Corporate culture and financial stability: A study of US hotel firms

This paper analyzes the impact of corporate culture on hotel financial stability. We conduct textual analysis on 10-K reports of 47 US-listed hotel firms from 2000 to 2021 to quantify four corporate culture dimensions in the Competing Values Framework – Control, Collaborate, Compete, and Create. The results suggest that hotel firms whose cultures focus on individuality and flexible organizational structure, i.e., Create and Collaborate, have a lower level of financial stability. We also find that this relation is more pronounced (1) during non-crisis periods when hotel firms are more affected by external economic conditions rather than the internal culture; (2) among larger hotel firms where corporate culture is more established; and (3) among multi-divisional/multinational hotel firms who may cultivate and sustain their culture more rigorously to coordinate and unite multiple business/international units. Our findings suggest that hotel firms should highlight corporate culture in shaping their sustainable financial management strategy.