Working Paper: CEPR ID: DP17382
Authors: Tim Besley; Torsten Persson
Abstract: We examine the two-way interplay between organizational cultures and organizational design, where culture is modeled as the prevailing social identities among workplace groups that can affect project choices. In a setting where cultural dynamics depend on the expected relative payoffs of holding different identities, we investigate how tribalism and charismatic leadership shape organizational dynamics and steady-state cultures. We show how a strong culture can be a virtue when it permits greater delegated authority, but a vice when the culture is poorly aligned with organizational objectives. We apply our analysis to concrete debates about the interaction of design, performance and culture.
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JEL Codes: No JEL codes provided
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| organizational culture (M14) | organizational design (L23) |
| organizational culture (M14) | organizational performance (L25) |
| strong culture (M14) | decentralized decision-making (D70) |
| strong culture (M14) | performance in stable environments (P17) |
| strong culture (M14) | hinder adaptability (L15) |
| cultural dynamics (Z10) | divergent organizational outcomes (L29) |
| strong tribal identities (Z13) | monoculture (L12) |
| charismatic leaders (M54) | influence managerial motivations (M54) |
| managerial motivations (M54) | align actions with organizational goals (L21) |
| lack of commitment from leaders (D73) | suboptimal cultural outcomes (Z10) |
| short-term performance priorities (L21) | culture that does not maximize performance (D29) |