Promoting Core Values with Formal Controls: Evidence from a Formal Communication and Performance Assessment Intervention

We analyze the effects of introducing formal controls to communicate and reinforce corporate values among incumbent workers. Using data from a retail chain, we examine the intervention’s impact on variables capturing behaviors consistent with those values. The intervention’s effectiveness exhibited significant variation. Specifically, we find it to be more effective in stores with greater promotion opportunities—consistent with the system motivating increased effort where implicit incentives are stronger—and in stores with managers who had experience related to the implementation of the promoted values—consistent with the system benefiting from skills and expertise necessary for acting on core values. However, the intervention was counterproductive along various dimensions where leadership’s actions were likely to be perceived as inconsistent with the espoused values. Our findings highlight important factors for instilling core values via formal management controls. Data Availability: The data used in this project were provided to the authors on a proprietary basis and cannot be shared without the express consent of the organization’s legal representatives. JEL Classifications: M12; M40.