Organizational Culture: Structure and Evolution

Mark Gradstein

The Journal of Law, Economics, and Organization, 2025, vol. 41, issue 3, 848-865

Abstract: We present a model of the formation and evolution of organizational culture and its effect on performance. The analysis reveals circumstances under which, because of cultural externalities, excessive polarization or, alternatively, homogeneity may result, indicating inter alia an important role for the performance of managing cultural diversity in organizations. The exhibited framework can be useful in dissecting how different aspects of cultural diversity and the nature of management–workers’ interactions affect organizational functioning (JEL D02, D23, M54, Z13).

Keywords: organizational culture; social interactions; cultural diversity (search for similar items in EconPapers)
Date: 2025
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