Increasing educational standards in the workforce have increased the use of experts throughout the economy, leading to processes that more closely resemble bureaucracies and stakeholder policymaking, with an increasing emphasis on culturally liberal values such as diversity, representation, and social responsibility. The guiding industries and workforces of the scientific and technology sectors have enabled a technocratic ethos in government and industry. But public opposition to technocracy and skepticism of meritocracy is growing among voters, allowing conservatism to brand itself as an opposition movement to the extension of government reach and the associated prevalence of “politically correct” messages and practices across educational institutions and in the workplace. The polarized American brand of politics pervades internal debates across organizational sectors, enlarging the scope of activist politics beyond campaigns and government, especially where educational and cultural divides are strongest. The distinct styles of the culture war’s two conflicting sides have become more dissimilar at the national, state, and local levels, even in ostensibly apolitical arenas.

This chapter explores how national cultures can influence the relationship between stakeholders and strategies around the world; how the relationship between strategy and organization structure can be influenced by local regional differences; how national and regional cultures can influence decision-making process in organizations; and how corporate cultures are created and reinforced by cultural, organizational, and situational factors.

Effective boards should evolve from their emphasis from compliance and box-ticking to promoting a healthy corporate culture that underpins individual and corporate behavior. This is the theme examined in Chapter 7. Corporate culture can serve as a driver of employee engagement, inspiration and creativity and competitive advantage. This is a delicate issue: The board does not define corporate culture, yet can still enhance and protect it, and ensure the company possesses a culture that fosters collaboration, customer orientation, initiative, accountability, transparency, diversity, inclusiveness and integrity, all of them qualities that help develop the organization for the long term.

This chapter brings together the neglected pre-1980 “behavioral theory of the firm” and the Marshallian resource-based or capabilities-based evolutionary approach to the firm to analyze the drivers of efficiency and productivity in organizations. It begins with Leibenstein’s X-efficiency view of why firms differ in their costs and then adds a dynamic perspective by considering the growth of knowledge view of the firm offered by Marshal and Penrose, which emphasizes the role of managerial learning, before introducing the learning curve concept. The focus then moves to the consequences of employment contracts being loosely specified and managers having to earn their authority by how they operate. This leads in turn to the behavioral view of organizations as shifting coalitions of stakeholders who are trying to pursue diverse subgoals, which may result in firms earning smaller profits that would have been possible and in the accumulation of “organizational slack.” Finally, the chapter discusses the impact of (sometimes highly dysfunctional) corporate cultures – i.e., the operating systems of formal and informal rules that firms use – in shaping their productivity and ability to change.

Business history and theory reflect a tension between public and private conceptions of the corporation. This is embodied in the famous Berle-Dodd debate, which provides the basis for contemporary clashes between “different visions of corporatism,” such as the conflict between shareholder primacy and stakeholder-centered versions of the corporation. This chapter examines a number of recent developments suggesting that the pendulum, which swung so clearly in favour of a private conception of the corporation from the 1980s onwards, is in the process of changing direction. The chapter provides two central insights. The first is that there is not one problem, but multiple problems in corporate law, and that different problems may come to the forefront at different times. The second insight is that corporate governance techniques (such as performance-based pay), which are designed to ameliorate one problem in corporate law, such as corporate performance, can at the same time exacerbate other problems involving the social impact of corporations.