The interplay between Work Environment and Profitability: Insights from Industry-Level Analysis in Norway

Abstract

This thesis investigates the relationship between work environment dimensions and industry-level profitability in Norway, addressing the research question: “How are dimensions of the work environment associated with industry-level profitability in Norway”. Drawing on data that integrates workplace quality indicators with financial performance metrics, this study aims to contribute to the growing body of research on the intersection of employee well-being and organizational outcomes.

The findings highlight that specific work environment dimensions, such as job prospects, job tasks, and organizational environment, exhibit strong relationships with industry-level financial performance. Job prospects, encompassing career development and skill-building opportunities, demonstrate a positive relationship with Return on Assets (ROA), underscoring the possible profitability of investing in employee growth across industries. Similarly, high-quality organizational environments and well-designed job tasks, characterized by autonomy, task discretion, and reduced emotional demands, emerge as having positive relationships with revenue per employee. These findings align with existing literature on individual and firm-level impacts, emphasizing the importance of fostering, supportive and empowering work environments. In contrast, other factors, such as the intrinsic aspects, physical environment and social environment, displayed weaker and less consistent relationships with financial outcomes, suggesting they may be harder to measure or less impactful at an aggregated industry level.

Amid growing challenges in increased psychosocial strain posed by digitalization and robotization, this research provides insights for policymakers and businesses. Emphasizing prioritization of factors such as autonomy, growth opportunities, and organizational support in the workplace. Investments in these areas might yield financial benefits across economic sectors, while contributing to sustainable work environments and overall worker wellbeing.