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BIA-Brukerstyrt innovasjonsarena

REQ Cultural Index Model

Alternative title: REQ Cultural Index Model

Awarded: NOK 0.63 mill.

Finding the best organizations to invest in for the long run is highly dependent on finding outstanding people, management, and a corporate culture where people thrive. Nonetheless, most asset managers today base their investment decisions almost entirely on fundamental research of financial accounts. Thus, this project is interested in studying the relationship between people-oriented culture drivers and corporate performance, establishing an approach that leverages organizational insight for use in investment decision-making. Our ambition is to develop a platform that utilizes the latest advances within computational linguistics, advanced analytics, and AI to gain automated in-depth insights into corporate culture. The project is dependent on the outcome of the research and definition of cultural drivers for long-term profitability in organizations. Hence currently, the project partners together with researchers at BI Norwegian Business School, are in the process of defining cultural drivers that are identifiable, measurable, and significant for long-term financial performance. Secondly, we will evaluate, compare and weight these cultural drivers. Within 2022 the projects aims to have identified specific cultural drivers in order to create a good dataset as a basis for a well performing language model.

Fokuset på kultur og kulturelle drivere i beslutningene mener vi er viktig for å forstå utvikling i aksjekurs. Prosjektet måtte stoppes før det var fullført, pga manglende midler til egenfinansiering. Vi har derfor ikke fått datagrunnlaget vi ønsker for å forbedre beslutningene.

Our experience over many years with investments has shown us that finding the best organizations to invest in for the long run is highly dependent on finding outstanding people, management, and a corporate culture where people thrive. Nonetheless, most asset managers base their investment decisions almost entirely on fundamental research of financial accounts. Historical metrics like earnings, cash flow, capital expenditure, and market size form the basis of their perception of a company’s growth potential. However, a growing body of literature indicates that organizational culture is directly correlated with company performance, as culture can indicate characteristics like innovation focus, agility, and employee engagement. In recent years we have seen firms buckle under due to scandals caused by poor corporate culture. Volkswagen’s emission scandal and Wells Fargo’s account fraud are prime examples of the level of destruction that toxic corporate cultures can create. Our ambition is to develop a platform that utilizes the latest advances within computational linguistics, advanced analytics, and AI to gain automated, in-depth insights into corporate culture. This will support investors in making more sustainable and financially profitable investments. Making insights on company culture available will make it possible for asset managers to do investment decisions on a more qualified basis, reduce risk and allocate capital towards healthy organizations in a way that has not been done before. Moreover, we believe that this platform may have future potential within other industries, such as governmental bodies, banks, consultancy firms and others who are interested in gaining insight into the relation between corporate culture and long-term financial performance. We believe this could translate into a ground-breaking platform for the asset management industry, and beyond, that does not exist today.

Funding scheme:

BIA-Brukerstyrt innovasjonsarena