Does Corporate Culture Matter for Firm Policies?

Journal of Evolutionary Economics, 2013

In infant industries, a great share of new market opportunities is depleted by firms that spinoff from incumbents. A model emphasizing the relation between incumbents' evolving corporate cultures and the generation of spinoffs explains this regularity in industry evolution. Organizations reach a critical size that entails the collapse of a cooperative culture and triggers the exodus of personnel founding own firms. Thereby, organizations with a cooperative culture active in a dynamic business environment provide ideal training grounds for potential founders. We relate our findings to empirical evidence on developmental patterns in industries, such as genealogies and performance of spinoffs.

SSRN Electronic Journal, 2008

Corporate culture does matter. Using data on mission statements of large Japanese firms, we show that corporate culture has a significant impact on corporate policies that determine employment, board, and financial structures. We provide evidence that strong-culture firms are more likely to retain incumbent employees, promote managers from within firms, and have less debt and a higher percentage of interlocking shareholdings than weak-culture firms. This evidence suggests that strong-culture firms consider their culture to be organizational capital and adopt policies to preserve it. We also confirm that culture and its embedding contribute to better corporate performance. We find these culture effects to be considerable in magnitude and at least as large as those of other factors, and assert that the role of culture must be taken into account in order to understand corporate policies and performance.

SSRN Electronic Journal, 2000

We examine why corporate governance varies widely across countries and across firms, and why such variation matters. Using a new database from Governance Metrics International on corporate governance practices across a large number of countries and firms for 2006-2011 and employing a hierarchical linear model specification, we find that the national cultural dimension of individualism is positively associated with, whereas the national cultural dimension of uncertainty avoidance is negatively associated with, firmlevel corporate governance practices. Within countries, there is a positive association between firm-level corporate governance practices and firm value; however, across countries, the association is negative or zero.

2007

Corporate culture does matter. Using Japanese firms' data from 1987-2000, we have shown that the strength of corporate culture significantly affects corporate policies such as employment policy, management structure, and financial structure. We have also confirmed that the culture and its embedding contribute to better corporate performance.

Kwara State University Malete Nigeria, 2019

The paper reviews some past and recent studies on corporate governance and corporate culture of firms we focus on developed countries, emergent economy, and developing countries; using conceptual analysis from various literatures and theories. It was concluded that across the

This paper investigates the wealth effects of 239 spin-off announcements that took place between January 2000 and December 2009 in the USA and Europe. First, we explore the shortterm stock price behavior of firms announcing a spin-off. We also analyze whether industrial and geographical diversification creates wealth effects for firms deciding to detach business activities. In a second stage, the operating performance of parent firms and their subsidiaries is investigated in the pre-and post-spin-off period. The results reveal a strong positive market reaction of 3.47% on the spin-off announcement date. However, the share price reaction differs when US and European spin-off deals are considered. The US spin-offs seem to send stronger signals to the market compared with the European spin-offs. Consistent with previous studies, we find that firms disposing unrelated businesses (industrial focus) reap significant abnormal returns. On the other hand, geographical focus seems to convey neutral signal to the market producing insignificant abnormal returns. The operating performance dramatically deteriorates in the post spin-off period for parent firms. Unlike to US parent firms, European parents increase the level of capital expenditure in the year of the spin-off and the subsequent years. Regression analysis confirms that industrial focus, relative size and operating performance play significant role in explaining abnormal returns at the announcement date.

SSRN Electronic Journal, 1999

notes, at points, the discussion in Arrow's (1974) book on organizations contains ideas that clearly foreshadow what would later be called corporate culture. Hodgson (1996) suggests that the "old" (pre-Coase, 1937, and Williamson, 1975) institutional tradition in economics (e.g., the work of Thorstein Veblen) could also be seen as sympathetic to current notions of corporate culture. corporate culture by shedding light on specific facets of corporate culture that are less amenable to analysis by other social sciences. This chapter begins by reviewing, synthesizing, and commenting on earlier work by economists on corporate culture, with particular attention spent on Kreps's famous article. The second half of the chapter is spent discussing how certain insights from other economic analyses of organizations can complement our understanding of corporate culture. 2 Kreps offers two reasons for economists to consider corporate culture. First, understanding culture-and organizations more generally-is necessary for understanding how firms implement strategy: The actual purpose of the firm qua organization is not considered [by textbook economics]. This is rather strange, for if one has an economic mind-set, one must believe that the firm itself performs some economic (efficiency-promoting) function. From there it is a short step to consider as part, perhaps the largest part, of successful strategy those actions designed to increase the firm's organizational efficiency. (From the Introduction.) Kreps's second reason is his belief that economics have now developed the theoretical tools to study culture and he wants "to present the outlines of the theory that is developing," while encouraging his readers to develop it further. Kreps's analysis of corporate culture is built from the following ingredients: 2 The reader interested in the more general topic of the economics of organization (with, however, little to no discussion of corporate culture) would do well to consider the surveys by Gibbons (1998, 1999) and MacLeod (1995). MacLeod's survey is the most technical of the three. 3 Following the convention in economics, a variable is verifiable if its value can be learned by a judge or other outside party called upon to adjudicate a dispute.

This quantitative study examines the relationship between the dimensions of corporate culture and the two types of firm performance: quantitative and qualitative. Data were collected from 45 companies representing a vast portfolio of industries in Turkey. Results derived from the respondents, all of whom were executives from human resources departments, reveal the rich nature of the relationship between corporate culture and overall firm performance. The findings provide support for all three hypotheses studied. The results show that elements of corporate culture have significant positive effects on overall firm performance, both in terms of quantitative firm performance and qualitative firm performance. Thus, practitioners and researchers alike can benefit greatly from the findings and implications reached from this quantitative study conducted in the Turkish business environment.

Much has been written on the importance of corporate culture to corporate performance. Yet there is a dearth of systematic evidence on the nature of, and potential moderating factors on, this relationship. There also is a lack of reported empirical evidence on whether the nature of the corporate cultureperformance relationship varies across countries. Addressing this latter issue is important as firms increasingly operate across national boundaries. The current study contributes exploratory evidence to these questions. Data on corporate culture, performance, and other company characteristics are collected from 22 Mexican and 33 Taiwanese manufacturing companies. The findings indicate that the aspects of corporate culture most emphasized varies across companies of different sizes, environmental uncertainty, and national origin. Further, both national origin and environmental uncertainty moderate the relationship between several aspects of corporate culture and corporate performance. Of particular significance is that for all aspects of corporate culture where country of origin significantly moderated the relationship with performance, the direction of the country's effect had opposite signs between Mexico and Taiwan. I. INTRODUCTION

Startups, the fastest-growing companies globally are notoriously adopting some similar internal behaviors and codes of conduct -at the point that it has become quite stereotypic- that eventually help them to achieve such results. As a matter of facts, as soon as the startup has found its business model it will, in most cases, be bought by firms in search for the next unicorn, willing to bet on the new venture for its potential future cash flows. This research, after introducing the reader to the current state of affairs in M&A deals, wants to analyze the effect of acquisitions on the company culture of startups as target entity. The empirical analysis will be focused on two startups from H-Farm, a business incubator located in northern Italy, and one of the most successful startups within the Italian scenario.