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Corporate culture and the bottom line

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  • Flamholtz, Eric

Abstract

The paper deals with the effects of corporate culture on financial performance. Previous authors have suggested that culture has an impact on financial performance. Unlike previous studies which have only examined the effects of culture on financial performance using cross sectional data, this study was done in a single organization. The company had twenty relatively comparable divisions, and provides a somewhat rare, if not unique, opportunity to assess the effects of corporate culture on financial performance. The results, using a regression analysis, suggest that there is a statistically significant relationship (at 0.05 level) between culture and financial performance (measured by 'EBIT,' or earnings before interest and taxes). Thus these results provide support for the previously hypothesized relationship between culture and financial performance with significant implications for management theory and practice

Suggested Citation

  • Flamholtz, Eric, 2001. "Corporate culture and the bottom line," European Management Journal, Elsevier, vol. 19(3), pages 268-275, June.
    • Handle: RePEc:eee:eurman:v:19:y:2001:i:3:p:268-275
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    Citations

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    Cited by:

    1. Maria Buttery & Lester W. Johnson & Gordon E. Campbell, 2023. "How Does Organisational Culture Affect Employees’ Perception of the Brand in Service Industries?," Businesses, MDPI, vol. 3(1), pages 1-15, January.
    2. Zaman, Rashid, 2024. "When corporate culture matters: The case of stakeholder violations," The British Accounting Review, Elsevier, vol. 56(1).
    3. Angela Minzoni & Julie Stal-Le Cardinal, 2009. "Open – Mindedness, Empathy And Gender Issues: Going Beyond National And Corporate Cultures," Post-Print hal-01233146, HAL.
    4. Thi Nguyen, Loan Quynh & Matousek, Roman & Muradoglu, Gulnur, 2024. "Bank capital, liquidity creation and the moderating role of bank culture: An investigation using a machine learning approach," Journal of Financial Stability, Elsevier, vol. 72(C).
    5. Hiep Ngoc Luu & Lan Thi Mai Nguyen & Kieu Trang Vu & Loan Quynh Thi Nguyen, 2023. "The impact of organizational culture on bank stability," Review of Quantitative Finance and Accounting, Springer, vol. 61(2), pages 501-533, August.
    6. Fuxiu Jiang & Kenneth A. Kim & Yunbiao Ma & John R. Nofsinger & Beibei Shi, 2019. "Corporate Culture and Investment–Cash Flow Sensitivity," Journal of Business Ethics, Springer, vol. 154(2), pages 425-439, January.

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