Théo Durandard (University of Illinois at Urbana-Champaign)
Abstract
I propose a new way to think about stories in organizations: by recasting the organi- zation’s goals, stories give a new purpose to the organization’s members, hence, changing their preferences. In this framework, what stories are told interacts with the structure and practices of the organization. In particular, stories may create a new complementarity between homogeneous workers through the provision of incentives. This, in turn, can help explain the large level of homogamy firms exhibit and the emergence of focal cultures. Finally, I study the implications of my model on wages, hiring practices, and promotions by placing the firm in a competitive labor market. Here I establish that when workers are of one of two different (cultural) groups, firms favor workers from the larger group.