Research Snapshots
Professor Alex Gillespie and Dr Tom Reader
Academic research shows the importance of measuring and explaining corporate culture to explaining company performance.
Culture and Corporate Scandals
Aim: To develop a way to detect organisations with cultural attributes that increase the risk of a major institutional failure
Research question: Do measures of whether there is a culture of pressuring people to meet unrealistic or risky targets in employee Glassdoor reviews predict future corporate scandals?
Method
-N=4,356,105 words drawn from employee reviews about their workplace on Glassdoor
-N=3,843,548 words in Company earnings calls where executives answer questions from investors
-N=218 companies (MSCI Europe index for 2016-2017)
-Natural Language Processing (NLP): automatically identifies strong pressure on staff to meet unrealistic or risk targets
-Corporate scandals: measured through media analysis and Wikipedia
Reader, T. & Gillespie. (Forthcoming). Target pressure in organizations: developing a natural language processing to investigate cultural attributes that increase the risk of institutional failure
Finding: Target pressure measure i) identified organisations where employees experienced workload and stress that increased misconduct, and ii) corporate scandals (e.g., anti-money laundering, fraud)
Conclusions: Unobtrusive data from sources such as Glassdoor can provide a leading indicator on organisations at risk of a scandal
Culture and Company Performance
Aim: To examine whether unobtrusive indicators of culture can predict company performance
Research question: Can a reliable and valid battery of measures (UCCAT) drawn from unobtrusive and diverse data sets (e.g., Glassdoor, company reports, earnings calls, board data) be developed to measure corporate culture?
Method
-Seven data sources used to measure culture: unobtrusive corporate culture analysis tool (UCCAT)
-Mixture of quantitative (e.g., searches of complaints, board gender balance) and language-based (e.g., Glassdoor, company earnings calls) culture measures
-N=312 companies (MSCI Europe index for 2016-2017)
-Measures focussed on: adaptability; customer focus; detail focus; diversity; employee focus; governance; integrity; results focus
-Independent variable: return on capital employed (ROCE)
Reader, T. W., & Gillespie, A. (2023). Developing a battery of measures for unobtrusive indicators of organisational culture: a research note. Journal of Risk Research, 26(1), 1-18.
Finding: Data sources each provided a unique window into how culture was perceived and understood: e.g., employees, customers, executives. The battery (UCCAT) distinguished companies with better ROCE
Conclusions: UCCAT can be used to provide a multi-perspective view on culture, and measure attributes key to company performance