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| Author: | Carrillo, J. D. Gromb, D. |
| Title: | On the strength of corporate cultures |
| Journal: | European Economic Review
1999 : APR, VOL. 43:4-6, p. 1021-1037 |
| Index terms: | CORPORATE CULTURE INCENTIVES MODELS |
| Language: | eng |
| Abstract: | There are corporate culture(s) modeled as production technologies for which employees have to undertake culture-specific investments that improve their effectiveness. At a later date, the organization can adopt cultural changes that make this investment partially redundant. This leads to under-investment. However, as agents invest more, the organization's opportunity cost of a change increases, which in turn increases each agents' incentives to invest. This externality among agents leads to multiple equilibria. Also explored are some implications for the nature and and management of corporate culture. |
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