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  • Article
  • RAND Journal of Economics

On the Origin of Shared Beliefs (and Corporate Culture)

By: Eric J. Van den Steen
  • Format:Print
  • | Pages:32
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Abstract

This article shows how corporate culture, in the sense of shared beliefs and values, originates (often unintentionally) through screening, self-sorting, and manager-directed joint learning. It shows that such culture will be stronger among more important employees and in older and more successful firms where employees make important decisions and the manager has strong beliefs. It further shows how a manager's beliefs influence culture, how culture persists despite turnover, and why the suggested link between culture and performance may be a case of inverse causality. It finally shows that, from an outsider's perspective, organizations may tend to over-invest in corporate culture.

Keywords

Organizational Culture; Learning; Values And Beliefs; Employees; Decisions; Power And Influence; Performance; Perspective

Citation

Van den Steen, Eric J. "On the Origin of Shared Beliefs (and Corporate Culture)." RAND Journal of Economics 41, no. 4 (Winter 2010): 617–648.
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About The Author

Eric J. Van den Steen

Strategy
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More from the Author
  • Strategy as Core Guidance By: Eric Van den Steen
  • Irreversibility By: Pankaj Ghemawat and Eric J. Van den Steen
  • Birds of a Feather ... Enforce Social Norms? Interactions Among Culture, Norms, and Strategy By: Hongyi Li and Eric J. Van den Steen
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