The Link between Corporate Culture and Firm Performance
The Link between Corporate Culture and Firm Performance

Summary/Abstract: The existing literature on the relationship between culture strength and performance focuses on the consequences of strong cultures for performance levels but has not examined how strong cultures affect performance variability, or the reliability of firm performance. This is surprising, since the arguments relating culture strength to performance draw particular attention to the benefits of having greater internal consistency in goals and behaviors. One should therefore expect strong-culture firms to exhibit less variable performance. This expectation is complicated, however, by the fact that the variability of a firm's performance depends not only on the ability to maintain consistency in internal processes but also on the firm's ability to adapt to environmental change. The relationship between culture strength and performance reliability, therefore, should depend on how strong-culture firms learn from and respond to both their own experiences and changes in their environment.

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