Organizational dynamics: culture, design, and performance

Timothy Besley and Torsten Persson

The Journal of Law, Economics, and Organization, 2024, vol. 40, issue 2, 394-415

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 (JEL L23, M14).

Date: 2024
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Working Paper: Organizational dynamics: culture, design, and performance (2024)
Working Paper: Organizational Dynamics: Culture, Design, and Performance (2022)
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