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Cultural Inertia and Uniformity in Organizations

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  • Denis Gromb

Abstract

We analyse aspects of the structure of organizational culture. We show that old and culturally uniform organizations are prone to cultural inertia; that is they are reluctant to adopt a different culture in response to a change in the environment. Cultural uniformity can be beneficial because the associated inertia protects and therefore encourages culture-specific investments by agents within the organization. We also explore the model’s implications for such issues as cultural uniformity within an organization, cultural heterogeneity across organizations, the destabilizing effect of growth and mergers, and the conflicts arising in the management of organizational culture.

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Bibliographic Info

Article provided by Oxford University Press in its journal The Journal of Law, Economics, & Organization.

Volume (Year): 23 (2007)
Issue (Month): 3 (October)
Pages: 743-771

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Handle: RePEc:oup:jleorg:v:23:y:2007:i:3:p:743-771

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Cited by:
  1. Ito, Satoshi & Fujimura, Shuzo & Tamiya, Toshihiko, 2012. "Does cultural assimilation affect organizational decision-making on quality-related incidents? — A company's post-M&A experience," Journal of International Management, Elsevier, vol. 18(2), pages 160-179.
  2. HIROTA Shinichi & KUBO Katsuyuki & MIYAJIMA Hideaki, 2007. "Does Corporate Culture Matter? An Empirical Study on Japanese Firms," Discussion papers 07030, Research Institute of Economy, Trade and Industry (RIETI).
  3. Mikel Berdud & Juan M. Cabasés Hita & Jorge Nieto, 2014. "A Pilot Inquiry on Incentives and Intrinsic Motivation in Health Care: the Motivational Capital Explained by Doctors," Documentos de Trabajo - Lan Gaiak Departamento de Economía - Universidad Pública de Navarra 1401, Departamento de Economía - Universidad Pública de Navarra.
  4. Costa, Dora L. & Kahn, Matthew E., 2006. "Forging a New Identity: The Costs and Benefits of Diversity in Civil War Combat Units for Black Slaves and Freemen," The Journal of Economic History, Cambridge University Press, vol. 66(04), pages 936-962, December.
  5. Mikel Berdud & Juan M. Cabasés & Jorge Nieto, 2012. "Incentives Beyond the Money: Identity and Motivational Capital in Public Organizations," Documentos de Trabajo - Lan Gaiak Departamento de Economía - Universidad Pública de Navarra 1214, Departamento de Economía - Universidad Pública de Navarra.
  6. Erkki Siivonen & Arto Luoma & Jani Luoto, 2003. "Growth, Institutions and Productivity: An empirical analysis using the Bayesian approach," Research Reports 104, Government Institute for Economic Research Finland (VATT).
  7. Sandra Silva & Jorge Valente & Aurora Teixeira, 2012. "An evolutionary model of industry dynamics and firms’ institutional behavior with job search, bargaining and matching," Journal of Economic Interaction and Coordination, Springer, vol. 7(1), pages 23-61, May.
  8. Mikel Berdud & Juan M. Cabasés Hita & Jorge Nieto, 2014. "Motivational Capital and Incentives in Health Care Organizations," Documentos de Trabajo - Lan Gaiak Departamento de Economía - Universidad Pública de Navarra 1403, Departamento de Economía - Universidad Pública de Navarra.
  9. Sandra Tavares Silva & Aurora A.C. Teixeira, 2006. "An evolutionary model of firms' institutional behavior focusing on labor decisions," FEP Working Papers 227, Universidade do Porto, Faculdade de Economia do Porto.
  10. Ruckes, Martin & Rønde, Thomas, 2010. "Dynamic incentives in organizations: Success and inertia," Working Paper Series in Economics 7, Karlsruhe Institute of Technology (KIT), Department of Economics and Business Engineering.

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