Cultural Inertia and Uniformity in Organizations

Posted: 23 Jun 2008

See all articles by Juan D. Carrillo

Juan D. Carrillo

University of Southern California - Department of Economics; Centre for Economic Policy Research (CEPR)

Denis Gromb

HEC Paris

Multiple version iconThere are 2 versions of this paper

Date Written: October 2007

Abstract

We analyze 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 ex post protects and therefore ex ante encourages culture-specific investments by agents. 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 culture.

Suggested Citation

Carrillo, Juan D. and Gromb, Denis, Cultural Inertia and Uniformity in Organizations (October 2007). The Journal of Law, Economics, & Organization, Vol. 23, Issue 3, pp. 743-771, 2007, Available at SSRN: https://ssrn.com/abstract=1150026 or http://dx.doi.org/10.1093/jleo/ewm021

Juan D. Carrillo (Contact Author)

University of Southern California - Department of Economics ( email )

3022 S. Vermont Ave.
Los Angeles, CA 90089
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Centre for Economic Policy Research (CEPR)

London
United Kingdom

Denis Gromb

HEC Paris

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Jouy-en-Josas Cedex, 78351
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