Organizations with dysfunctional cultures have negative effect on performance as their corporate cultures act as economic ‘liabilities’. In organization s with dysfunctional cultures, earnings are
“less than” what they might otherwise be, thereby incurring real opportunity costs. Starbucks is a classic success story with a strong positive culture that is an economic asset, while K-Mart (Filed bankruptcy on January 22, 2002), AIG (prevented from bankruptcy by being “too big to fail”) and GM (pre 2010) are classic cases of a dysfunctional corporate culture that led it to a steep decline in profitability (Flamholtz and Randle, 2012).