Cultural Inertia and Uniformity in Organizations

31 Pages Posted: 23 Apr 2003

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 2002

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.

Keywords: Culture in organizations, inertia, screening, uniformity, diversification

JEL Classification: L20

Suggested Citation

Carrillo, Juan D. and Gromb, Denis, Cultural Inertia and Uniformity in Organizations (October 2002). Available at SSRN: https://ssrn.com/abstract=356401

Juan D. Carrillo (Contact Author)

University of Southern California - Department of Economics ( email )

3022 S. Vermont Ave.
Los Angeles, CA 90089
United States
213-740-3526 (Phone)
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Centre for Economic Policy Research (CEPR)

London
United Kingdom

Denis Gromb

HEC Paris

1 rue de la Liberation
Jouy-en-Josas Cedex, 78351
France

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