This article develops the argument that organizational or corporate culture is strongly influenced by the characteristics of the industry in which the company operates. Thus, companies within an industry share certain cultural elements that are required for survival. The article identifies three classes of industry variables that have the potential for creating industry-driven cultural elements: competitive environment, customer requirements, and societal expectations. The article also discusses implications of the industry influences on the potential for culture change.

ABSTRACTThis article investigates the relationships of culture strength and two substantive cultural values with corporate performance. Culture strength is measured by the consistency of responses to survey items across people and the two cultural values are measured by items on the survey that relate to either adaptability or stability. The data, from management surveys of 11 US insurance companies in 1981, were correlated with asset and premium growth rates from 1982 to 1987. Results indicate that both a strong culture regardless of content and a substantive value placed on adaptability are associated with better performance for two to three subsequent years on both criterion measures. The results support the findings of Denison (1990) that strength of culture is predictive of short‐term performance. The present results, however, suggest a more complex contingency model than that proposed by Denison.