Duke Fuqua on Corporate Culture: B-School Research

 “There is a lot of talk about culture and next to no scientific research,” said Campbell Harvey in explaining why Duke University's Fuqua School of Business (Duke Fuqua) has begun an extensive study of corporate culture, based on the results of a survey of 1,800 CEOs and CFOs, based largely in the US and Canada.

The study seeks to learn how companies can go about creating an effective corporate culture and what tangible impact this might have on the company’s value.

CEOs are ‘very clear that getting culture right enhances value’ says Duke Fuqua professor

“We go to the CEOs and CFOs and they are very clear that getting culture right enhances value. 52% put culture in the top three things that make a firm valuable. It is a puzzle that if culture is so important to value, why do we hear very few CEOs talking about it? Most often, talk of culture arises after a disaster - such as the VW emissions scandal. We need to change the conversation,” added Harvey, who is working on the study with fellow finance professors at Duke Fuqua, Jillian Popadak and John Graham, as well as Shiva Rajgopal, a professor in accounting at Columbia Business School.

Thus far, the team has found that its executive respondents most often equate corporate culture to a tone, style or standard of behavior as well as to shared values that help employees to make decisions. They've also discovered that belief in its importance is engrained to the point where more than half of respondents believe it influences not just a firm’s value, but also its productivity, creativity, profitability and growth rates.

On the question of value, one case in point came when asking respondents to evaluate two firms of equal operational and strategic benefit for a potential acquisition, one of which has a closely-aligned corporate culture to their own and one which does not. Here, as many as 46% said that they would not even make an offer to acquire the company whose culture was not already aligned, while a further 30% said they would discount their acquisition offer by anywhere up to 30%.

 “Our research team is just getting started…and we look forward to many new discoveries in the months ahead,” said Duke Fuqua’s Graham. The study is being conducted in conjunction with the school’s leadership and ethics research center, known as COLE, through which MBA students at Duke Fuqua can gain a concentration in leaderships and ethics.