hand,

Doug provided for the exhaustion of other strategies before firing or imposing layoffs on

employees. From the conversations, it is notable that an organization can implement

countless strategies to change and improve its culture. However, it remains the responsibility

of the leadership to implement either of the models. The model chosen for implementation

must demonstrate emotional intelligence and self-awareness for its success in winning the

employees' trust and confidence in the management.

According to the Kubler-Ross Change Curve, the change in the organizational culture

take three steps before it anchors as a norm within the organization (Lindblad, 2020). The

theory proposes that an organization's culture change comes as a shock and surprise to the

many stakeholders who deny the reality of the change until the integration stage, when the

change becomes a norm and part of the executive order.

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Figure 1: Kubler-Ross Change Curve

Self-awareness among the organization's leadership would uncover the strengths and

weaknesses of every member of the management and in helping them appreciate their impact

on their colleague. Additionally, self-awareness would further collaboration among teams in

the organization through inclusivity since all the executives and departmental representatives

will be brought on board for decision-making (Drigas, 2019). In her comments, Marshal

demonstrated some degree of pessimism on whether they could have a change in culture in

the future. The new culture would be attainable through regular feedback from surveys and

regular one on one meetings with the teams. At a point, mentors and coaches may need to

provide feedback on the leadership style the company has adopted (Hie, 2019). The new

culture of open communication would foster a lasting solution out of its demonstrated toxic

culture.

Additionally, one of the strategies Noelle and the team would adopt to bring a balance

through the problems would be leadership presence. In the case of Franklins, both

transformational and situational leadership would be necessary to form and change the

organizational culture. From Marshal's sentiments, it was evident that the company wasn't

tapping into the full potential of its employees due to the reduced staff morale. Through the
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transformational leadership model, the management could focus on inspiring and motivating

its employees toward their full potential. Motivation results in a culture of innovation and

collaboration since every employee focuses on the firm's productivity for job satisfaction

(Nurbaeti, 2022). On the other hand, through situational leadership, the management team

would identify the best time to propose a different management style. Understanding the

collinearity of every situation with a good leadership style mitigates the exclusion problem by

promoting a culture of consultations and collaboration.

During the recession, Cameron Koren was hired as the company's CEO to change the

underperforming history the company had reported from the last decade. The leadership

signal that led to Cameron's hiring resulted in losing trust and confidence among the

employees toward the management. The company management must realize that layoffs, pay,

and work conditions are hygienic factors that result in mistrust and job dissatisfaction among

employees if not met. The management must adhere to the mentioned primary hygiene

factors and provide the employees with career growth opportunities to win the trust back.

According to the bridges transitional change theory, the top management must

identify what they are losing to give room for learning to effect change effectively.

Additionally, the management must let go of past mistakes and undergo a strategic

psychological alignment before releasing their full energy toward the new zone(Phillips,

2023). The toxic work culture evidenced at the Franklin climate systems company can only

achieve its primary mitigation from culture change. The practical change management

conceptual framework must consider the change in leadership, employee engagement,

commitment, and communication. According to Kotter's 8-Step change model, the leadership

at Franklin's would need to foster strong leadership with a practical communication

orientation to succeed in its change management strategy (Laig, 2021). The company must

develop a strategy and communicate the change in strategy by inspiring other employees to
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act on the new strategy through motivation. Adopting the strategy at all levels of management

would anchor the new approach into a long-lasting organizational culture.

Figure 2: Conceptual Framework for Change Management

Additionally, Franklin's climate systems company management collapsed spirit of

teamwork has to be incorporated and revived back to its operations to achieve its goals and

objectives. To achieve collaboration between the management and the general staff, the

leadership has to build collaboration opportunities, such as providing brainstorming sessions

among employees to foster consultation. Disunity and loss of teamwork may arise due to

ideological differences between the employees or management employees (Asbari, 2020). As

the leadership's responsibility is to promote teamwork and collaboration, the leadership must

be flexible enough to embrace any possible differences and provide incentives while

rewarding teamwork.

Implementing strategic change in the Franklin climate systems company would begin

when the leadership puts the employees before finances or any other performance

measurement metric. After recognizing the role of employees in establishing a good

organizational culture, the leadership should change the management model to one that

would incorporate all the change strategies mentioned in the study.

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The change management model that would be appropriate for the Franklins is Kurt

Lewin's change model. The model involves creating a perception of the need for change,

restructuring the new desirable organizational behavior, and anchoring the new behavior as

the norm (Memon, 2021). The model would be appropriate for the organization due to the

need to create new employee behaviors and instill a new leadership culture among the

management teams. The leadership would be able to break down particular issues,

diminishing the staff morale among employees and prioritizing the issues by focusing on

outcomes, future innovations, and talents among the employees and the management using

the mentioned model.

Figure 3: Kurt Lewin's change model

Risk Mitigation

Implementing theoretical and practical strategies during change management may not

solve the problems that organizations face in their quest for a new culture (Asbari, 2020).

Every strategy for a new culture faces a corresponding risk factor that organizations must

learn to mitigate to gain complete and adequate change. In the case of the Franklin climate
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systems company, fostering leadership presence would be one strategy to erase the toxic

culture within its operations.

When the company chooses the transformational leadership approach to change its

leadership style, it might risk losing guidance and direction in leading the team if the new

leadership strategy cannot align with different organizational situations. Therefore, if

Franklin's climate systems company adopts this approach, the management must possess the

critical skill of self-awareness to understand their biases, strengths, and weaknesses. The skill

would enable the management to communicate effectively and adapt their leadership styles

situationally without favoritism (Asbari, 2020). For instance, In the case of Franklin climate

systems company, the company's needs for profits were prioritized over the welfare of the

employees. Transformational leadership in such a scenario would only be effective if the

management realizes and balances the welfare of its employees against its needs. Therefore,

the outcome may be risky for the organization if the situation does not align with the

leadership style.

Additionally, while focusing on employee motivation and inspiration to realize their

full potential in the company's line of operations, the leadership might overlook other factors

of the organization's success, such as formulating and setting achievable goals and objectives

(Daniels, 2019). To mitigate the risk, the leadership must stay alive to the fact that alongside

motivation, other factors equally contribute to the company's growth. Therefore, alongside

motivation for creativity and innovation, the leadership must remain open to feedback and set

goals while addressing their shortcomings.

Conclusion

For the Franklin climate systems company to maintain its good performance after the

great recession, Noelle must work with the leadership and staff to fix the problem by

changing the organizational culture. The company should stop issuing layoffs and unmerited
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pay cuts to recover its employees' lost confidence and trust. Through the skill of self-

awareness among the leadership, the collaborative spirit would regenerate among the

employees and foster the collective performance of the employees towards the common set

goals and objectives of the company.

The management must identify the indicators that led to the anchorage of the toxic

culture to sustain the newly adopted culture. Similarly, the change would have to start from

the top management before reaching the hierarchy to the junior staff. The leadership must be

aware that change is a process that may not come overnight. It would take persistence and

consistency for the change results to be evident in the organization. However, through the

proposed remedies and recommendations for culture change, Franklin's climate systems

company would eventually shape its culture to the best performance levels.
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References

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transformational leadership critics: is it still relevant? (A literature

study). International Journal of Social, Policy and Law, 1(1), 12-16.

Daniëls, E., Hondeghem, A., & Dochy, F. (2019). A review on leadership and leadership

development in educational settings. Educational research review, 27, 110-125.

Drigas, A., & Papoutsi, C. (2019). Emotional Intelligence as an Important Asset for HR in

Organizations: Leaders and Employees. International Journal of Advanced Corporate

Learning, 12(1).

Gino, F. (2018). Can you fix a toxic culture without firing people? A CFO wonders how to

turn around a struggling division. Harvard Business Review, 96(6), 143-147.

Hie, B. P. (2019). Impact of transforming organizational culture and digital transformation

governance toward digital maturity in Indonesian banks. International Review of

Management and Marketing, 9(6), 51-57.

Laig, R. B. D., & Abocejo, F. T. (2021). Change management process in a mining company:

Kotter’s 8-Step change model. Journal of Management, Economics, and Industrial

Organization, 5(3), 31-50.

Lindblad, L. (2022). A Map for Tackling the Change Curve in a Complex Organization.

Memon, F. A. (2021). Improving Employee’s Engagement in Change: Reassessing Kurt

Lewin’s Model. City University Research Journal, 11(1).

Nurbaeti, S. (2022). Significance of the Influence of Leadership Model, Morale, and

Satisfaction on Performance Consistency. Produktif: Jurnal Kepegawaian dan

Organisasi, 1(1), 10-18.

Phillips, J., & Klein, J. D. (2023). Change management: From theory to

practice. TechTrends, 67(1), 189-197.

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Susita, D., Sudiarditha, I., Purwana, D., Wolor, C., & Merdyantie, R. (2020). Does

organizational commitment mediate the impact of organizational culture and

interpersonal communication on organizational citizenship behavior? Management

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