Discussion paper

DP17382 Organizational Dynamics: Culture, Design, and Performance

We examine the two-way interplay between organizational cultures and organizational design, where culture is modeled as the prevailing social identities among workplace groups that can affect project choices. In a setting where cultural dynamics depend on the expected relative payoffs of holding different identities, we investigate how tribalism and charismatic leadership shape organizational dynamics and steady-state cultures. We show how a strong culture can be a virtue when it permits greater delegated authority, but a vice when the culture is poorly aligned with organizational objectives. We apply our analysis to concrete debates about the interaction of design, performance and culture.

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Citation

Besley, T and T Persson (2022), ‘DP17382 Organizational Dynamics: Culture, Design, and Performance‘, CEPR Discussion Paper No. 17382. CEPR Press, Paris & London. https://cepr.org/publications/dp17382