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ABSTRACT: In contrast to the sociological literature, conventional economic analysis of organizational behavior in the face of legal incentives has largely ignored the concept of “corporate culture.” Building on the small, emerging work in economics that does take culture seriously as well as contributions from sociology and social psychology, this paper suggests that the emergence of belief systems that determine what is paid attention to and what is ignored has an important effect on compliance with law under conditions of ambiguity and will itself be a function of the competitive conditions that the firm faces – the more competitive the pressures, the more robust and powerful the culture necessary to facilitate productive activity. In other words, corporate culture as a coordinating device operates most powerfully when the firm has a strong incentive to be focused in its behavior in order to survive or prosper. Illustrations of the relevance of this to legal analysis are taken from environmental law, equal employment law and corporate/securities law