Is there a link between corporate culture and profit?

Pablo Cardona and Carlos Rey

Chapter 1 in Management by Missions, 2008, pp 3-21 from Palgrave Macmillan

Abstract: Abstract In his well-known book The Human Equation,1 Jeffrey Pfeffer demonstrates, with numbers and logic, that companies can earn much higher profits (more than 30 percent higher) if they adopt management practices that increase people’s commitment and competence. This claim seems to hold true for different types of industries (from steel to semiconductors), for a wide variety of companies (from manufacturing to services), and for diverse business strategies across the cost-differentiation spectrum. As Arie de Geus illustrates in an article, “The Living Company,”2 firms that have survived for more than a century acquire certain common characteristics, which are precisely the ones that have enabled them to adapt to major, even radical, changes in the political, social, and economic environment. One of those characteristics is the ability to build a community of managers and employees who are committed to the company as a long-term venture.

Keywords: High Profit; Corporate Culture; Strong Culture; Opportunistic Strategy; Culture Strength (search for similar items in EconPapers)
Date: 2008
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Persistent link: https://EconPapers.repec.org/RePEc:pal:palchp:978-0-230-59894-2_1

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DOI: 10.1057/9780230598942_1

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