Corporate Culture: Evidence from the Field

79 Pages Posted: 20 Mar 2017 Last revised: 16 Dec 2022

See all articles by John R. Graham

John R. Graham

Duke University; National Bureau of Economic Research (NBER)

Campbell R. Harvey

Duke University - Fuqua School of Business; National Bureau of Economic Research (NBER)

Jillian Grennan

Santa Clara University, Leavey School of Business; Santa Clara University School of Law; University of California, Berkeley, Haas School of Business, Institue for Business and Social Impact

Shivaram Rajgopal

Columbia University - Columbia Business School, Accounting, Business Law & Taxation

Multiple version iconThere are 2 versions of this paper

Date Written: March 2017

Abstract

Does corporate culture matter? Can differences in corporate culture explain why similar firms diverge with one succeeding and the other failing? To answer these questions, we use a novel survey and interview-based analysis of 1,348 North American firms. Over half of senior executives believe that corporate culture is a top-three driver of firm value and 92% believe that improving their culture would increase their firm's value. Surprisingly, only 16% believe their culture is where it should be. Executives link culture to ethical choices (compliance, short-termism), innovation (creativity, taking appropriate risk), and value creation (productivity, acquisition premia). We assess these links within a framework that implies cultural effectiveness depends on interactions between cultural values, norms, and formal institutions. Our evidence suggests that cultural norms are as important as stated values in achieving success.

Suggested Citation

Graham, John Robert and Harvey, Campbell R. and Grennan, Jillian and Rajgopal, Shivaram, Corporate Culture: Evidence from the Field (March 2017). NBER Working Paper No. w23255, Available at SSRN: https://ssrn.com/abstract=2937525

John Robert Graham (Contact Author)

Duke University ( email )

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National Bureau of Economic Research (NBER)

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Campbell R. Harvey

Duke University - Fuqua School of Business ( email )

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HOME PAGE: http://www.duke.edu/~charvey

National Bureau of Economic Research (NBER)

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Jillian Grennan

Santa Clara University, Leavey School of Business ( email )

Santa Clara, CA 95053
United States

Santa Clara University School of Law ( email )

500 El Camino Real
Santa Clara, CA 95053
United States

University of California, Berkeley, Haas School of Business, Institue for Business and Social Impact

Berkeley, CA 94720
United States

Shivaram Rajgopal

Columbia University - Columbia Business School, Accounting, Business Law & Taxation ( email )

3022 Broadway
New York, NY 10027
United States

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