Corporate culture: Evidence from the field

John R. Graham, Jillian Grennan, Campbell R. Harvey and Shivaram Rajgopal

Journal of Financial Economics, 2022, vol. 146, issue 2, 552-593

Abstract: Ninety-two percent of the 1348 North American executives we survey believe that improving corporate culture would increase firm value. A striking 84% believe their company needs to improve its culture. But how can that be achieved? Our paper provides some guidance by documenting the following: executives’ views on what corporate culture is and how it operates, distinguishing between stated values and everyday norms; the extent to which culture is perceived to influence value creation (productivity, mergers), ethical choices (compliance, short-termism), and innovation (creativity, risk-taking); and a list of obstacles that can prevent culture from being where it should be (inattentive leaders, misaligned incentive compensation). Finally, we provide evidence that the executives’ survey responses are consistent with external data.

Keywords: Corporate culture; Values; Norms; Leadership; Corporate governance; Incentive compensation; Informal institutions; Intangible assets; Risk-taking; Myopia; Innovation; Firm value; Productivity; M&A valuation; Integrity; Trust; Ethics; Compliance; Earnings management; Intrinsic motivation (search for similar items in EconPapers)
JEL-codes: D23 G23 G30 K22 M14 M41 O16 (search for similar items in EconPapers)
Date: 2022
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (10)

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Working Paper: Corporate Culture: Evidence from the Field (2017)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:jfinec:v:146:y:2022:i:2:p:552-593

DOI: 10.1016/j.jfineco.2022.07.008

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