The shared beliefs that define a corporate culture function as an informal control mechanism that coordinates employee effort. Employees who deviate from accepted practice can be easily detected and admonished faster and less visibly by friends than by the boss. Employees also work harder and for longer hours in an organization with a strong corporate culture. Furthermore, a strong corporate culture tends to drive out those who do not feel comfortable with the corporate culture, leaving a stronger and more unified group. In addition, when corporate culture is socially constructed by employees rather than imposed through formal lines of authority, employee motivation and morale increase.
Employees develop a sense of ownership and establish a stake in the firm's health and performance.
The value of a strong culture varies inversely with the level of competition in the external environment. A strong culture is most valuable in intensely competitive environments. Graduate School of Business.