The role of regulatory policies in organizational culture: Insights from the education industry

Abstract

On February 26, 2018 and July 24, 2021, the Chinese government respectively issued two significant regulatory policies to address the problems caused by off-campus training institutions in terms of students’ extra-curricular and family financial burdens. These policies have had a tremendous and far-reaching impact on the off-campus training industry in China. With the help of these two events, we explored the role of industry-level regulatory policies in shaping and forming organizational culture. This paper adopts a text analysis method, combined with the dimensions of the Denison Organizational Culture Survey (DOCS) and MAXQDA 18 software, to obtain data on corporate culture. Then, the approaches of regression discontinuity in time (RDiT) and regression discontinuity (RD) designs with multiple cutoffs are used to estimate the policy treatment effect. This empirical research suggests that regulatory policies have a significant impact on corporate culture. Moreover, regulatory policies of varying degrees of strictness have differential effects on different dimensions of corporate culture. The research findings contribute to the theories of corporate culture and can guide enterprises to evaluate the impact of policies on corporate culture more clearly, thereby enabling them to make wiser operation decisions.