federal mediation and conciliation service (fmcs) case-analysis-toxic-leadership-final-revised -...

CASE ANALYSIS: TOXIC LEADERSHIP

[“Widely Distributed within National and International Academic Community”]

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UNIVERSITY OF MARYLAND UNIVERSITY COLLEGE


CALL TO PAPERS SUBMISSION FOR:

THIRD INTERNATIONAL CONFERENCE ON ENGAGED MANAGEMENT SCHOLARSHIP

TANYA PELCHER-HERRING

DOCTORATE OF MANAGEMENT GRADUATE STUDENT



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ABSTRACT

This case analysis explores an extreme case of a dysfunctional leadership style –the toxic

leader. The examination investigates the toxic behaviors of dysfunctional leaders, their qualities,

followers, and the range of toxicity factors that render the organization and its members prone to

ethical misbehavior. The case details are extrapolated from the files of the federal civil service’s

Merit System Protection Board (MSPB) and those of the Office of Special Counsel (OSC),

where there is an over abundance of similar cases of public servant dysfunctional leadership.

These cases bring forth research questions of: 1) Whether toxic leadership traits can be screened

before hire and after hire within the federal government. 2) After hire, how can these toxic

leaders be shed and nontoxic leaders recruited?

As human beings, there is an innate psychological need for belonging and security, but

the need for authority and order are how well informed leaders thrive. In times of crisis,

followers long for leadership. Subsequently, a fear exists where there is chaos and no power.

Good leaders communicate a vision that inspires followers. Time-and-time again, toxic leaders

provide a simplistic vision to complex problems; yet, many followers do not understand the

intricate underlying issues, ethical or unethical, of a visionary, but follow them faithfully. Jean

Lipman-Blumen describes the process as an “interaction,” not an action. Blaming toxic leaders

for their faults and failures is easy; however, toxic leadership could not exist without follower

compliance. These questions are examined and discussed under the theories, models, and

concepts of dysfunctional leadership styles, toxic leadership, followership, trust, and

organizational behavior in this analysis.



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THE PROBLEM

PROBLEM IDENTIFICATION

A small government agency in Washington, D.C. suffered from severe mismanagement

due to unethical, fraudulent, and illegal behaviors. Toxic leadership is described by Lipman and

Blumen (2005) as destructive and dysfunctional behaviors with characteristics that impose grave

and lasting damage. This case presents an index of problems involving the adverse current

operating culture and a host of negative leadership and follower sub-problems resulting in

administrative, civil, and criminal penalties. More importantly, the Office of the Inspector

General, the Senate Subcommittee on Financial and Contracting Oversight, and the Federal

Bureau of Investigation are currently involved in the investigation1. Under the weight of the

legal issues and impending ramifications, the organizational climate has further negatively

diminished2. This analysis will explore the problem from a cause and effect posture to determine

if toxic (destructive and dysfunctional) leadership is the causative factor.

PROBLEM DEFINITION

Voluminous pending administrative, civil, and legal charges are being leveraged against

the agency. Its members’ toxic destructive and dysfunctional leadership are cited as the likely

cause. The detailed fraud, waste, and abuse charges illuminate ethical violations and corruption.

The administrative and human rights charges convey diminished decision-making, a lack of trust,

and a high degree of individual and organizational conflict. A quandary of issues represents

ignored red flags (warning signs) shouting organizational safeguard and structure gaps. Gano

(1999, p. 41) and Anderson and Fagerhaug (2006, p. 12) note that effect has two causes that

formulate the subsequent action and conditions. These fraud, waste, abuse and illegal activities

(or effects) have serious consequences and this case analysis explores what caused the problems

and why.

FACTS OF THE CASE

The public records of the investigative agencies outline the case details. No assumptions

are stated or made in this analysis beyond the events, timelines, names, titles, and statements of

key actors’ described in the official investigation of administrative, civil, and criminal charges.3.

This case focuses on a small federal agency, a key senior leader, her direct-report

followers, and the organizational culture. The agency consists of over 30 virtual teams,

throughout the nation, with headquarters in Washington, D.C. The female senior leader is the

sister-in-law of the agency director’s assistant and very politically connected. This became

evident throughout her stay, as the agency’s director, who happens to be a presidential appointee,

handpicked her. Her role is to lead the headquarters staff as Agency Deputy Director.

Externally, the agency and the female leader display the epitome of functionality. For years, the

1 Information accessible through the Freedom of Information Act (FOIA) and public records from case numbers:

Office of Special Counsel (OSC): OSC DI-12-523, OSC MA-12-019 & OSC MA-12-2422 prohibited practices, fraud waste and abuse, gross mismanagement of funds and government property charges outline: Merit Systems

Protection Board (MSPB) Case #DC-0752-13-0152-I-1. 2 Federal Equal Opportunity Employment Cases #FMCS-003 and #FMCS-002, Reports of Investigation Equal

Employment Opportunity Complaint; Congressional Inquiry Documents of Congressman Van Hollen of Maryland 3 Charges - The agency name and key actors are omitted from this case analysis, but are disclosed in case files.



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agency’s leadership team has been highly admired in government and political arenas. At one

point, the agency held the honor as one of the top ten small agency places to work. However,

internally, within four years of the new leader’s arrival, there has been a high level of team

discord and organizational conflict at the headquarters level.

Within approximately 18-months of the new leader’s arrival, there was an antagonistic

departure of three out of five of the existing headquarters’ department heads. The new leader

quickly replaced the department heads with loyal followers, one with substantially less

experience and qualifications. By the second year, internal rumors of funding mismanagement,

management interference, complaints of discrimination, and conflict ran rampant. Formal

complaints soon followed from new team members, including discrimination violations,

management interference, misuse of technology, reporting fraud, and violation of rules for

purchases and acquisitions. A pattern of circumventing and overt ignoring of the rules had

emerged. Over time, extravagant and lavish purchases, use of alcohol at government events,

travel arrangements, and select follower celebrations - ‘identified’ as employee recognitions -

became a norm. Direct-report followers and other senior leaders ignored, justified, validated,

and verified transactions that were clearly beyond the scope of the policies, subsequently

becoming complicit. In 2011 and 2012, a coalition of new followers refused to comply with

contractual acquisition authorizations and blew the whistle.

THE ANALYSIS - ANALYTICAL FRAMEWORK

The objective of this case analysis is to separate the case material or abstract entity to its

constituent elements to determine if the cause is toxic leadership. The chosen process is the Root

Cause Analysis4 (RCA) Method (Andersen & Fagerhaug, 2006, p. 12). The RCA is a

constructive process for investigating a problem. The analysis methodology will provide insight

of the complex systems in and around the problem. The next step is for the analysis to reveal

key failure points as candidates for levers of change. To capture the complexities of destructive

and dysfunctional behavior, Lipman-Blumen (2004, 2005) and Kellerman (2004) recommend a

multidimensional framework. As a result, two resource models were identified to assist in

building the framework for this case analysis.

ROOT CASE ANALYSIS TOOL: THE CIRCUMPLEX MODEL

The first analytical tool is the Plutchick’s (1980) Circumplex Model5 presented in Figure

1. The Circumplex Model is used to examine the primary and secondary problematic outcomes

to the contextual components of toxic leadership, ethics, trust, decision-making, and

organizational culture. More specifically, the Circumplex Model’s role with the RCA is to help

identify the orientation direction (current state/operating culture) and degree of intensity with the

case targeted parties. According to Cook (1987) and Kotter (1992), cultures that lack direction

are typically the result of misalignment among internal structures, systems, technology, and

skills/qualities.

4 Root Cause Analysis (RCA) can be traced to the broader field of Total Quality Management (TQM). Root cause

analysis is an integral part of problem analysis and problem solving (Anderson & Fagerhaug, 2006, p. 12). 5 Circumplex Model – Figure 1, developed by Robert Plutchik (1980), the wheel of emotion used in this case

analysis as an analytical framework to illustrate different emotions, compelling and nuanced behaviors.



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FIGURE I – CIRCUMPLEX MODEL

Figure 1. Diagram Source: Cook, 1987; Cook & Lafferty, 1987 & Kotter, 1992

The model brings together the leadership impact on individuals and the organization by identifying the 12 styles of

thinking, behaving, and interacting into three general orientations:

1) 11 to 2 o’clock, Constructive Styles–Members interact with others and approach tasks in ways that will help

them to meet their higher-order satisfaction needs,

2) 3 to 6 o’clock, Passive Defensive Styles-Members interact with people in ways that will not threaten their own

security, 3) 7 to 10 o’clock, Aggressive Defensive Styles - Members approach tasks in forceful ways to protect their status

and security.

The three orientations aid in interpreting the organization’s current culture and movement to the ideal culture. When

considering the current culture, both direction (reflected by the orientation arrows) and the intensity (reflected

by the color and color levels in the inner circle rings) have specific interpretation roles. Direction explains what

is (and is not) expected for culture transition; intensity informs the level or degree (Cook, 1987; Cook & Lafferty,

1987 & Kotter, 1992).

ROOT CASE ANALYSIS TOOL: THE TRAPEZOID MODEL

Next, the trapezoid model6, illustrated in Figure 2, flushes out the problematic causal

factors, identifies empirical methods, theories, and practices as levers of change to transition the

agency’s current operating culture with the values, skills, and qualities needed to transform the

leadership team to an ideal culture. The role of the trapezoid model in the RCA process is to

assist in determining the analysis causation and potential remedies: 1) What happened (primary

actions and behaviors)? 2) Why did it happen – (what safeguards were ignored)? 3) What to do

to prevent the likelihood it will occur again – (plausible remedies to propel the levers of change)?



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Root Cause Analysis Principles are constants and are unchangeable from problem to

problem (Anderson &Fagerhaug, 2006). Similarly, the cause-and-effect principle is universal to

a myriad of problems. In this case, the Trapezoid Model isolates the causative factors that feed

into the current operating state of corruption, organizational relationship conflict, and failures.

The shift can occur when the focus moves to address the identified causes and the subsequent

effects. The Trapezoid Model further illustrates empirical resources for change, to include Lewin

and Schein’s Change Theory model of “cognitive redefinition” (Schein, 1995), whereas Levels

of Action 1 and 2 - Stage 1–unfreezing causative factors and current operating culture and Stage

2–unfreezing current operating culture and moving to an ideal culture/or new state, and Level of

Action 3 - Stage 3 – refreezing to ideal culture (new state becoming permanent) (Schein, 1995;

Schein, 1999; Smith, 2001).

FIGURE 2. TRAPEZOID MODEL – ROOT CAUSE ANALYSIS

Causative Factors

• Power-based Leadership

• Lack of integrity that reveals leaders as cynical, corrupt, or untrustworthy

• Insatiable ambition that prompts leaders to put their own sustained; power, glory, and fortunes above their followers’ well-being

• Egotism and Arrogance

• Leadership Borderline Personality Disorder

Operating Culture

• Violating the basic human rights of their own supporters and others

• Deliberately feeding their followers illusions that enhance the leader’s power and impair the followers’ capacity to act

• Engaging in corrupt, criminal, and/or other unethical activities

Ideal Culture

• System II Thinking, Debias Judgment in Managerial Decision Making

• Individual and Corporate Trust

• Organization and member resilience

• Constructive Organizational Culture: achievement, self-actualizing, humanistic encouraging, and affiliative

Lewin’s ForceField Analysis

Simon’s Rational Model

Erosion of trust,Bradenburger & Nalebuff (1996)

Trampled on Rightsof Others,Hickman

(2010)

Bad Management, Kellerman (2004);Handy (1976); Harrison (1972)Linking organizational culture

& organizational structure; Power Culture

Unfreezing;Bazerman & Moore (2010);

Lewin/Schein’s Change Theory (1995)

Toxic Leadership, Destructive & Dysfunctional,

Followers shoulder much of the blameLipman-Bluman (2006)

Schein’s Model (1992), 3 cognitive levels of

Organizational Culture

Levers of Change

Level of Action #1 (Cause) Level of Action #2 (Effect) Level of Action #3 (Change)

Figure 2. (Diagram – Pelcher-Herring, 2013) The Trapezoid Model represents components of the case analysis to

show grouped and related values; the figure depicts the causative factors, dysfunctional and destructive behaviors,

creating the toxic leadership operating culture; illustrates the how and why; identifies the change leadership skills, qualities, and values needed to transform the current operating culture to an ideal operating culture. Source:

Bazerman & Moore (2010); Bradenburger & Nalebuff (1996); Ford, Ford & D’Amelio (2008); Handy (1976);

Harrison (1972); Hickman (2010); Kellerman (2004, p. 38); Kumar (1999); Lipman-Bluman (2006); Mintzberg &

Westley, 1992; Schein (1992); Simon (1997).



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EXAMINATION OF THE CAUSATIVE FACTORS

TOXIC LEADERSHIP CONSTRUCTS

This government leader’s management style clearly exemplifies the toxic constructs of

leaving her followers worse off than as she found them. However, Lipman-Blumen (2004, 2005,

2006) describes toxic leadership as vexing, while other scholars dissected the characteristics.

Other scholarly researchers share similar and broader views. For example, Hogan and Hogan

(2001, p. 40-51) portray bad management as the dark side of leadership. The author’s concepts

of bad leadership are shared by Erickson, Shaw and Agabe (2007, p. 26-43) and Kellerman

(2004). Ferris, Zinko, Brouer, Buckley, and Harvey (2007, p. 195-206) broaden the scope to

bullying as a component of toxic leadership. Case files show credence in Ferris’, et al (2007)

views where followers feared senior leader actions and their abusive supervision tactics (Tepper,

2000, p. 178-190). Paunonen, Lonnqvist, Verkasalo, Leikas, and Nissinen (2006, p. 475-486)

label the senior leader’s destructive behavior as narcissistic (Einarsen, Aasland & Skogstad,

2007, p. 207-216; Kellerman, 2004; Lipman-Blumen, 2006) and explore borderline mental

disease and defect. Collectively, these investigative approaches to behaviors and organizational

leadership styles carry the label of “destructive and dysfunctional” leadership.

THE INDIVIDUAL LEADER

Referring to the Circumplex Model, bad leadership, bullying, and abusive supervision

characteristics of this case have the strongest extensions to the Aggressive/Defensive cluster. In

the Aggressive/Defensive cluster, the primary style of leadership is power (Lukes, 2005). Power

is depicted in the Trapezoid Model as a causal factor of the agency’s toxic leadership operating

culture. House and Aditya (1997) explore the Power Motivation Theory and note that traits are

derived from satisfaction through influencing others (p. 414). Additionally, Handy (1976) and

Harrison (1972) identify leaders in this cluster are expected to be “winners” at any cost, out-

perform their peers, be seen and noticed. According to Kotter (1992), leaders expect to use their

authority and position extensively. Subsequently, the Circumplex Model shows the likelihood

that the Aggressive/Defensive style’s movement pushes followers toward the direction of the

Passive/Defensive cluster and away from the constructive cluster (Argyris, 1998, p. 98-105;

Follett, 2011; Porter, Steers & Mowday, 2007). Kellerman (2004) indicates that toxic leaders

are motivated by the fear of their followers. Hence, the toxic leader manipulates and stifles

followers with criticism. The reactionary behavior from followers was a fear to question leader

actions or judgment (Kellerman, 2004; Follett, 2011). This behavior is indicative of the

dependent and avoidance characteristics of the Passive/Defensive cluster. In this case, the senior

leader was infamous for bludgeoning followers at meetings or behind closed doors. Statements

indicate the senior leader had swayed her loyal followers to carry out her orders. Obediently, her

followers carried out her orders despite the foreknowledge that her orders violated federal rules,

policies, and human decency. Hickman (2010) described this behavior as, “…unethical

leadership fails to distinguish between right and wrong. Because common codes of decency and

good conduct are in some way violated, the leadership process is defiled” (p. 393). A Gellerman

(1989) state that the example set by senior management is vitally important (p. 74). As a result,

the case facts show followers assimilated oppositional behaviors and traits. Therefore, under this

concept, the red in the intensity scale of the Circumplex Model would show a significant



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increase. These behaviors would support Gellerman’s (1989) posits that conscience is a factor in

ethical dealings and management should shield employees from “circumstances that strain their

ethical standards” (p. 78). Lipman-Blumen (2004) addressed “toxic leadership” as not just an

average mismanagement issue. Instead, the author describes these leader actions more intensely

as those with a “dysfunctional personal characteristic” and “destructive behavior.” The author

also explains that these leaders have the capacity to, “… inflict reasonable serious and enduring

harm” (p. 373). Barbara Kellerman (2004) joins Lipman-Blumen (2004) to explain that a toxic

leader’s pattern is so predictable that the behavior and outcome has been coined as a “rule of

thumb” (p. 15-38).

The problem of toxic leaders has become such a concern that new scholarly research has

attached psychological disorders to the behavior. Goldman (2006) has conducted extensive

research on the topic of toxic leaders and published works with the American Journal of

Psychology. He has espoused, “… borderline personality disorder is a prototype of preexisting

toxic behavior (p. 733-746).” Goldman (2006) escalates the issues the problem raises by stating,

“… the toxic behavior centers in an individual leader and permeates throughout an organization

(p. 733).” The author captured a statement by Kets de Vries, when he explained, “some leaders

go far beyond the abnormal ways of functioning… they go off the deep end” (Kets de Vries,

1995, p. 217). The “deep end” is probably the best way to explain some of the extreme

behaviors exhibited by the senior leader and her followers. As an illustration, the EEO reports

denote that this senior leader denied reasonable accommodations for a handicapped follower,

who refused to conform, and initiated removal and police escort removal for other another

nonconforming follower. The handicapped follower filed Congressional complaints, as well as

federal noncompliance complaints (outlined on the Trapezoid Model: loss of trust, violation of

human rights). Consequently, the agency is currently pending potential huge financial fines and

damages (refer to the Trapezoid Model, operating culture, result of unethical activities). The

agency and key actors have received subpoenas for documents and individual depositions.

Multiple complaints from varying people should have been a red flag to the agency

director. The senior leader’s actions reflect an innate power-hungry persona. In addition, the

events appeared to illustrate some level of utopia from the abuse and use of her power (Lipman-

Blumen, 2004; Kellerman, 2004). Plotted on the Circumplex Model, the leader actions would

show a high intensity red rating in the Power, Aggressive/Defensive cluster. The senior leader’s

court and deposition records repeatedly convey her declarations of a lack of intent or even

knowledge that she had been a part of anything wrong. Despite her legal background, the senior

leader made multiple conflicting official statements throughout the investigation. However,

Hickman (2010) provides a moving statement that surmises the senior leader’s proclamations of

no intent and innocence. Hickman (2010) states, “if ethical behavior intends no harm and

respects the rights of all affects, and unethical behavior willfully or negligently tramples on the

rights and interests of others, then leaders cannot deny the rights of others” (p. 351). Lipman-

Blumen (2005) provides clarity to the intentions of toxic leaders by stating, “… those leaders

who deliberately injure others or enhance themselves at others’ expense are regarded as

intentionally toxic” (p. 2). On the other end of the spectrum, “… unintentionally toxic leaders,

whose careless or reckless action, including incompetence, nonetheless cause significant

negative effects” (p. 2). The facts of the case would lead a reasonable man to surmise that there

were significant negative effects from the bullying, harassment, abuse of power, and unlawful

personnel actions.



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THE FOLLOWER

Kellerman (2004) posits that how followers react to bad leaders determines the bad

leaders reign. The author continues her perspective by stating, “… an intentional investigation of

the natural man shows a tendency for incompetence, rigidity, intemperance, callousness,

corruption, insular, and evil” (p. 15-38). Kellerman (2004) concludes, “Followers are every bit

as important to leadership as are leaders… since you can’t have bad leadership without having

bad leaders and bad followers” (p. 38). Lipman-Bluman (2004, 2005, 2006) advocates that

toxic leadership depends upon the followers, many of whom recognize, but tolerate it. The

Circumplex Model illustrates intensity and the rotational movement of toxic behaviors from

Lipman-Blumen’s (2005, p. 5) three key values: 1) Security: internal psychological perspective,

2) Fears: external environment, and 3) Satisfaction: psychosocial. Lipman-Blumen’s (2004)

theory is founded upon Maslow’s revised (1971) hierarchy of needs, which progresses through

the primitive basic needs, e.g. food, shelter and basic necessities and accents that, “followers

seek safety, love, esteem, cognition, aesthetics, and self-actualization, and culminate in

transcendence” (p. 5). From this examination, a conclusion can be drawn that the agency’s

followers appear to fit the Security Needs, People, and Satisfaction Needs orientation of the

Circumplex Model. This insular vacuum of long-term and egregious illegal actions from

leadership is how the organization operated for years, scaffolding the current operating culture

reflected in the Trapezoid Model – Level Action 2. In many instances, the follower’s actions

were similar to Argyris’ (1998) “Empowerment: The emperor’s new clothes.” Everyone knew

what was going on, but pretended nothing was wrong. However, during the formal investigation,

the same followers acknowledged wrong doings, but cited fear of losing their jobs as reasons for

failing to report allegations of fraud, waste, and abuse. Based upon these actions, other

deductions can be inferred that the leader’s direct-report followers have a high need for security.

If plotted on Circumplex Model, these followers would be in the Passive/Defensive Styles with a

high intensity in dependent and avoidance. On the Trapezoid Model – Level Action 1, these

behaviors are causative factors, flowing to the current operating culture at Level Action 2;

therefore, the agency’s behaviors meet the toxic leadership definition. Unsurprisingly, the senior

leader along with each of her direct report followers are lead actors in each formal complaint of

prohibited personnel practices, management interference, and discrimination (Hickman, 2010;

Kellerman, 2004, p. 29-38; Porter, Steers & Mowday, 2007; Price, 2005). The multiple

complaints from stakeholders and followers should have been yet another red flag for the

Agency Director. Nevertheless, the case files show the Agency Director’s behavior is one of

denial and ambivalent of the troubled environment (Frost, 2003).

THE ORGANIZATION

Practitioners and management scholars identify an interrelationship between leadership

and organizational dysfunction (Frost, 2003; Fox & Spector, 2005; Kellerman, 2004; Levinson,

1972, 1976, 1981, 1991; Lowman, 2002; Lubit, 2004). Most definitely, the senior leader, her

follows, and others outside their circle left the organization worse than found. The agency was

established in 1947 and revered as an organization of high integrity, comradeship among its

teams, and excellent in fulfilling its mission. Under the toxic leader’s leadership, the

organization has transformed from one revered to one under high legal scrutiny that may result in

individual and organization level civil and criminal penalty (Frost, 2003). Despite the glowing



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history and reputation to uphold, the organization’s executive director ignored several red flags

(Fox & Spector, 2005). Schein (2010) describes organizational culture as an abstraction, and the

forces created in organizational situations from the culture are powerful. Further, Schein posits

that a lack of understanding of these forces submits the organization as prey (p. 7).

Organizational options allow safeguards to prevent or deter toxic leadership. An open

and transparent process averts corruption (Lubit, 2004). Transparency includes processes for

selection and identification to eliminate individuals with toxic leadership propensities and

histories. The senior leader was handpicked, versus exercising the traditional federal hiring

process, illustrating a predisposition to by-pass rules. Though many followers were aware of the

skirting of this rule, no one acted upon the issue… another red flag. Lipman-Blumen (2005)

recommends the use of tools, e.g. screening assessment, to preclude toxicity. Also, the author

recommends reviews that include all relevant groups with whom the leader interacts. The

federal agency again failed another safeguard. Hence, followers, at all levels, were left without

an indirect venue to address issues. The agency record shows professional development

assessments, such as the 180 and 360-degree assessments (skill, competency, and behavioral gap

tools), were recommended, but not elected to be utilized by the Training Director, who is a direct

report of the female senior leader. Again, the agency made a conscious and deliberate act to

exclude tools for employee productive and safe feedback. These repetitive actions align the

agency with the causative factors of egotism, arrogance, and power-based leadership outlined in

the Trapezoid Model. Again, another red flag ignored. In yet another instance, leadership

purposely evaded vehicle acquisition requirements and purchased a luxury vehicle on a

government credit card. Even without knowing the specifics, other members of the organization

should have questioned this luxury vehicle acquisition versus the standard government sedan.

Lipman-Blumen (2005) additional recommendations for safeguards and structure.

Trust - Employees may allude to a sense of betrayal of trust, when the performance goals

of the organization far outweigh the expectations and welfare of staff (Meyerson, Weick &

Kramer, 1993; Vroom, 2007). The senior leaders placed unbalanced workloads on the

employees, who resisted their unlawful orders (Kellerman, 2004). The conclusion of Mowday

(2006) is that organizations rely more on tools that may erode the trust deposit between

managers and reports. Instead, the case shows that the organization pushed for technology cover-

ups (personal computers and cell phones to nonemployees and family members) and other report

fudging, further degenerating trust. Deutsch (1960, 1962) defines trust as confidence in the

intentions and capabilities of another person and the belief that person will keep his word. Trust

is also viewed as a “social glue” (Fukuyama, 1995) or “social lubricant” (Spreitzer and Mishra,

1999) that can hold diversified, global organizational structures together. Creed and Miles (1996)

opine that many organizations have failed due to a lack of trust amongst partners and staff.

According to Lewicki (et al. 1998), organization members must know not only when to trust

others, also when to monitor others closely. Multiple red flags went up, yet the senior leader was

unchecked. Further, Lewicki avers that the functional coexistence of trust and distrust may be a

central component in high-performance teams (p. 453). More importantly, both trust and distrust

can co-exist within multiplex relations, and individuals experience ambivalence when positive

and negative attitudes toward a single target exist (p. 448). In court documents, whistleblowers

indicated they were the “enemy of the agency.” The whistleblowers complained of quid pro quo

activities among the staff and contract personnel. It appears select followers had identified the

whistleblowers as the single target. However, in court, the agency attempted to cover and deny

its approved actions against the whistleblowers.



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Decision-Making – Expending government funds without authorization, management

interference, and discrimination are indeed questionable decision-making practices. Again, the

question of why remains. Simon’s (1997) theory of administrative behavior provides some

insight. Specifically, Simon’s concepts of bounded rationality or satisficing appear to be in the

forefront in this case, whereas the conceptual ideas of the agency leadership (bias, power,

arrogance) and direct-report followers (insatiable ambition) was limited by the cognitive

limitations of their minds. In other works, Simon states, "boundedly rational agents experience

limits in formulating and solving complex problems and in processing (receiving, storing,

retrieving, transmitting) information" (Williamson, 1991, p. 553). As a deterrent to System 1

(intuitive-biased, quick automatic and emotional) decision-making, Lipman-Blumen (2005)

recommend regularly scheduled accountability forums to prompt pragmatic, effortful, logical and

explicit thinking outcomes relative to System 2 thinking (Bazerman & Moore, 2010; Lipman-

Blumen, 2005). The case record shows that direct-report followers approved acquisitions and

refused to deny the leader any request. The agency had little to no safeguards in place for the

adopted decision process and became the prey of toxic leadership team (Schein, 2010). On the other hand, the organization’s exercise of a rational decision-making model would

effectively optimize outcomes and provided quantifiable information or verifiable alternatives.

Lukes (2005) identifies a two-dimensional view that involves examining both decision-making

and non-decision making, (p. 192). In this case, the record shows that leadership and several

followers elected to utilize System 1 thinking, delay in the decision to stop the behavior, and in

many instances become complicit (Bachrach & Baratz, 1963, p. 632; Bazerman & Moore, 2009).

RECOMMENDATIONS

Change is the ultimate recommendation (Dent & Goldberg, 1999; Senge, 2000). The

agency will need to reverse the direction of the Circumplex Model’s Aggressive/Defensive and

Passive/Defensive styles to Constructive Styles, including rebuilding trust in throughout the

virtual and headquarters offices (Germain, 2011; Senge, 2006). After the series of illegal and

unethical events, Lewicki’s (et al. 1998) purports increasing monitoring is vital. The value-laden

ethics principles of Hickman (2010) incorporated into ongoing professional development would

be essential. Additionally, Trapezoid Model illustrates method(s) available to transform the

current toxic, dysfunctional, and destructive leadership styles and culture to one of an ideal

culture (Bazerman & Moore, 2010; Gelatt, 2005; Kanter, 1973, 1975; Wirth, 2004). Trapezoid

Model also outlines the resource tools structured to assist in the levers of change (Ayoko &

Hartel, 2006; Follett, 2011; French & Raven, 1959, p. 150-167; Kumar, 1999; Parker, 2007).

Change is difficult, but Ford, Ford and D’Amelio (2008) prescribe accepting and labeling

resistance to change to defuse its power (Burnes, 2004; Vroom, 2007).

Conclusion

Redefinition of the problem

This case analysis examines a small federal agency under investigation by several federal

government and law enforcement agencies for gross mismanagement of government funds and

property, as well as fraud, waste, and abuse. The analysis explores whether the behaviors of the



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actors met the criteria for toxic leadership (dysfunctional and destructive leadership) and

rendered the organization and its members prone to ethical misbehavior.

Findings

The RCA allowed factor-producing effects of components to be isolated and examined.

Specifically, the focus was on the organizational culture and leadership styles depicted in the

Circumplex Model, constructs of the causative factors, and the behavioral outcomes from the

data input (court records and case investigations). The analytical seminal review of each

component part indicated that the styles and behaviors were characteristic of toxic, dysfunctional

and destructive, leadership (Kellerman, 2004; Lipman-Bluman, 2005, 2006). In approximately

four years, the leader created an Aggressive/Defensive culture to propel and rotate the direction

of the leadership styles orientation of the agency from a vibrant organization, a Constructive

Style, to a Passive/Defensive Style. The unethical behaviors of the senior leader and direct-

report followers can be plotted on the Circumplex Model under the highest red intensity level of

power, opposition, competitiveness, and perfectionist behavior.

According to the case records, followers and other key leaders turned a blind-eye to the

behavior and ignored glaring red flags to become an equal part of the problem. Additionally, it

appears that the direct-report followers adopted their leader’s behaviors and created a second and

more intense (first line leadership) prong of toxic, destructive and dysfunctional leadership,

thereby shifting their styles to the Aggressive/Defensive cluster of the Circumplex Model

(Kellerman, 2004; Lipman-Bluman, 2004, 2005, 2006).

Organizationally, the theoretical principles espoused by Pacanowsky and O’Donnell-

Trujillo (1983), along with Schein (1999) outline the linkage of the members of the organization

with the behaviors and activities. By default, the organization can be viewed as toxic,

destructive, and dysfunctional. Identifying which causative factors had the most failures and

influence on the organization is rendered for levers of change. The Circumplex Model and the

Trapezoid Model, coupled with the examination of the case content, convey the analytical

processes to associate the sentinel events, behaviors and outcomes to answer the following three

primary questions:

1) What happened? A senior leader, her direct-report followers led an agency down a

path that meets the seven type criteria of toxic leadership identified by Barbara Kellerman

(2004): Incompetent, Rigid, Intemperate, Callous, Corrupt, Insular, and Evil. More importantly,

these public servants wasted public dollars and betrayed the public trust. Compared with each of

the seminal and theoretical constructs of toxic, destructive and dysfunctional leadership, each of

the actors met the construct and the causative factors for the current operative culture.

2) Why did it happen? Lipman-Blumen (2004, 2005, 2006) suggests that it was

psychological. She argues the need for security explains the psychological phenomenon that

allows followers to allow the unethical and human rights conditions (Gelatt, 2005). The

Trapezoid Model highlights the lack of integrity and power as causative factors.

3) What to do to prevent the likelihood it will occur again? The Trapezoid Model

identifies the need for change and levers of change to transition to an ideal culture. Transitioning

to an ideal culture would entail unfreezing the undesired by adding new forces for change and

removal of some of the existing factors. The organization would need to refreeze the new

behaviors until they become the norm. Orlikowsky & Hofman say that “adopting an

improvisational model implies that managers relinquish… ‘command and control’ or “power” (p.

20). Adopting the new model would require a realignment of key leaders and practices.



13

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