Document Type
Article
Publication Date
Fall 2022
Publisher
John Wiley & Sons Ltd
Abstract
Culture is given credit for some of the greatest business successes and blamed for some of the biggest failures. Policymakers often point to dysfunctional corporate culture in banking as a first-order contributor to the recent financial crisis.1 Several books identify culture as a key driver of Google's success.2
The corporate culture at VW, Toshiba, and Wells Fargo are recent examples of failures.3Though corporate culture is a very popular topic, many fundamental research questions remain open. In this paper, we attempt to provide answers to the following questions:
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What is corporate culture?
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How important is corporate culture?
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What mechanisms underlie the creation and effectiveness of corporate culture?4 How do other formal institutions (e.g., governance or compensation) reinforce or work against culture?
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Do companies think their culture is effective and if not, what deters firms from having an effective corporate culture?
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Are the upside benefits of an effective culture greater than the downside costs of ineffective culture?
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What aspects of business performance does corporate culture affect? Does culture impact firm value, productivity, corporate risk-taking, growth, M&A, financial and tax reporting, whether employees take a long-run view, and/or corporate ethics?
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How can corporate culture be measured?
Recommended Citation
Graham, J. R., Grennan, J. A., Harvey, C. R., & Rajgopal, S. (2022). Corporate culture: The interview evidence. Journal of Applied Corporate Finance, 34(4), 22–41. https://doi.org/10.1111/jacf.12528
Comments
© 2023 The Authors. Journal of Applied Corporate Finance published by Wiley Periodicals LLC on behalf of Cantillon & Mann.
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