How Important is Culture? A Second Look at Keller Williams Realty

8 Pages Posted: 20 Apr 2016 Last revised: 26 Apr 2016

See all articles by David F. Larcker

David F. Larcker

Stanford University - Graduate School of Business

Brian Tayan

Stanford University - Graduate School of Business

Date Written: April 21, 2016

Abstract

Keller Williams is one of the most successful real estate franchises in the world. The leaders of the company attribute its growth in large part to a cultural model that emphasizes profit sharing, interdependence, and success through the efforts of others. However, in general, the impact of culture on performance remains an open question. We conducted a large-scale survey of Keller Williams team members to understand how associates of Keller Williams view the company’s culture and whether perceptions of culture are associated with performance. We find evidence of an exceptionally strong and unique culture. We review our findings in detail and ask:

We ask:

• Does a company with a strong business model perform better if it also has a strong culture? • How important is it that associates feel their company “cares” about them? • What role does leadership play in shaping culture? What role does the average associate play? • Are there costs to having a strong culture?

The Stanford Closer Look series is a collection of short case studies through which we explore topics, issues, and controversies in corporate governance and executive leadership. In each study, we take a targeted look at a specific issue that is relevant to the current debate on governance and explain why it is so important. Larcker and Tayan are co-authors of the books Corporate Governance Matters and A Real Look at Real World Corporate Governance.

Keywords: : Corporate Governance, Culture, Organizational Culture, Compensation, Profit Sharing, Open Books Policy, Employee Satisfaction, Leadership, Real Estate

JEL Classification: G3, G31, G34, D21, D23, M14

Suggested Citation

Larcker, David F. and Tayan, Brian, How Important is Culture? A Second Look at Keller Williams Realty (April 21, 2016). Rock Center for Corporate Governance at Stanford University Closer Look Series: Topics, Issues and Controversies in Corporate Governance No. CGRP-55; Stanford University Graduate School of Business Research Paper No. 16-21. Available at SSRN: https://ssrn.com/abstract=2767180

David F. Larcker (Contact Author)

Stanford University - Graduate School of Business ( email )

Graduate School of Business
518 Memorial Way
Stanford, CA 94305-5015
United States
650-725-6159 (Phone)

Brian Tayan

Stanford University - Graduate School of Business ( email )

655 Knight Way
Stanford, CA 94305-5015
United States

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