Management Practices Across Firms and Countries

48 Pages Posted: 20 Feb 2012 Last revised: 3 Apr 2015

See all articles by Nicholas Bloom

Nicholas Bloom

Stanford University - Department of Economics; National Bureau of Economic Research (NBER)

Christos Genakos

Cambridge Judge Business School; Athens University of Economics and Business (AUEB); Center for Economic Policy Research (CEPR); Center for Economic Performance (CEP)

Raffaella Sadun

Harvard University - Strategy Unit; London School of Economics & Political Science (LSE) - Centre for Economic Performance (CEP); National Bureau of Economic Research (NBER); Centre for Economic Policy Research (CEPR)

John Van Reenen

London School of Economics - Centre for Economic Performance (CEP); Stanford Graduate School of Business; Institute for Fiscal Studies (IFS); Centre for Economic Policy Research (CEPR)

Date Written: February 2012

Abstract

For the last decade we have been using double-blind survey techniques and randomized sampling to construct management data on over 10,000 organizations across twenty countries. On average, we find that in manufacturing American, Japanese, and German firms are the best managed. Firms in developing countries, such as Brazil, China and India tend to be poorly managed. American retail firms and hospitals are also well managed by international standards, although American schools are worse managed than those in several other developed countries. We also find substantial variation in management practices across organizations in every country and every sector, mirroring the heterogeneity in the spread of performance in these sectors. One factor linked to this variation is ownership. Government, family, and founder owned firms are usually poorly managed, while multinational, dispersed shareholder and private-equity owned firms are typically well managed. Stronger product market competition and higher worker skills are associated with better management practices. Less regulated labor markets are associated with improvements in incentive management practices such as performance based promotion.

Suggested Citation

Bloom, Nicholas and Genakos, Christos and Sadun, Raffaella and Van Reenen, John Michael, Management Practices Across Firms and Countries (February 2012). NBER Working Paper No. w17850. Available at SSRN: https://ssrn.com/abstract=2007843

Nicholas Bloom (Contact Author)

Stanford University - Department of Economics ( email )

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Christos Genakos

Cambridge Judge Business School ( email )

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Center for Economic Performance (CEP) ( email )

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Raffaella Sadun

Harvard University - Strategy Unit ( email )

Harvard Business School
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London School of Economics & Political Science (LSE) - Centre for Economic Performance (CEP) ( email )

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National Bureau of Economic Research (NBER) ( email )

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Centre for Economic Policy Research (CEPR) ( email )

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John Michael Van Reenen

London School of Economics - Centre for Economic Performance (CEP) ( email )

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Centre for Economic Policy Research (CEPR)

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