Organizational Culture and Firm Performance under Environmental Volatility: The Case of the COVID-19 Pandemic

We examine how organizational culture influenced firms’ financial resilience during the COVID-19 pandemic. To investigate the relationship between culture, culture change, and financial resilience in the context of a widespread exogeneous crisis, we use qualitative data from millions of employee reviews on the Glassdoor platform and employ natural language processing (NLP) techniques to estimate over 1,000 firms’ cultural profiles. We provide insights on how six theoretically derived organizational culture dimensions—adaptability, results-orientation, detail-orientation, integrity, collaboration, and tightness—influenced companies’ financial resilience during the COVID-19 pandemic. Our findings advance theory linking culture and culture change to financial resilience as well as explain how culture can buffer firms from the negative effects of exogenous shocks. We also highlight practical insights on how firms can leverage culture to build resilience.