The Effect of Adaptive Organizational Culture on Long-Term Survival

Purpose Organizational culture is a critical resource for organizations to adapt to dynamic environments and to survive in the long term. Unfortunately, a lack of clarity exists in the conceptualization of adaptive cultures and little empirical research investigates its impact on survival. Therefore, the purpose of the present study was twofold: (1) to identify, define, and develop a measure of adaptive organizational culture and (2) to demonstrate the effect of adaptive culture on organizational survival. Design/Methodology/Approach An adaptive culture rating scale was developed based on a review of the existing literature. Ninety-five organizations founded prior to 1940 were rated on nine characteristics of adaptive culture. Ratings were used to predict likelihood to survive using a Cox regression with proportional hazards survival analysis. Findings Exploratory factor analysis revealed two broad factors of adaptive culture, values toward change and action-orientation. Findings indicate organizations with adaptive cultures were more likely to survive. Implications The present effort provided evidence that culture can serve as an adaptive mechanism with effects spanning decades. Leaders should focus on establishing adaptive cultural norms and values in order to increase chances of surviving. Originality/Value This is one of the first historiometric studies to develop and utilize a measure of adaptive culture. Further, this study looked at the impact of adaptive culture on long-term organizational outcomes using survival analysis, a statistical technique not often employed in the organizational literature.