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Organizational Culture: Structure and Evolution

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  • Mark Gradstein

Abstract

We present a model of the formation and evolution of organizational culture and its effect on performance. The analysis reveals circumstances under which, because of cultural externalities, excessive polarization or, alternatively, homogeneity may result, indicating inter alia an important role for the performance of managing cultural diversity in organizations. The exhibited framework can be useful in dissecting how different aspects of cultural diversity and the nature of management–workers’ interactions affect organizational functioning (JEL D02, D23, M54, Z13).

Suggested Citation

  • Mark Gradstein, 2025. "Organizational Culture: Structure and Evolution," The Journal of Law, Economics, and Organization, Oxford University Press, vol. 41(3), pages 848-865.
    • Handle: RePEc:oup:jleorg:v:41:y:2025:i:3:p:848-865.
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    File URL: http://hdl.handle.net/10.1093/jleo/ewae008
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    Keywords

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    JEL classification:

    • D02 - Microeconomics - - General - - - Institutions: Design, Formation, Operations, and Impact
    • D23 - Microeconomics - - Production and Organizations - - - Organizational Behavior; Transaction Costs; Property Rights
    • M54 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Personnel Economics - - - Labor Management
    • Z13 - Other Special Topics - - Cultural Economics - - - Economic Sociology; Economic Anthropology; Language; Social and Economic Stratification

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