Should Investors Care About Corporate Culture?

Should Investors Care About Corporate Culture?

 

In this episode, hosts Kate Holland and Veljko Fotak delve into the significance of corporate culture and its impact on firm performance and investor portfolios. They discuss the struggle to measure corporate culture, using examples like Steve Jobs at Apple where storytelling helped create an innovative environment. The conversation extends to whether cultural aspects of respect, integrity, teamwork, innovation, and quality influence profitability. They explore research linking corporate culture with stock returns, fraud prevention, and adaptability. The discussion also covers the influence of societal culture on corporate behavior and how factors like regulatory changes and leadership shifts affect corporate culture. They conclude by suggesting that investors should be cautious of firms showing reduced innovation, high-risk cultures, or inconsistent communication of their corporate values.

 

Timeline:

 

00:00 Culture, Stories, and Shared Beliefs

06:37 Welcome to Questions in Finance

07:15 Defining Corporate Culture

12:32 Corporate Culture and Intangible Assets

23:44 Country-level Cultural Traits and Corporate Culture

31:36 Changing Corporate Culture

36:37 Strategic Communication of Cultural Values

46:07 Corporate Culture and Firm Performance

51:27 Fraudulent Firms and Market Penalties

59:32 Risk Culture in Banks

01:02:43 Parking Tickets

01:11:16 Measuring Corporate Culture

01:14:31 Culture Examples: Skechers, Nike, Kodak, Xerox, Sony and More...

01:27:03 Summary & Goodbye!

 

 

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Braguinsky, Serguey, and Sergey Mityakov. "Foreign corporations and the culture of transparency: Evidence from Russian administrative data."  Journal of Financial Economics 117 (2015): 139-164.

Chamberlain, Andrew. "Does company culture pay off? Analyzing stock performance of 'Best Places to Work' companies." Glassdoor Research Report (2015).

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Online Sources:

Sull, Donald, Charles Sull, and Andrew Chamberlain. "Measuring Culture in Leading Companies"

https://sloanreview.mit.edu/projects/measuring-culture-in-leading-companies/#chapter-5

 

Soundtrack:

The soundtrack is based on "Walk on a Funky Street" by MondayHopes. Thanks for the music and keep up the good work! Use is under the Pixabay Content License.