Management Practices Matter!

An article from the Economist supports the view that management practices do matter.

“An intriguing new study by Nick Bloom and John Van Reenen, of the London School of Economics, and Stephen Dorgan, John Dowdy and Tom Rippin, all consultants at McKinsey……… based on interviews with managers at more than 730 manufacturing companies (none of them McKinsey clients), ranging from 50 employees to 10,000, in America, Britain, France and Germany…….[found that] …….Differences in management practices do seem to matter. The authors estimate that they account for 10-15% of the gap in total factor productivity (after stripping out differences in capital inputs) between American and British firms. And higher management-practice scores correlated with higher returns on capital employed, sales per employee, sales growth and growth in market share.”

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Tagged as: Management