An organization´s culture is closely linked to its results. Information about organizational culture can therefore be important to investors. Despite this it is difficult to find systematic data on it and few investors use such data in investment decisions.
“Investors usually focus on financial variables, such as returns, cash flow and market size when they look for profitable businesses. New research shows that organizational culture can play a significant role in how well companies perform over time. In this project we will use alternative data sources to make it easier for investors to measure companies´ organizational culture,” says Leif Anders Thorsrud, one of the contributors to the project at BI.
The project lasts from 2022 to 2024. The Research Council of Norway provides NOK 11,8 million in funding. REQ Capital AS, the project leader, provides NOK 4,8 million. Equality Check AS and Great Consulting AS, also participate and contribute around NOK 150.000 each. BI Norwegian Business School is research partner, and AVO Consulting coordinates the project.
“This is an exciting research project for BI. It will build bridges between computer science, management, and economics, all of which are key fields for us. At the same time, it has the potential to create significant value for businesses and society by making investors better at identifying promising companies,” says Hilde C. Bjørnland, Provost for Research and Academic Resources at BI.
The objective is a digital platform that uses artificial intelligence to collect data on companies’ culture and analyze how this affects financial results. The project will use open and available data from services like Equality Check and Glassdoor, which enables employees to write reviews of the company they work for or have worked for.
Organizational culture can be defined as “the way we do things around here”. It can reveal much about a company´s focus on innovation, agility and employee engagement. For example, a 2015 study from Glassdoor shows that companies with a good working environment do far better than companies with a bad working environment.
Leif Anders Thorsrud, Anders Dysvik and Erlend Aune participate from BI. Thorsrud is an expert in economics and machine learning, Dysvik is an expert in management and HR, and Aune is an expert in data science and artificial intelligence.