Papers and Slides
The Close Relationship Between Management Practices and Corporate Culture
Neil Thompson with Donald Sull and Hyo Kang
Abstract: A growing body of literature finds that a healthy corporate culture is associated with superior financial performance. A separate stream of research has found that a firm’s adoption of management “best practices” is correlated with higher efficiency and productivity. To date, the cultural and management practices literatures have proceeded in parallel, with few studies considering the relationship between an organization’s processes and its culture. This paper uses data from a carefully-designed survey of 370 organizations and nearly ten thousand managers to simultaneously measure corporate culture and management practices. Our key finding is that the quality of a company’s management practices and health of its corporate culture are highly correlated. This implies that studies which measure either culture or processes in isolation are likely to overstate their impact on performance. We also provide suggestive evidence that management practices may cause changes in corporate culture, or at least that this effect is stronger than the reverse.
Birds of a Feather…Enforce Social Norms? Interactions among Culture, Norms, and Strategy
Eric Van den Steen with Hongyi Li
Abstract: Does culture eat strategy for breakfast? How should strategists think about this issue, that is often on managers’ minds and that can be critical to execution? This paper first shows how ‘culture as shared beliefs and preferences (or values)’ may cause the emergence of social norms, with people even (endogenously) enforcing norms that go against their own beliefs and preferences/values. The theory implies that a disconnect may develop between the organization’s norms and its underlying beliefs and preferences and that such social norms are more likely in attractive organizations, for behaviors that have modest personal consequences, and in organizations where employees depend on others’ choices to a moderate degree. Building on these insight and on the definition of ‘strategy as core guidance’ we then discuss how culture and strategy interact, with culture being both an input and a substitute or competitor for strategy. The results also throw light on ways to deal with the ‘breakfast’ issue.
Desert Places: Cooperatives as Infrastructure Providers in Marginalized Areas
Aseem Kaul with Hyoju Jeong and Jiao Luo
Abstract: In this study, we examine the comparative advantage of cooperatives relative to for-profit firms in infrastructure provision. We argue that infrastructure projects generate positive local externalities for the communities in which they are located, and that cooperatives, being owned by users within the community, are able to internalize these benefits in a way that for-profits are not. As a result, cooperatives may be willing to provide higher quality infrastructure than for-profits, especially in marginalized communities where the costs of provision are high relative to revenues. We test and find support for this argument in US internet broadband provision from 2014 to 2017, showing that cooperatives are more likely to provide broadband in communities where for-profits offer only low-speed or basic access, with these effects being stronger in rural communities, but weaker in communities with high ethnic fragmentation. Our study thus contributes to a comparative governance view of activities at the intersection of public and private interests, while highlighting the role of cooperatives in providing vital infrastructure to marginalized communities.