Corporate Culture: Evidence from the Field
116 Pages Posted: 9 Jul 2016 Last revised: 17 May 2021
Date Written: May 17, 2021
Ninety-two percent of the 1,348 North American executives we survey believe that improving corporate culture would increase firm value. A striking 84% believe their firm needs to improve its culture. But how can that be achieved? Our paper provides some guidance. First, executives directly link culture to financial value. Second, we detail the important distinction between stated cultural values and what actually happens within the firm (norms). Third, we study the specific mechanisms and provide evidence that links culture to ethical choices (compliance, short-termism), innovation (creativity, risk-taking), and value creation (productivity, mergers and acquisitions).
See our related paper: Corporate Culture: The Interview Evidence.
Keywords: Corporate Culture, Values, Norms, Leadership, Corporate Governance, Incentive Compensation, Informal Institutions, Intangible Assets, Valuation, Finance, Risk-taking, Short-termism, Myopia, Innovation, Firm Value, Productivity, M&A valuation, Integrity, Trust, Ethics, Compliance, Earnings Management
JEL Classification: G3, Z1, D23, G23, G30, K22, M14, O16
Suggested Citation: Suggested Citation