The term "demoralize" is often used in military, sports, and business settings where there are competitors. In the military, an army unit or entire military outfit can become demoralized if the enemy's superiority overpowers them. In 1990, the United States and its allies overpowered the Iraqi military in Operation Desert Storm, achieving their objective of liberating Kuwait in just five weeks, demoralizing the enemy.
In business, the term often refers to the demoralization of employees by bosses, coworkers, or customers. In any business relationship, there is a competition to achieve one's goals. Coworkers compete against one another for promotions and raises. Bosses and employees compete against one another to meet objectives with limited resources. Customers hope to get products for the least amount of money.
The relationship between boss and employee can often be demoralizing, especially if there are conflicting objectives. An employee would like challenging, exciting projects that would enhance his or her career. A boss's objective is to assign projects to those that would best perform them. Employees who do not get choice assignments might feel demoralized. In addition, if a boss feels threatened, perhaps believing an employee might not perform a job to expectations, the boss might micromanage or simply do the job himself, demoralizing the employee.
Oftentimes, the company's top management can demoralize employees without knowing it. For example, a reorganization without consulting employees can be devastating to employees beliefs in the importance of their careers. In addition, paying lip service to employee morale, but never acting on it can demoralize employees. For example, if a company administers an employee survey, not only should they publish the results, they should also act on it.