CONTINGENT ORGANIZATION AS A NETWORK THEORY - THE CULTURE-PERFORMANCECONTINGENCY FUNCTION

Network models of market competition are used to advance from two sign ificant research efforts; Lawrence gi Lorsch's (1967) demonstration th at the optimum form of organization varies between markets, and Kotter and Heskett's (1992) study of corporate culture and performance. We c ompare firms in terms of their economic performance, the extent to whi ch they have a strong corporate culture, and the network structure of their market. The value of a strong corporate culture varies between m arkets; nothing in one market, an asset in more competitive markets. F rom the variation between markets, we build a culture-performance cont ingency function that uses the network structure of a firm's market to predict the extent to which a strong corporate culture can be expecte d to enhance the firm's performance. With the contingency function, an d market census data, we infer that the correlation between culture an d performance is strong in the American economy, especially in manufac turing. We also use the function to identify reasonable samples of org anizations in which the correlation will be weak, The contingency func tion is an interesting substantive phenomenon in its own right and a v aluable analytical tool for generalizing results on sample firms to po pulation conditions.