Business Politics Impacts – Cost of Litigation, Fines, and Payouts

StrategyDriven Business Politics Impacts Article | Business Politics Impacts - Cost of Litigation, Fines, and PayoutsHarassment litigation represents a catastrophic leadership failure. In these instances, exhibited aberrant behavior may be non-compliant with applicable laws. Such occurrences represent large one-time costs associated with court mandated payouts as well as reduced productivity, heightened distraction, and elevated attrition.

Litigation events are acute occurrences unlike the more typically chronic workplace conditions resulting in diminished productivity, increased distraction, and elevated attrition. Consequently, all organizations can be subject to this type of litigation – it only takes one ill-fated event.


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Business Politics Impacts – Cost of Employee Distraction

StrategyDriven Business Impacts Article | Employee DistractionAll workplace environments have distractions diverting employees’ attention and diminishing productivity. Some of these distractions are simply a part of the human condition, our physical, intellectual, and social needs for diversionary activity. Others, however, are induced by workplace structures, policies, and employees (executives, managers, supervisors, and individual contributors) including through the abusive exercise of business politics.

Business politics vary in their impact on employee productivity. The exercise of power in a coercive or intentionally disrespectful and demeaning way creates a hostile work environment driving employees to spend significant non-productive time worrying about and avoiding these situations and people.


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Business Politics Impacts – Cost of Employee Attrition

StrategyDriven Business Politics Impacts Article | Employee AttritionThe staggering cost of employee turnover goes largely unrecognized. There is no financial statement line item, no general ledger entry, and no budget explicitly set aside for this expense that can cost evenly modestly sized companies well over a million dollars each year. Yet a significant portion of voluntary attrition is directly related to an abusive work environment created, in part, by excessive business politics. Thus, reduced workplace politics can directly improve the organization’s bottom line.

A company of 250 employees making an average of $43,000 per year experiencing a 20 percent attrition rate spends an estimated $2.15M on employee replacements annually.

Cost of Employee Attrition

The American Management Association estimates the cost of employee turnover as ranging from between 25 percent (for entry level employees) and 250 percent (for executive level employees) of the employees annual salary.1 These costs are derived from a multitude of sources including:


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Corporate Cultures – Driving and Anchoring Cultural Change

StrategyDriven Corporate Cultures Article | Corporate Cultures - Driving and Anchoring Cultural ChangeBusiness leaders often talk about changing their organization’s culture… but what does that really mean? For most leaders, changing their organization’s culture is about changing how their employees make decisions and perform work. These leaders recognize that the organization’s underlying beliefs and values systems must be altered in order to change these behaviors.


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About the Author

Nathan Ives, StrategyDriven Principal is a StrategyDriven Principal and Host of the StrategyDriven Podcast. For over twenty years, he has served as trusted advisor to executives and managers at dozens of Fortune 500 and smaller companies in the areas of management effectiveness, organizational development, and process improvement. To read Nathan’s complete biography, click here.

Corporate Cultures – Common Cultural Evaluation Misperceptions

StrategyDriven Corporate Cultures Article | Corporate Cultures - Common Cultural Evaluation MisperceptionsIn identifying organizationally shared values and beliefs, there are several common misperceptions that result in an invalid understanding of the actual corporate culture. These misinterpretations should be guarded against as cultural understanding serves as a foundation for many of management’s decisions.


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About the Author

Nathan Ives, StrategyDriven Principal is a StrategyDriven Principal and Host of the StrategyDriven Podcast. For over twenty years, he has served as trusted advisor to executives and managers at dozens of Fortune 500 and smaller companies in the areas of management effectiveness, organizational development, and process improvement. To read Nathan’s complete biography, click here.