I teach at a School of Management so you won’t be surprised to learn that I think good management can make a huge difference in the performance of companies, and ultimately the economy. But you may be surprised that there is very little economic research on the effects of management. Sure, there’s lots of speculation and countless management books and articles, but a recent review of the economic literature by Chad Syverson concluded: “No potential driving factor of productivity has seen a higher ratio of speculation to empirical study [than management practices].” The biggest problem has been simply a lack of a comprehensive, reliable data set of management practices.
It was also interesting to note that adoption of structured management practices has increased between 2005 and 2010, particularly for those practices involving data collection and analysis. This is consistent with my earlier research with Lorin Hitt and Heekyung Kim on Data-Driven Decisionmaking.
- There is a substantial dispersion of management practices across the establishments. Eighteen percent have adopted at least 75% of these more structured management practices, while 27% adopted less than 50% of these.
- There is a positive correlation between structured management practices and location, firm size, establishment-level measures of worker education, and export status.
Going forward we will continue to analyze the data and explore causality. Additionally, we may do another survey in 2015 to establish longer-term data and perhaps will focus on the retail or health-care sector.
Let me know what other ideas you think we should explore.
This post first appeared on the MIT Center for Digital Business Community site.