Corporate Culture and Organizational Fragility
Pre-print, Working paper: Complex organizations accomplish tasks through many steps of collaboration among workers. Corporate culture supports collaborations by establishing norms and reducing misunderstandings. Because a strong corporate culture relies on costly, voluntary investments by many workers, we model it as an organizational public good, subject to standard free-riding problems, which become severe in large organizations. Our main finding is that voluntary contributions to culture can nevertheless be sustained, because an organization’s equilibrium productivity is endogenously highly sensitive to individual contributions. However, the completion of complex tasks is then necessarily fragile to small shocks that damage the organization’s culture.
Author(s)
Matthew Elliott, Benjamin Golub, Mathieu V Leduc
Date of publication
- 2023
Keywords
- Corporate Culture
- Networks
- Fragility
Internal reference
- PSE Working Papers n°2023-04
Pages
- 13 p.
URL of the HAL notice
Version
- 1