Does Management Matter? Evidence from India
A long-standing question in social science is to what extent differences in management cause differences in firm performance. To investigate this, the authors ran a management field experiment on large Indian textile firms, providing free consultin...
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| Format: | Policy Research Working Paper |
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2012
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| Online Access: | http://www-wds.worldbank.org/external/default/main?menuPK=64187510&pagePK=64193027&piPK=64187937&theSitePK=523679&menuPK=64187510&searchMenuPK=64187283&siteName=WDS&entityID=000158349_20110223131540 http://hdl.handle.net/10986/3340 |
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okr-10986-33402021-04-23T14:02:09Z Does Management Matter? Evidence from India Bloom, Nicholas Eifert, Benn Mahajan, Aprajit McKenzie, David Roberts, John ACCOUNTING ACTION PLAN BEST PRACTICES BEST-PRACTICE BUSINESSES COBB-DOUGLAS PRODUCTION FUNCTION COMPUTER USERS COMPUTERS CONTROL SYSTEMS CORPORATE POLICY DECENTRALIZATION DEVELOPMENT ECONOMICS DOMESTIC MARKET DOWNWARD BIAS E-MAIL ECONOMIC GROWTH ECONOMICS EFFICIENCY IMPROVEMENTS EMPLOYEE EMPLOYMENT ENTERPRISE RESOURCE PLANNING EQUIPMENT ESTIMATED PRODUCTIVITY EXCLUSION RESTRICTION EXTERNAL CONSULTANTS FARMERS FINANCIAL CONSTRAINTS FINANCIAL SUPPORT FIRM ENTRY FIRM GROWTH FIRM LEVEL FIRM PERFORMANCE FIRM SIZE FIRM TURNOVER FIRM-LEVEL PRODUCTIVITIES FLOW CHART HUMAN RESOURCE HUMAN RESOURCE MANAGEMENT IMPACT ASSESSMENTS IMPLEMENTATION PERIOD IMPLEMENTATION STAGE INCOME INCOME INEQUALITY INDUSTRIAL DEVELOPMENT INDUSTRIAL RELATIONS INDUSTRY PRODUCTIVITY INFORMATION FLOW INFORMATION TECHNOLOGY INNOVATION INTERNATIONAL CONSULTANTS INTERNATIONAL STANDARDS INVENTORIES INVENTORY INVENTORY LEVELS INVENTORY MANAGEMENT LABOR ECONOMICS LABOR MARKETS LABOR PRODUCTIVITY LABOR REGULATIONS LABOR RELATIONS LEGAL ENVIRONMENT LOCAL FIRMS MANPOWER MANUFACTURING MANUFACTURING INDUSTRY MARKETING MATERIAL MEDIUM ENTERPRISES MOTIVATION MULTI-PLANT FIRMS NEW TECHNOLOGY OPEN ACCESS ORDER MANAGEMENT PERFORMANCE MEASURES POLITICAL ECONOMY PRESENT STUDY PREVIOUS WORK PRIMARY REASON PRIVATE FIRMS PRIVATE SECTOR PRIVATE SECTOR DEVELOPMENT PRODUCT INNOVATION PRODUCTION PROCESS PRODUCTIVE FIRMS PRODUCTIVITIES PRODUCTIVITY PRODUCTIVITY DISPERSION QUALITY MANAGEMENT RESULT RESULTS RETENTION SAFETY SAFETY REGULATIONS SCIENCE FOUNDATION SET OF STANDARD SKILL-BIASED TECHNOLOGIES SKILLED LABOR SKILLED WORKERS TARGETS TELEPHONE TEXTILES TOTAL EMPLOYMENT TOTAL WAGE TRAINING PLAN TRAINING PROGRAMS USES WAGE BILL WAGE INEQUALITY WAGE LEVEL WAGE RATES WAGES WEB WORKER WORKPLACE ORGANIZATION A long-standing question in social science is to what extent differences in management cause differences in firm performance. To investigate this, the authors ran a management field experiment on large Indian textile firms, providing free consulting on modern management practices to a randomly chosen set of treatment plants and compared their performance to the control plants. They find that adopting these management practices had three main effects. First, it raised average productivity by 11 percent through improved quality and efficiency and reduced inventory. Second, it increased decentralization of decision making, as better information flow enabled owners to delegate more decisions to middle managers. Third, it increased the use of computers, necessitated by the data collection and analysis involved in modern management. Since these practices were profitable this raises the question of why firms had not adopted these before. Their results suggest that informational barriers were a primary factor in explaining this lack of adoption. Modern management is a technology that diffuses slowly between firms, with many Indian firms initially unaware of its existence or impact. Since competition was limited by constraints on firm entry and growth, badly managed firms were not rapidly driven from the market. 2012-03-19T18:00:38Z 2012-03-19T18:00:38Z 2011-02-01 http://www-wds.worldbank.org/external/default/main?menuPK=64187510&pagePK=64193027&piPK=64187937&theSitePK=523679&menuPK=64187510&searchMenuPK=64187283&siteName=WDS&entityID=000158349_20110223131540 http://hdl.handle.net/10986/3340 English Policy Research working paper ; no. WPS 5573 CC BY 3.0 IGO http://creativecommons.org/licenses/by/3.0/igo/ World Bank Publications & Research :: Policy Research Working Paper South Asia South Asia South Asia Asia India |
| repository_type |
Digital Repository |
| institution_category |
Foreign Institution |
| institution |
Digital Repositories |
| building |
World Bank Open Knowledge Repository |
| collection |
World Bank |
| language |
English |
| topic |
ACCOUNTING ACTION PLAN BEST PRACTICES BEST-PRACTICE BUSINESSES COBB-DOUGLAS PRODUCTION FUNCTION COMPUTER USERS COMPUTERS CONTROL SYSTEMS CORPORATE POLICY DECENTRALIZATION DEVELOPMENT ECONOMICS DOMESTIC MARKET DOWNWARD BIAS ECONOMIC GROWTH ECONOMICS EFFICIENCY IMPROVEMENTS EMPLOYEE EMPLOYMENT ENTERPRISE RESOURCE PLANNING EQUIPMENT ESTIMATED PRODUCTIVITY EXCLUSION RESTRICTION EXTERNAL CONSULTANTS FARMERS FINANCIAL CONSTRAINTS FINANCIAL SUPPORT FIRM ENTRY FIRM GROWTH FIRM LEVEL FIRM PERFORMANCE FIRM SIZE FIRM TURNOVER FIRM-LEVEL PRODUCTIVITIES FLOW CHART HUMAN RESOURCE HUMAN RESOURCE MANAGEMENT IMPACT ASSESSMENTS IMPLEMENTATION PERIOD IMPLEMENTATION STAGE INCOME INCOME INEQUALITY INDUSTRIAL DEVELOPMENT INDUSTRIAL RELATIONS INDUSTRY PRODUCTIVITY INFORMATION FLOW INFORMATION TECHNOLOGY INNOVATION INTERNATIONAL CONSULTANTS INTERNATIONAL STANDARDS INVENTORIES INVENTORY INVENTORY LEVELS INVENTORY MANAGEMENT LABOR ECONOMICS LABOR MARKETS LABOR PRODUCTIVITY LABOR REGULATIONS LABOR RELATIONS LEGAL ENVIRONMENT LOCAL FIRMS MANPOWER MANUFACTURING MANUFACTURING INDUSTRY MARKETING MATERIAL MEDIUM ENTERPRISES MOTIVATION MULTI-PLANT FIRMS NEW TECHNOLOGY OPEN ACCESS ORDER MANAGEMENT PERFORMANCE MEASURES POLITICAL ECONOMY PRESENT STUDY PREVIOUS WORK PRIMARY REASON PRIVATE FIRMS PRIVATE SECTOR PRIVATE SECTOR DEVELOPMENT PRODUCT INNOVATION PRODUCTION PROCESS PRODUCTIVE FIRMS PRODUCTIVITIES PRODUCTIVITY PRODUCTIVITY DISPERSION QUALITY MANAGEMENT RESULT RESULTS RETENTION SAFETY SAFETY REGULATIONS SCIENCE FOUNDATION SET OF STANDARD SKILL-BIASED TECHNOLOGIES SKILLED LABOR SKILLED WORKERS TARGETS TELEPHONE TEXTILES TOTAL EMPLOYMENT TOTAL WAGE TRAINING PLAN TRAINING PROGRAMS USES WAGE BILL WAGE INEQUALITY WAGE LEVEL WAGE RATES WAGES WEB WORKER WORKPLACE ORGANIZATION |
| spellingShingle |
ACCOUNTING ACTION PLAN BEST PRACTICES BEST-PRACTICE BUSINESSES COBB-DOUGLAS PRODUCTION FUNCTION COMPUTER USERS COMPUTERS CONTROL SYSTEMS CORPORATE POLICY DECENTRALIZATION DEVELOPMENT ECONOMICS DOMESTIC MARKET DOWNWARD BIAS ECONOMIC GROWTH ECONOMICS EFFICIENCY IMPROVEMENTS EMPLOYEE EMPLOYMENT ENTERPRISE RESOURCE PLANNING EQUIPMENT ESTIMATED PRODUCTIVITY EXCLUSION RESTRICTION EXTERNAL CONSULTANTS FARMERS FINANCIAL CONSTRAINTS FINANCIAL SUPPORT FIRM ENTRY FIRM GROWTH FIRM LEVEL FIRM PERFORMANCE FIRM SIZE FIRM TURNOVER FIRM-LEVEL PRODUCTIVITIES FLOW CHART HUMAN RESOURCE HUMAN RESOURCE MANAGEMENT IMPACT ASSESSMENTS IMPLEMENTATION PERIOD IMPLEMENTATION STAGE INCOME INCOME INEQUALITY INDUSTRIAL DEVELOPMENT INDUSTRIAL RELATIONS INDUSTRY PRODUCTIVITY INFORMATION FLOW INFORMATION TECHNOLOGY INNOVATION INTERNATIONAL CONSULTANTS INTERNATIONAL STANDARDS INVENTORIES INVENTORY INVENTORY LEVELS INVENTORY MANAGEMENT LABOR ECONOMICS LABOR MARKETS LABOR PRODUCTIVITY LABOR REGULATIONS LABOR RELATIONS LEGAL ENVIRONMENT LOCAL FIRMS MANPOWER MANUFACTURING MANUFACTURING INDUSTRY MARKETING MATERIAL MEDIUM ENTERPRISES MOTIVATION MULTI-PLANT FIRMS NEW TECHNOLOGY OPEN ACCESS ORDER MANAGEMENT PERFORMANCE MEASURES POLITICAL ECONOMY PRESENT STUDY PREVIOUS WORK PRIMARY REASON PRIVATE FIRMS PRIVATE SECTOR PRIVATE SECTOR DEVELOPMENT PRODUCT INNOVATION PRODUCTION PROCESS PRODUCTIVE FIRMS PRODUCTIVITIES PRODUCTIVITY PRODUCTIVITY DISPERSION QUALITY MANAGEMENT RESULT RESULTS RETENTION SAFETY SAFETY REGULATIONS SCIENCE FOUNDATION SET OF STANDARD SKILL-BIASED TECHNOLOGIES SKILLED LABOR SKILLED WORKERS TARGETS TELEPHONE TEXTILES TOTAL EMPLOYMENT TOTAL WAGE TRAINING PLAN TRAINING PROGRAMS USES WAGE BILL WAGE INEQUALITY WAGE LEVEL WAGE RATES WAGES WEB WORKER WORKPLACE ORGANIZATION Bloom, Nicholas Eifert, Benn Mahajan, Aprajit McKenzie, David Roberts, John Does Management Matter? Evidence from India |
| geographic_facet |
South Asia South Asia South Asia Asia India |
| relation |
Policy Research working paper ; no. WPS 5573 |
| description |
A long-standing question in social
science is to what extent differences in management cause
differences in firm performance. To investigate this, the
authors ran a management field experiment on large Indian
textile firms, providing free consulting on modern
management practices to a randomly chosen set of treatment
plants and compared their performance to the control plants.
They find that adopting these management practices had three
main effects. First, it raised average productivity by 11
percent through improved quality and efficiency and reduced
inventory. Second, it increased decentralization of decision
making, as better information flow enabled owners to
delegate more decisions to middle managers. Third, it
increased the use of computers, necessitated by the data
collection and analysis involved in modern management. Since
these practices were profitable this raises the question of
why firms had not adopted these before. Their results
suggest that informational barriers were a primary factor in
explaining this lack of adoption. Modern management is a
technology that diffuses slowly between firms, with many
Indian firms initially unaware of its existence or impact.
Since competition was limited by constraints on firm entry
and growth, badly managed firms were not rapidly driven from
the market. |
| format |
Publications & Research :: Policy Research Working Paper |
| author |
Bloom, Nicholas Eifert, Benn Mahajan, Aprajit McKenzie, David Roberts, John |
| author_facet |
Bloom, Nicholas Eifert, Benn Mahajan, Aprajit McKenzie, David Roberts, John |
| author_sort |
Bloom, Nicholas |
| title |
Does Management Matter? Evidence from India |
| title_short |
Does Management Matter? Evidence from India |
| title_full |
Does Management Matter? Evidence from India |
| title_fullStr |
Does Management Matter? Evidence from India |
| title_full_unstemmed |
Does Management Matter? Evidence from India |
| title_sort |
does management matter? evidence from india |
| publishDate |
2012 |
| url |
http://www-wds.worldbank.org/external/default/main?menuPK=64187510&pagePK=64193027&piPK=64187937&theSitePK=523679&menuPK=64187510&searchMenuPK=64187283&siteName=WDS&entityID=000158349_20110223131540 http://hdl.handle.net/10986/3340 |
| _version_ |
1764386821886705664 |