Does Management Matter? Evidence from India

Bloom, Nicholas ; Eifert, Benn ; Mahajan, Aprajit ; McKenzie, David ; Roberts, John

关键词: ACCOUNTING;    ACTION PLAN;    BEST PRACTICES;    BEST-PRACTICE;    BUSINESSES;   

DOI  :  10.1596/1813-9450-5573
RP-ID  :  WPS5573

学科分类：社会科学、人文和艺术（综合）

来源: World Bank Open Knowledge Repository

【 摘 要 】

A long-standing question in socialscience is to what extent differences in management causedifferences in firm performance. To investigate this, theauthors ran a management field experiment on large Indiantextile firms, providing free consulting on modernmanagement practices to a randomly chosen set of treatmentplants and compared their performance to the control plants.They find that adopting these management practices had threemain effects. First, it raised average productivity by 11percent through improved quality and efficiency and reducedinventory. Second, it increased decentralization of decisionmaking, as better information flow enabled owners todelegate more decisions to middle managers. Third, itincreased the use of computers, necessitated by the datacollection and analysis involved in modern management. Sincethese practices were profitable this raises the question ofwhy firms had not adopted these before. Their resultssuggest that informational barriers were a primary factor inexplaining this lack of adoption. Modern management is atechnology that diffuses slowly between firms, with manyIndian firms initially unaware of its existence or impact.Since competition was limited by constraints on firm entryand growth, badly managed firms were not rapidly driven fromthe market.