Organizational Dynamics: Culture, Design, and Performance

Timothy Besley and Torsten Persson

No 17382, CEPR Discussion Papers from Centre for Economic Policy Research

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.

Date: 2022-06
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Journal Article: Organizational dynamics: culture, design, and performance (2024)
Working Paper: Organizational dynamics: culture, design, and performance (2024)
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