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Causal and corrective organisational culture: a systematic review of case studies of institutional failure

Julie Hald, Alex Gillespie and Tom W. Reader

LSE Research Online Documents on Economics from London School of Economics and Political Science, LSE Library

Abstract: Organisational culture is assumed to be a key factor in large-scale and avoidable institutional failures (e.g. accidents, corruption). Whilst models such as “ethical culture” and “safety culture” have been used to explain such failures, minimal research has investigated their ability to do so, and a single and unified model of the role of culture in institutional failures is lacking. To address this, we systematically identified case study articles investigating the relationship between culture and institutional failures relating to ethics and risk management (n = 74). A content analysis of the cultural factors leading to failures found 23 common factors and a common sequential pattern. First, culture is described as causing practices that develop into institutional failure (e.g. poor prioritisation, ineffective management, inadequate training). Second, and usually sequentially related to causal culture, culture is also used to describe the problems of correction: how people, in most cases, had the opportunity to correct a problem and avert failure, but did not take appropriate action (e.g. listening and responding to employee concerns). It was established that most of the cultural factors identified in the case studies were consistent with survey-based models of safety culture and ethical culture. Failures of safety and ethics also largely involve the same causal and corrective factors of culture, although some aspects of culture more frequently precede certain outcome types (e.g. management not listening to warnings more commonly precedes a loss of human life). We propose that the distinction between causal and corrective culture can form the basis of a unified (combining both ethical and safety culture literatures) and generalisable model of organisational failure.

Keywords: institutional failure; organisational disaster; organisational culture; safety culture; ethical culture; case study research; listening; AKO Corporate Culture PhD Scholarship; Springer (search for similar items in EconPapers)
JEL-codes: J50 (search for similar items in EconPapers)
Pages: 27 pages
Date: 2021-11-01
New Economics Papers: this item is included in nep-cul
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Published in Journal of Business Ethics, 1, November, 2021, 174(2), pp. 457 - 483. ISSN: 0167-4544

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