A Virtuous Circle? Co-evolution of Regional and Corporate Cultures

Abstract

This paper presents the results of a comparative analysis of the interaction between corporate cultures and regional cultures in seven different regions. First, we develop the hypothesis that under certain conditions, the interaction between corporate cultures and regional cultures becomes a virtuous circle, in which corporate performance and regional performance reinforce each other. Based on the literature on corporate and regional (innovation) cultures, nine different fields are identified in which the interaction between corporate culture and regional culture takes place and potentially contributes to the “virtuous circle”. The interaction of regional and corporate actors in the seven regions is then analysed for each of these fields of potential tension and synergy, resulting in a comparative overview of the regions, detailing where virtuous circles appear to be present and where the interaction appears to be absent or even counterproductive. Subsequently, the analysis zooms in on the cases where interaction between corporate and regional actors resulted in virtuous consequences, in order to identify actions of companies and regional actors that contributed to the “virtuous circle”. It is concluded that successful regions are regions that are handling the potential tensions in a balanced way. This requires mutual orientation in the actions of companies and regional actors and the development of change competencies on both sides. The results underline that the circle of interaction between corporate and regional cultures must be an open circle, so that external events can be used as an opportunity to trigger change and to set the “virtuous circle” in motion.