43 Pages Posted: 9 May 2017
Date Written: May 6, 2017
Management styles and practices are important determinants of firm performance. Yet, substantial variation exists across organizations with regards to management, suggesting frictions in the broader diffusion of management knowledge. We argue that peer networks may allow for the diffusion of productive management across firms. Using a randomized field experiment with 100 high-growth technology firms, we show that founders who received advice from other founders with more “hands-on” management styles were more likely to reorient their own management activity, and subsequently experience lower employee attrition and higher rates of firm survival eight months after the intervention. For founders who already had a more hands-on management style themselves, these interactions also increase top-line employee growth via an increase in hiring rates. Our study demonstrates management can indeed diffuse across young firms via networks, though the process might be uneven and slow in practice.
Keywords: Entrepreneurship, Field Experiments, Peer Effects, Management
Suggested Citation: Suggested Citation
Chatterji, Aaron and Delecourt, Solene and Hasan, Sharique and Koning, Rembrand, Learning to Manage: A Field Experiment in the Indian Startup Ecosystem (May 6, 2017). Harvard Business School Strategy Unit Working Paper; Stanford University Graduate School of Business Research Paper No. 17-35. Available at SSRN: https://ssrn.com/abstract=2964249 or http://dx.doi.org/10.2139/ssrn.2964249