Here's an interesting inside look at how an embassy works (or doesn't) from Diplopundit. It's a discussion of the Peruvian embassy's inspection report. There are two takeaways:
First, an ambassador's management style really matters. The previous ambassador (unnamed but Wikipedia can tell you quicly it is Rose Likins).
For example, many mission staff reported that the former Ambassador occasionally criticized and belittled certain section chiefs and agency heads in front of their peers. Onerous and excessive paperwork processes impeded communication. The amount of time and energy required to move memoranda through the front office, as well as insistence on letter-perfect products—even for materials intended solely for internal use—discouraged initiative and information sharing.
Anyone who works in an office (including academia) can relate to this. Ambassadors are nominated according to criteria--connections to the president especially--that have nothing at all to do with leadership and management skills. I don't think anyone has done work on that topic, but backstabbing (or "frontstabbing" in this case!) can have an impact on relations with the government.
Second, not confirming an ambassador, which is currently the case for Peru, creates a vacuum.
Initially, the chargé and acting DCM adopted caretaker roles in anticipation of the Ambassador-designate’s quick arrival. Neither of them felt empowered to make significant changes, nor did they want to adopt changes only to make additional ones or reverse others after the new Ambassador’s arrival. By November 2013, they realized their new leadership duties would extend for an indeterminate period.
Several months went by before the embassy staff even knew what would happen, so things came to standstill. Even after the realization that the Senate wasn't going to do much of anything, the interim leaders can keep things going but it takes the authority of an ambassador to make substantive changes.
The post ends on a scathing note.
Probably the most impressive item in this report is that the previous ambassador departed post reportedly in September 2013 and four months later during the IG inspection, her ghost still haunted embassy operation. Since she’s not even named in this report, there is no danger that this OIG report would merit a mention in her Certificate of Competency the next time she is nominated for a chief of mission position.
Oh, you think things will get better?
According to the GAO, the OIG is supposed to inspect each overseas post once every 5 years; however, due to resource constraints, the OIG Office of Inspections has not done so. Thanks Congress! The OIG Office of Inspections has conducted inspections in an average of 24 countries per year (including all constituent posts within each country) in fiscal years 2010 through 2013. Given their limited resources, according to OIG officials, they have prioritized higher-risk posts — which probably means more NEA, SCA, AF and less EAP, EUR, WHA post inspections.
This is the sort of insight that Congress should pay attention to, and the Senate in particular when it sits on nominations. But they won't.