It's been a while since I mused on culture here. I've been waiting to see whether policy makers and regulators would come up with any good ideas beyond a lot of handwaving about how important it is. Or even any bad ideas, like trying to measure it or prescribe it.
Today I came across an interesting paper on the subject, the first I've found that attempts to examine culture empirically beyond anecdote.
The authors conclude:
"While economists are increasingly aware of the importance of corporate culture..... limited
empirical work exists on the topic, in part because it is difficult to measure. Before we started
this project, we thought culture might be too amorphous to quantify. Then in interviews with
CEOs and CFOs, we heard loudly and repeatedly, how important culture is, especially from CFOs
who are typically the numbers people and among those one might expect to be suspicious of hard-to-quantify
aspects of the business environment. We believe that our paper conveys a powerful
message that corporate culture does matter, a lot. We are aware that our study is just a first cut at
this very difficult but important problem. We also fully realize that causal inference is not possible. Nevertheless, we believe the magnitude of the topic means it deserves substantial research going
forward and we hope our paper helps build a bridge to enable such future work."
To my surprise, at first reading there are a number of things that I like about this paper. I like the model in figure 1 which links culture with formal mechanisms. I like the fact that the authors started with some interviews. I like the fact that they have included the survey instrument and I like the penultimate sentence in the paragraph quoted above. I need to read the paper again to see if I find their interpretation of the stats convincing. And I need to ponder a bit on their definition of effective culture. But the paper deserves wide circulation and could prompt some interesting discussion. And it would be good to see it replicated in a UK and European context.
