Organization Culture Can It Be A Source Of Sustained Competitive

* Academy o/Monogemen/Review. 1986, Vol. 11. No. 3. 656-665.

Organizational Culture:
Can It Be a Source of
Sustained Competitive Advantage?
JAY B. BARNEY
University of California, Los Angeles
Three attributes that a iirm 's culture must have to generate sustained competitive advantages are isolated. Previous iindings suggest that the cultures oí some iirms have these attributes; thus, these cultures are a source oí such advantages. The normative implications oí the analysis are discussed. Firms that do not have the required cultures cannot engage in activities that will modi// their cultures and generate sustained superior iinancial periormance because their modiiied cultures typically will be neither rare nor imperiectly imitable. Firms that have cultures with the required attributes can obtain sustained superior iinancial periormance irom their cultures.

Recent attempts to explain the sustained superior financial performance of firms like IBM,
Hewlett-Packard, Proctor and Gamble, and McDonald 's have focused on the managerial values and beliefs embodied in these ftrms ' organizational cultures ("Corporate Culture," 1980; Deal
& Kennedy, 1982; Peters & Waterman, 1982;
Tichy, 1983). These explanations suggest that firms with sustained superior ftnancial performance typically are characterized by a strong set of core managerial values that define the

ways they conduct business. It is these core values (about how to treat employees, customers, suppliers, and others) that foster innovativeness and flexibility in ñrms; when they are linked with management control, they are thought to lead to sustained superior financial performance.
Many of these explanations have a strong normative orientation. Firms with strong cultures are pointed out as examples of excellent management (Peters & Waterman, 1982); mechanisms for modifying the cultures of other firms to approximate closely the cultures of successful firms have been widely discussed and applied ("Corporate
Culture,"

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