Toxic Attitudes spread quickly throughout a department and can become embedded in the culture in a way that eventually impacts performance. The selection of managers should include personality in order to ensure that the organization maintains a positive place to work where people feel free to perform at their best. Entire departments that under perform can often be traced back to leadership and the rewards systems.
Poor attitudes and even worse communication skills lead to toxic environments. We are herd creatures and we take cues from each other. People with power who have negative affectivity beget more negativity as people pick up on their cues and react accordingly. We have all experienced people who "tick" us off and put us in a poor mood.
The problem is that we don't stop the chain. Our mood changes and we impact the next person. Some of us are more emotionally developed and can put people's behavior in context but most of us just transfer it onto the next person. Eventually we can have an entire culture of negativity that impacts performance.
Imagine if you walked into a place everyday and most of the people were engaging in negative thinking. Basic civility and kindness went out the window. Without realizing it you will begin to feel like your "walking on egg shells" within the workplace. The high stress and agitation can cause all types of problems.
Performance declines and cynicism becomes more rampant. Changing the toxicity of an environment requires either a surgical or scorched earth approach. Surgically you can spend the time investigating procedures, reward allocations, employee attitudes and personality to see what specifically is causing the problems. Scorched earth means throwing out the players with big attitudes and changing everything within the department. If you forget to hire better next time or adjust the reward mechanics you might find yourself back with a toxic environment in a few years.