Culture as a Signal: Evidence from a Natural Field Experiment

57 Pages Posted: 15 May 2023 Last revised: 15 Jun 2023

See all articles by Wei Cai

Wei Cai

Columbia Business School

Dennis Campbell

Harvard University - Accounting & Control Unit

Jiehang Yu

Columbia University - Columbia Business School

Date Written: April 28, 2023

Abstract

The importance of culture as an informal management control system is increasingly acknowledged in academia. While prior research mainly focuses on the value of culture on internal stakeholders (e.g., employees), we examine whether culture serves as a credible signal in building trust with external stakeholders (i.e., customers). We focus on one important aspect of culture, teamwork, and leverage a company’s proprietary data of a natural field experiment that generates exogenous variation in team composition. Each customer is served in an app-based group chat by a randomly assigned team of employees. Our data contains more than 2 million group chat messages and over 16 thousand customers. We find that close teamwork among employees serves as a credible signal in gaining customer trust. Moreover, the effect is more pronounced 1) when the signals are more frequent and 2) when the signals are more intense. The results are robust to controlling various confounding factors and using alternative measures of customer trust. Our findings provide important implications for the value of organizational culture as a signal in building trust with external stakeholders.

Keywords: organizational culture; teamwork; customer trust

Suggested Citation

Cai, Wei and Campbell, Dennis and Yu, Jiehang, Culture as a Signal: Evidence from a Natural Field Experiment (April 28, 2023). Available at SSRN: https://ssrn.com/abstract=4447603 or http://dx.doi.org/10.2139/ssrn.4447603

Wei Cai (Contact Author)

Columbia Business School ( email )

3022 Broadway
New York, NY 10027
United States

Dennis Campbell

Harvard University - Accounting & Control Unit ( email )

Soldiers Field
Boston, MA 02163
United States

Jiehang Yu

Columbia University - Columbia Business School ( email )

3022 Broadway
New York, NY 10027
United States

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