Thomas Jefferson once said "Great innovations should not be forced on slender majorities." That is a great rule of government, but also a good maxim for business. Business units do not owe their existence to the majority will of the people, yet the reality is that employee good will is the oil that makes the massive machinery of most corporations work. If a majority of employees do not support management initiatives, trouble is around the curve.
Remove most of the good will and the organization has trouble functioning efficiently. Build on the good will and the organization responds with greater efforts and improved morale. Smart companies understand this. Arrogant companies while they may mouth the words of customer satisfaction and the importance of their human capital have no real commitment to either concept. The idea that treating customers or employees well can have a very positive on their business growth is actually something they really don't believe. Customers and employees are for exploitation. As one arrogant manager once told me, customers do not know what to buy, our job is to tell them what to buy. At some point, executive arrogance defines the way employees are treated will eventually negatively impact the way in which customers are treated.
While a tough job market may shield an arrogant employer that treats employees like chattels, eventually the reservoir of ill-will will prevent the business from reaching its true potential. Companies that depend on repeat customers will over time be crushed if customers are not properly treated. No product can be good enough to make customer ignore poor service. A company that is difficult to do business with on a regular basis will not be one of the great companies that are long remembered.
Business decisions made without the approval of the vast majority of employees often face a huge uphill battle. Smart management teams build approval for tough decisions before implementing them. Organizations with the view that employees are easily replaced and of little long term value often make capricious decisions relating to customers and employees. This tends to drive larger and larger wedges between line employees and upper management. Unfortunately the board of directors in situations such as this are never independent so the situation festers until the condition of the company becomes critical. Interestingly companies with this type of organizational structure are at their worst when they are doing well. Their arrogance feeds on their success. Eventually they miss a step and disaster follows.
The consequence over time of ineffective management is that respect is lost for upper management and highly motivated employees who have the potential to be very successful, end up treading water in their jobs until they find something better. My bet is that some good research would turn up a strong correlation between the number of long term employees, customer satisfaction, and long term success of companies.
Respect for management once lost is hard to regain. Just as customer satisfaction is fragile commodity so is the good will that needs to exsist between employee and employer. Show me a company that treats its employees poorly, and I'll show you an organization destined for a flame-out no matter how good their products are.