When capital market actors reduce the complexity of corporate personnel and work environment information

Abstract

PurposeThe purpose of this paper is to explore how capital market actors deal with information on personnel and work environment.Design/methodology/approachThe paper uses a qualitative research approach involving interviews with 14 fund managers and two bankers in Stockholm. The empirical analysis is influenced by a combination of system and network theories where social networks are imposed on capital market actors, when they observe corporate information vis‐à‐vis personnel and work environment.FindingsCapital market actors are influenced by social forces when they reduce the complexity of information on corporate personnel and work environment. Four themes emerged in this study concerning emergent paradoxes which results from such a reduction. First, capital market actors seem to regard personnel in a variety of ways: sometimes as a resource, and sometimes as a risk or a non‐flexible cost problem. Second, they tend to reduce the complexity of information by depending on having the right management in organisations. Third, capital market actors refer to work environment matters as things that involve ethics and can affect their own reputation. Finally, they were continuously looking for signs that their initial analyses could be wrong. To various extents, the themes support each other by solving the emergent paradoxes that, according to systems theory, inevitably result from the reduction of external complexity.Originality/valueThis paper argues that the ambivalence and disinterest shown by capital‐market actors concerning information on personnel and work environment could be better understood by referring to how social forces influence capital‐market actors when they reduce the complexity of such information.

Fund manager trust and information complexity

“…The results in this study suggest a strong reliance on management when fund managers interpret corporate information consistent with Almqvist and Henningsson (2009). Based on these results, we are not able to discuss further the social agenda surrounding the valuation of a company (Henningsson, 2009).…”

“…The results have explorative value and are limited to one area of financial markets, institutional investments, specifically the social context of fund managers. This study contributes to a series of studies and suggestions from the same research area that includes "the idea of a social agenda surrounding the valuation of a company" (Henningsson, 2009) and "the strong reliance on management when reducing corporate information complexity" (Henningsson, 2009;Almqvist and Henningsson, 2009). From a broader financial market social study perspective, the implications of these results become limited and highly tentatively.…”

Importance of Intellectual Capital Information: A Study of Australian Analyst Reports

“…They found that information about employees, their working environment and employee satisfaction is least desired, and information about employee‐related investments is not disclosed at all by analysts. Almqvist and Henningsson () argued that analysts exclude the value contribution made by corporate personnel and work environments from their analyses due to the complexity of calculating their worth, but include management quality as a proxy. Prior studies have attributed the limited use of HC information to the lack of information on such measures (Sakakibara et al.…”

Tightrope walking: external impact factors on workplace health management in small-scale enterprises

“…Employers now generally consider a reasonable working environment a prerequisite for legitimacy among the organization's stakeholders (Almqvist & Henningsson, 2009;Frick & Zwetsloot, 2007). Research shows that companies must pay close attention to WHM to prevent sickness and create healthy workplaces (Department of Health, 2004;Holt & Powell, 2015;Lindström, Schrey, Ahonen, & Kaleva, 2000).…”