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Can Institutional Cultures Change?


There’s a provocative article in the latest Atlantic (March 2012) on “Why Companies Fail.” The reason why corporate turnarounds are so difficult and rare, according to author Megan McArdle, is the stubborn persistence of dysfunctional corporate cultures. These cultures are the hardest things of all to change. She cites Detroit automaker GM as a case in point. It was bailed out by the government less than two years ago, and freed from most of its excessive overhead and liabilities. But its stock value has fallen by a third since then. The reason? GM still thinks and acts like GM. It is still the same old culture on the inside.

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