The frequency with which profanity is used in the office, both in the hallways and in business meetings, seems to vary by industry, by company and by individual department. At my current company, it's pretty common, enough so that even the people who pretty clearly don't naturally use it in business conversation often seem to feel obliged to work 'fucking' into any particularly strong statement of affairs in order to show they're serious.
Of course, much of what we call profanity in our current culture is not actually "swearing" in the sense of taking oaths or invoking the sacred. While Shakespeare's Henry V exclaimed 'God's Blood!' when things seemed a bit much, today's leaders mostly invoke sex and the body's waste management systems. (I suppose one could argue this is a barometer of what we actually hold sacred in our culture.)
But I'm not actually here to discuss the morality of using 'bad language', but rather the effect it has on interactions. A meeting I was dealing with got testy the other day, and there were numerous exclamations of 'Are you fucking kidding me?' and 'What is this shit?' And as people vented their frustrations at each other, you could see people becoming more defensive and angry in their body language.
One of the things that we learned in acting class back in college was that you could develop an emotion on stage by putting yourself through the motions which a person experiencing that emotion might use. Motion can create emotion. Pound the table and shout, and you'll start to feel anger to carry you through the rest of the scene.
As a parent, I've learned the flip side of this lesson: let yourself use motions which express your anger or frustration, and you'll become angrier. If the children are misbehaving and I yell at them, if I'm scooping toys off the floor and I allow myself to throw the toys with that satisfying crash into the place where they should have been in the first place, those actions make feelings of anger roil up far more than they had before.
Even in a workplace where profanity is utterly common, having it used on you tends to make you angry. Though profanity has been voided of much of its underlying meaning, it still puts up automatic defensive feelings, just like being yelled at (another office habit which quickly turns interactions more hostile.) "What the fuck were you thinking?" gets a worse reaction than "I don't think your idea will work," even in a workplace where the use of 'fuck' is constant.
Not all swearing is equal in this sense. It's specifically swearing at people or their ideas which causes situations to escalate. But the way in which it ratchets up conflict and emotion makes it a good idea (any moral or aesthetic concerns aside) to cut out the swearing in situations where you're trying to persuade people to agree and get things done.