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Marriott Marquis, Presidio 2
American Economic Association
Building Organizational Culture for Performance
Sunday, Jan. 5, 2020 10:15 AM - 12:15 PM (PDT)
- Chair: Kathryn Shaw, Stanford University
Visible Hands: Governance of Value Creation—In Firms and Beyond
AbstractSince at least Kreps (1990) and even Leibenstein (1969), economics has considered the possibilities that organizational culture might be (1) a cause of persistent performance differences across seemingly similar organizations and (2) an equilibrium built among current organization members, rather than beliefs or values transmitted from parents to children. And there is now a lively theoretical literature, starting with Chassang (2010), exploring how path-dependence could produce steady-state variations in performance within a given equilibrium—across organizations that are not just similar but (in theory) identical. But all of this literature elides a crucial point emphasized by both practitioners and longitudinal observers: parties don’t simply start in an equilibrium; they must build one.
Climate Change and Corporate Purpose
AbstractWe argue that an organization’s capacity to act in the face of morally charged, high uncertainty threats as in the case of climate change is a function of its corporate culture and in particular of its corporate purpose. We draw on data derived from the rapid decarbonization of the European electric utility sector to illustrate our core hypothesis, on a study of a highly purpose driven waste handling company to explore how purpose is built over time, and on detailed data gathered from individual employee surveys to show that, at least in these data, employees working for firms that face lower reputational, brand, and customer risks due to climate change report higher levels of purpose. We close by suggesting that corporate purpose may play an important role in shaping firms’ responses to major strategic threats and explore the links between our analysis and the possibility that slow to construct relational contracts may be a critical source of competitive advantage.
Measuring Corporate Culture Through Communication Data
AbstractWe investigate a new empirical approach to measure differences in corporate culture across large samples of firms. The methodology exploits detailed (and completely confidential) metrics on internal email communications and in-person and virtual meetings to compute basic network metrics at the firm and the department level. The paper discusses the preliminary evidence on cross-firm variation in communication structures emerging from the data, as well as the relationship between these metrics and other firm-level characteristics. We conclude with a brief discussion of the benefits and challenges posed by this empirical approach for the measurement of culture in large samples.
- D2 - Production and Organizations