What drives differences in management practices?
Bloom, N., Brynjolfsson, E., Foster, L., Jarmin, R., Patnaik, M., Saporta-Eksten, I. & Van Reenen, J.
(2017).
What drives differences in management practices?
(CEP Discussion Papers 1470).
London School of Economics and Political Science. Centre for Economic Performance.
(2017).
What drives differences in management practices?
(CEP Discussion Papers 1470).
London School of Economics and Political Science. Centre for Economic Performance.
Partnering with the Census we implement a new survey of “structured” management practices in 32,000 US manufacturing plants. We find an enormous dispersion of management practices across plants, with 40% of this variation across plants within the same firm. This management variation accounts for about a fifth of the spread of productivity, a similar fraction as that accounted for by R&D, and twice as much as explained by IT. We find evidence for four “drivers” of management: competition, business environment, learning spillovers and human capital. Collectively, these drivers account for about a third of the dispersion of structured management practices.