What makes good companies good?

A new, large annual index from researchers at the Department of Economics and Business will identify what characterises the most productive companies in terms of salary, staff and management.

2011.11.17 | Martin Hagelskjær Damsgaard

Before the end of next week, 4,500 HR managers in Danish companies will receive a comprehensive questionnaire from a group of researchers at the Center for Corporate Performance, Department of Economics and Business.

This is the launch of a new business index, which may prove to be very useful to Danish companies. There are not many equivalents to this initiative in the international research environment. The intention is to publish the index once a year with new data.

- Many companies talk about the proper way of doing things. We are interested in the cleverest way - best practice. This will manifest itself over a period of years, during which it is possible to follow the individual companies and see what they have accomplished, says Professor Niels Westergård-Nielsen, who is the head of the project.

The researchers will study why some companies are more productive than others, and which causal relations underlie the success. For instance, they will look at how far the companies are in the process of implementing incentive payment systems, and how systematically they are working on gathering relevant knowledge about their greatest asset – their staff:

- There is a widespread attitude that technological innovation is the only way to increase productivity. But the fact is that if companies can get their competent staff members to do better and accomplish more, they are probably better off, says Niels Westergård-Nielsen.

- It’s a matter of which data a company systematically collects on its staff members for the purpose of recruiting future managers. When should they be promoted, and from where should they be recruited are questions that should not be answered based on instinct, he continues.

The index also brings into focus what companies do to get through the current financial difficulties, and whether they have problems with funding, salaries or the employment situation.

- Nobody knows at this point, so it will definitely be interesting to look at, and one can secretly hope that it will have an effect on the decisions of politicians and banks in the years to come, says Niels Westergård-Nielsen.

This year, the study will include a relatively large number of industrial companies, since this sector has been most affected by the financial crises in recent years. Statistics Denmark is responsible for issuing and collecting the questionnaires, as this will ensure anonymity. The combination of businesses and sectors may vary from one year to the next according to topicality.

Further information:

Niels Westergård-Nielsen
Professor and Director of CCP

Aarhus University, Business and Social Sciences
Department of Economics and Business
Center for Corporate Performance

Office: +45 8948 6407
Mobile: +45 2144 2250
E-mail: nwn@asb.dk
Web: www.asb.dk/staff/nwn

Aarhus BSS