How Corporate Cultures Coevolve with the Business Environment: The Case of Firm Growth Crises and Industry Evolution

Christian Cordes, Peter J. Richerson and Georg Schwesinger
Additional contact information
Peter J. Richerson: DESP - UC Davis - Department of Environmental Science and Policy [Univ California Davis] - UC Davis - University of California [Davis] - UC - University of California
Georg Schwesinger: Max Planck Institute of Economics - Max-Planck-Gesellschaft

Post-Print from HAL

Abstract: This paper shows how cognitive human dispositions that take effect at the level of an individual firm's corporate culture have repercussions on an industry's evolution. In our theory, the latter is attributable to evolving corporate cultures coupled with changes in a firm's business environment. With the help of a formal model of evolving corporate cultures, we demonstrate how firms can establish a cooperative cultural regime that yields competitive advantages in an innovative, fast changing environment. Depending on within-firm social learning processes and cognitive constraints of human agents, organizations then reach a critical cognitive firm size in their development beyond which the level of cooperation deteriorates rapidly-they systematically face a growth crisis. Organizations successful in such an environment and reaching a critical technological size may, however, reap economies of scale in a later, mature and stable business environment with altered corporate culture. Furthermore, we relate these findings to empirical evidence on firm survival and performance in different industries, the evolution of organizational structures, and technological advancements in production technologies, and we identify some determinants of market structures.

Keywords: Industry Evolution-Critical Firm Size-Firm Growth-Corporate Culture-Human Cognition; D21; L10; M13; M14; C61 (search for similar items in EconPapers)
Date: 2010-11-30
Note: View the original document on HAL open archive server: https://hal.science/hal-00911833v1
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (19)

Published in Journal of Economic Behavior and Organization, 2010, 76 (3), pp.465. ⟨10.1016/j.jebo.2010.09.010⟩

Downloads: (external link)
https://hal.science/hal-00911833v1/document (application/pdf)

Related works:
Journal Article: How corporate cultures coevolve with the business environment: The case of firm growth crises and industry evolution (2010)
Working Paper: How Corporate Cultures Coevolve with the Business Environment: The Case of Firm Growth Crises and Industry Evolution (2009)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:hal:journl:hal-00911833

DOI: 10.1016/j.jebo.2010.09.010

Access Statistics for this paper

More papers in Post-Print from HAL
Bibliographic data for series maintained by CCSD ().