management and productivity global study rebecca homkes lse and centre for economic performance 2010...
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MANAGEMENT AND PRODUCTIVITY GLOBAL STUDY
Rebecca Homkes
LSE and Centre for Economic Performance 2010
Management Matters
2
WHY CARE ABOUT MANAGEMENT AND PRODUCTIVITY
Despite the importance of productivity, our understanding of what causes productivity differences is poor:
• Even after controlling for human and physical capital, there is a large “unexplained residual” in productivity across firms, both between countries and within countries
Productivity stories across the US, Europe and Asia:
• Is the US productivity miracle due to the information & communication technology revolution? But this is common across the world: What explains the US takeoff?
• Why do others lag?Could this be in part because of differences in management?
Historically there has been no international management data
Our approach Role of management practices?
6 year Centre for Economic Performance & McKinsey project to try to measure and explain management practices
3
AGENDA
Measuring management practices
Evaluating the management measure
Describing management across firms and countries
Explaining management across firms and countries
Future research and key takeaways
4
ASSESSING MANAGEMENT PRACTICE
Scoring management practice
• Created a robust assessment tool to score management of operations, people and performance
Obtaining unbiased responses
• Conducted ‘Double-blind’ interviews– Managers unaware of the scoring methodology– Interviewers unaware of corporate performance
• Executed by >50 MBA/ PhD trained interviewers with business experience
Getting firms to participate
• Obtained Central Bank, Ministry and Employer Association endorsements
• Managers ensured confidentiality
Setting the sampling frame
• 9,000 + medium sized* manufacturers across the US, Asia, Europe Latin America and Australia – Medium sized as intra-firm practices more homogeneous– Manufacturing as productivity easier to measure
*Median ~250 employees
5
INTERVIEW METHOD FOCUSES ON MAIN AREAS OF MANAGEMENT
Processes and behaviours that: • Optimise production lines• Create maximal value from
physical assets
Processes and behaviours that:• Optimise quality of
workforce• Maximise human capital
Processes and goals that:• Mesh physical and human
aspects of business
• Align efforts of the whole organisation
Performance and target
management
Talent management
Lean operations
Interviews of about 45 minutes were conducted to examine managerial practices in three main areas
6
TO SCORE COMPANIES, WE USED DESCRIPTIONS OF POOR, AVERAGE AND GOOD PRACTICE FOR EACH DIMENSION
Dimension scoring criteria
Example dimensionsevaluated
Quality of targets
Interconnection of targets
Consequencemanagement
Performance tracking
People management
Management practices
Operations management
Performance management
Time horizon of targets
Measures tracked do not directly indicate if overall business objectives are being met. Tracking is ad hoc
1
Most key performance indicators are tracked formally. Tracking is overseen by senior management
3
Performance is continuously tracked and communicated, formally and informally, to all staff, using a range of visual management tools
5
7
TO GENERATE THE OVERALL MANAGEMENT SCORE WE TOOK THE AVERAGE OF ALL 18 DIMENSIONS MEASURED
Perform-ance and target manage-ment
Talent manage-ment
Lean shop-floor operations
Dimensions Score
Overall management score, on scale of 1–5, is calculated from average of all 18 dimensions
1. Introduction of lean manufacturing
2. Degree of lean principles used
3. Documentation and improvement of processes
4. Performance tracking
5. …
2
3
2
3
4
7. Consequence management
8. Quality of targets
9. Target stretch
10. Clarity of goals and measurement
11. …
3
2
3
3
13. Importance of human capital
14. Reward of high performers
15. Rewarding poor performers
16. Promoting high performers
17. …
3
4
3
4
5
8
Manufacturing firms with 100 (50)-5000 employees
Scope
Identify formal universe
Conduct Interviews
Confirm eligible firms
Verify sample is representative
Defined as manufacturing firms from ORBIS databases
Confirmed if currently operating with manufacturing facility in country of focus
Schedule interviews directly
Compare distribution of firms with eligible universe on key dimensions
ResultApproach
WE DEFINE SAMPLE FIRMS FOR STUDY AND THEN NARROW TO ONLY ELIGIBLE MANUFACTURING PLANTS
9
THE DATABASE NOW CONTAINS OVER 8,500 INTERVIEWS* ACROSS 20 COUNTRIES
* This presentation uses a sample of companies with 50 to 4999 employees; total number of interviews exceeds 5,000 firmsSource: Data collected from interviews as of September 2008; team analysis
Number of interviews - by country
124130
164
169177
187205
238
285323
351421
470
541595
642751US
Canada
GB06
Brazil
China
India
Germany
France
Sweden
Poland
Italy
Greece
Portugal
GB08
ROI
NIJapan
Note: Chart not updated to reflect 20010 countries surveyed
10
AGENDA
Measuring management practices
Evaluating the management measure
Describing management across firms and countries
Explaining management across firms and countries
Future research and key takeaways
11
1st analyst (interviewer)
Correlation of
0.63
ASSESSMENT TOOL CONTINUES TO PROVE ROBUST
Assessed management practice score
2nd analyst (silent listener)
12
34
5
1 2 3 4 52 management
1 management Fitted values
Correlation of
0.92
Source: Data collected from interviews as of September 2008; team analysis
12* 222 firms interviewed by 2 different interviewers, interviewing 2 different managers
Source: Data collected from interviews as of September 2008; team analysis
1
2
3
4
5
1 2 3 4 5
1st interview
Correlation of
0.63
FURTHER INTERNAL VALIDATION SUGGESTS THAT OUR ASSESSED MANAGEMENT PRACTICE SCORE IS INFORMATIVE
2nd interview
Assessed management practice score*
13
4
5
6
7
1 2 3 4 5
Assessed management practice score**
Labour productivity*
* Log scale
** Firms are grouped in 0.5 increments of assessed management score
THE ASSESSED MANAGEMENT PRACTICE SCORE CORRELATES WELL WITH A NUMBER OF FINANCIAL PERFORMANCE METRICS
5
10
15
20
1 2 3 4 5
Assessed management practice score**
ROCE (%)
5
10
15
20
1 2 3 4 5
Assessed management practice score**
Sales growth (%)
14 * Log scale
** Firms are grouped in 0.5 increments of assessed management score
4.0
4.5
5.0
5.5
6.0
6.5
1 2 3 4 5
Assessed management practice score**
Labour productivity*
THIS LINK HOLDS TRUE ACROSS DIFFERENT COUNTRIES AND CULTURES
4
5
6
7
1 2 3 4 5
Assessed management practice score**
Labour productivity*
2
3
4
5
6
7
1 2 3 4 5
Assessed management practice score**
Labour productivity*
4.5
5.0
5.5
6.0
6.5
1 2 3 4 5
Assessed management practice score**
Labour productivity*
US UK
FR
SE
DE
PL
IT
CN JP
PT
GR
15
AGENDA
Measuring management practice
Evaluating the management measure
Describing management across firms and countries
Explaining management across firms and countries
Future research and key takeaways
16
WE FOUND THERE IS SUBSTANTIAL INTER-COUNTRY MANAGEMENT PRACTICE VARIABILITY
2.6 2.8 3 3.2 3.4mean of management
USGermany
SwedenJapan
CanadaFrance
ItalyGreat Britain
AustraliaNorthern Ireland
PolandRepublic of Ireland
PortugalBrazilIndia
ChinaGreece
Average Country Management Score
Not statist-ically different
3 distinct groups appear
• US, Germany, Sweden and Japan
• France, UK, Italy, Poland and Portugal
• Brazil, Greece, China and India
17
3.35274
3.23222
3.21523
3.18662
3.13119
3.0418
3.02118
3.01974
3.01323
2.93004
2.91961
2.89741
2.89088
2.88944
2.85492
2.84222
2.81975
2.74862
2.70164
2.69315
2.65141
2 2.5 3 3.5 4Overall Management Scores
usjp
gesecagbaufrit
nzgrnipl
mxptirclarcnbrin
17
AND THIS HOLDS ACROSS OUR UPDATED SURVEY WAVE AS WE EXPANDED INTO NEW COUNTRIES
1074
176
414
353
344
1021
380
520
272
108
380
88
351
166
252
100
274
206
717
556
788
# of obs# of obs
18
MANAGEMENT PRACTICES VARY MUCH MORE WITHIN THAN ACROSS COUNTRIES …..……
Firm-Level Management Scores
0.5
10
.51
0.5
10
.51
1 2 3 4 5 1 2 3 4 5 1 2 3 4 5 1 2 3 4 5
Australia Brazil Canada China
France Germany Great Britain Greece
India Ireland Italy Japan
Poland Portugal Sweden US
De
nsi
ty
managementGraphs by country1
19
…..AND WHILE CERTAIN COUNTRIES SHOW HIGH LEVEL OF UPPER PERFORMERS, THERE IS A LONG TAIL OF UNDERPERFORMERS IN OTHERS
Distribution of firm level Management Practice scores – by country
Source: Interview data as of October 2008; team analysis
19% of firms
7% of firms
1.9% of firms
12% of firms
Global GermanySweden Japan GB
France PortugalItaly Poland Greece
China NIIndia ROI U.S.
20
THIS LONG ‘TAIL’ OF POORLY MANAGED FIRMS PULLS DOWN THE AVERAGE MANAGEMENT SCORE OF LOW PERFORMING COUNTRIES
Assessed management practice score – by country
Average score for all firms
Score excluding firms scoring <2
2.70
2.84
2.90
2.91
3.00
3.00
3.02
3.07
3.08
3.08
3.17
3.19
3.20
3.33
2.63
2.60
2.74
2.64
2.88
2.77
2.85
2.97
2.98
2.99
3.15
3.16
3.17
3.30US
Germany
Sweden
Japan
France
Italy
Great Britain
China
NI
ROI
Poland
Greece
India
Portugal
21Source:Data collected during interviews as of October 2008; team analysis
ALTHOUGH THE US IS DISTINCTIVE IN PEOPLE MANAGEMENT, SWEDISH FIRMS OUTPERFORM IN OPERATIONS
Average practice score
People management Operations management Target management
Greece 2.58
Portugal 2.59
India 2.71
China 2.71
France 2.75
ROI 2.77
Italy 2.78
Sweden 2.79
Japan 2.84
NI 2.88
Great Britain 2.89
Germany 2.92
Poland 2.93
U.S. 3.27
India 2.20
China 2.49
Poland 2.64
ROI 2.70
Greece 2.72
NI 2.83
Portugal 2.85
Great Britain 2.91
France 3.04
Italy 3.13
Japan 3.20
U.S. 3.25
Germany 3.28
Sweden 3.28
2.50India
2.44China
Greece 2.55
ROI 2.67
Portugal 2.68
NI 2.73
Poland 2.87
Great Britain 2.87
Italy 2.97
France 2.98
Japan 3.17
Germany 3.17
U.S. 3.18
Sweden 3.24
22
In the second phase of our interviews, we asked questions about firms’ organisational aspects:
Firm slope and span–Number of layers below and above plant manager–Changes in layers in the last three years–Span of control (How many people report directly to the plant manager?)
Plant managers:–Hiring and firing autonomy –Introduction of new products–Maximum capital expenditures without signoff from corporate HQ–Sales and marketing autonomy
Workers:•Who sets the pace of work?•Who decides how tasks are allocated?
Autonomy
Hierarchical Structure
ORGANISATIONAL PRACTICES ACROSS COUNTRIES VARY AS WELL
23
Average managerial hours/week Average non-managerial hours/week
THE HOURS WORKED BY BOTH MANAGERS AND WORKERS VARIES ACROSS COUNTRIES SURVEYED
Source: Data collected from interviews as of September 2008; team analysis
54.5India52.5Italy52.0Germany51.5Greece51.1
Ø 49.7
50.8Japan50.6US
49.1China48.6Poland48.2ROI47.5Sweden47.0NI46.7Great Britain45.7France
Portugal
52.5India47.4China46.5Japan
44.8US41.7Portugal41.1NI41.1Great Britain41.1Poland41.0ROI
Ø 42.4
Italy40.6Greece40.0
41.0
39.2Germany35.9France
Sweden
Comparison of managerial and non-managerial work-hours per week – by country
24
AS DOES THE GAP BETWEEN MANAGER AND NON-MANAGER WORKING HOURS
12.88
11.75
10.75
10.07
9.43
7.66
7.29
5.56
5.38
4.20
3.00
-2.16
Poland
Portugal
France
China
India
Japan
UK
US
Sweden
Greece
Germany
Italy
Gap between manager and non-manager hours – by country
Source: Data collected from interviews as of September 2008 team analysis
25
Average duration of interview
AND THE INDIANS ARE WILLING TO TALK FOR AN ABOVE AVERAGE PERIOD OF TIME (AS ARE THE MOST ASIAN FIRMS…)
62
58
58
56
54
52
50
50
50
48
48
48
47
46
46
45
45
Source: Data collected during interviews as of September 2008; Team analysis
India
Great Britain 06
Germany
France
Italy
US
China
Poland
Canada
Greece
Great Britain 08
Northern Ireland
Republic of Ireland
Portugal
Sweden
Japan
Brazil
26
AGENDA
Measuring management practices
Evaluating the management measure
Describing management across firms and countries
Explaining management across firms and countries
Future research and key takeaways
27
• Competition and international presence
• MNE (and their presence)
• Firm size
• Ownership
• Skills level
• Management selection/ appointment
• Labour rigidity
Identify main findings and gaps between best and worst practice
Structural and conduct factors
Possible
impact?
WE OBSERVE SEVEN STRUCTURE AND CONDUCT FACTORS THAT INFLUENCE THE IMPACT OF MANAGEMENT PRACTICES
28
2.5
2.6
2.7
2.8
2.9
3.0
3.1
3.2
3.3
3.4
3.5
0 2 4 6 8 10
Assessed management practice score
Reported number of competitors
MORE INTENSE COMPETITION IS CLEARLY ASSOCIATED WITH BETTER MANAGEMENT PRACTICES
Correlation of 0.854
Source: Data collected from interviews as of September 2007; team analysis
29
2.4 2.6 2.8 3 3.2 3.4
USJapan
SwedenGermany
CanadaAustralia
ItalyGreat Britain
FrancePoland
Northern IrelandRepublic of Ireland
IndiaChina
PortugalBrazil
Greece
MULTINATIONALS ARE WELL RUN EVERYWHERE
Average Management Score
Foreign multinationalsDomestic firms
30
Domestic Firms
Foreign Multinationals
Distribution of management scores*
0.2
.4.6
.8
De
nsity
1 2 3 4 5
0.2
.4.6
.8
Den
sity
1 2 3 4 5
*Note: Based on giving an approximate overall score to each firms interview response.
AND THERE IS NO TAIL OF REALLY BADLY RUN MULTINATIONALS
Source: Data collected from interviews as of September 2007; team analysis
31
2.4
2.5
2.6
2.7
2.8
2.9
3.0
3.1
3.2
3.3
0 5 10 15 20 25 30 35 40 45 50 55 60 65 70
Mean management practice score – domestic firms, by country
Share of MNEs in country, %
China Greece
India
NIPortugal ROI
Poland France
Great Britain
Italy
GermanyJapan Sweden
US
WE ALSO FIND A LINK BETWEEN MORE MNEs IN A COUNTRY AND IMPROVED MANAGEMENT PRACTICES AT DOMESTIC FIRMS
Source:Interview data as of October 2008; team analysis
32
2.5
2.7
2.9
3.1
3.3
3.5
3.7
3.9
0 500 1000 1500 2000 2500
Employees
Assessed management practice score
2.5
2.6
2.7
2.8
2.9
3.0
3.1
3.2
0 100 200 300 400 500 600
Employees
Assessed management practice score
Full survey
* Lowess regression fit; Size significant with step-wise linear regression, cut-off point 500 employeesSource: Data collected from interviews as of Jan 15, 2007; team analysis
Full survey
Firm size vs. assessed management practice score*
MANAGEMENT INCREASES WITH SIZE BUT SLOWS AT 500 EMPLOYEES …
33
0.4
0.5
0.6
0.7
0.8
0 500 1000 1500 2000 2500 3000 3500 4000 4500
Employees
Standard deviation* of management practiceFull survey
.
Variation in firms’ management practice vs. assessed management practice score**
* Note that decreasing variance may well be a purely statistical effect (“fringe effect”) due to limitation within 1-5 band** Lowess fit
Source: Data collected from interviews as of January 15, 2007; team analysis
…BEYOND ~500 EMPLOYEES FIRMS OF SIMILAR SIZE SHOW REDUCED VARIATION IN THEIR MANAGEMENT PRACTICE
34
Average Management Practice score by ownership type, controlled for size
MANAGEMENT PRACTICES TO VARY SUBSTANTIALLY BY OWNERSHIP TYPE
2.48
2.65
2.65
2.85
2.88
2.89
2.99
3.07
3.14
3.17
Founder CEO
Government
Dispersed ownership
Family, CEO External
Other
Managers
Private individuals
Founder, External CEO
Family CEO
Family CEO, Primo Geniture*
*Firms which appoint their eldest child as CEO
Source:Data collected from interviews as of October 2008; team analysis
35
0.5
10
.51
0.5
1
1 2 3 4 5 1 2 3 4 5 1 2 3 4 5
Dispersed Shareholders Family, external CEO Family, family CEO
Founder Government Managers
Other Private Equity Private Individuals
Density PEy
Graphs by Who owns the firm?
FIRMS WITH PROFESSIONAL CEOS ARE TYPICALLY WELL RUN. GOVERNMENT, FOUNDER, FAMILY MANAGED FIRMS ARE NOT
Distribution of firm management scores by ownership. Overlaid dashed line is approximate density for dispersed shareholders, the most common US and Canadian ownership type
Average Management Score
36
0 .2 .4 .6 .8
IndiaGreece
PortugalBrazil
ItalyNorthern Ireland
Republic of IrelandGreat Britain
ChinaGermanyAustraliaCanadaPolandFrance
USJapan
Sweden
mean of family mean of foundermean of government
ONWERSHIP PATTERNS OF THESE “POOR MANAGEMENT” GROUPS VARY SUBSTANTIALLY ACROSS COUNTRIES
share family CEO
share founder CEO (1st generation)
share government owned
Share of ownership (for types associated with low management scores)
37
BETTER MANAGEMENT IS ALSO LINKED WITH HIGHER SKILL LEVELS OF BOTH MANAGERS AND NON-MANAGERS
5
6
11
12
15
20
20
25
Degree educated non-managers, %
Degree educated managers,%
84
75
66
63
60
54
53
53 1.5
2.0
2.5
3.0
3.5
4.0
4.5
5.0
Management practice
score
38
Average share of managers with degree – by country
70.5Japan
69.5
66.3
65.1
59.6
49.2
50.9
51.6
59.5
41.7
42.5
46.6
51.9
Poland
Germany
Greece
US
France
Portugal
ROI
Italy
NI
Sweden
China
GB
Ø 57.7
Average share of non-managers with degree – by country
Ø 11.8
24.1Japan
15.6
Poland
Sweden
15.5
13.9Italy
13.9France
13.7US
11.4Germany
10.4ROI
8.6China
8.5GB
6.3
6.0
3.5
NI
Greece
Portugal
ONE KEY DRIVER OF THE UK AVERAGE MANAGEMENT SCORE IS ITS RELATIVELY LOW SKILL LEVELS
39
ChinaFrance
Germany
ROI
Greece
10045 50 55 60 65 70 75 80 85 90 95
Employment flexibility*
0
2.6
2.7
GB2.9
3.0
3.1
3.2
3.3
People Management Practice score
US
0
Sweden
NI**
Portugal
Poland
JapanItaly
India
2.8
*100 minus the World Bank ‘Employee rigidity index’
**Assumed NI labour productivity same as Great Britain
Source: Data collected from interviews as of September 2008, World Bank; team analysis
Labour market rigidity index* vs people Management Practice score – By country
COUNTRIES WITH MORE FLEXIBLE LABOUR MARKETS HAVE BETTER PEOPLE MANAGEMENT SCORES
40
Ave
rag
e o
per
atio
ns
man
agem
ent
sco
re*
…BUT, LABOUR MARKET REGULATION IS NOT LINKED WITH POOR OPERATIONS MANAGEMENT
World Bank labour market regulation index
*Note: Based on giving an approximate overall score to each firms interview response.
(0 = Most flexible labour market) 100 = Most rigid labour market)
Note: Includes updated data as of 3 October 2007
Correlation of -0.015
41
Average Management Practice score, controlled for size and SIC code
Source:Data collected from interviews as of October 2008; team analysis
2.65
ROI
2.77
NI
2.69
GB
2.85
ROI
2.97
NI
2.89
GB
2.55
ROI
2.67
NI
2.60
GB
Exporter
Non-exporter
Domestic MNE
Exporting firms exhibit better Management Practice than
firms serving only the local market
MNEs have better Management Practice than domestic firms
2.94
ROI
3.06
NI
2.98
GB
~0.40 increase in score
COMPETITION AND INTERNATIONAL PRESENCE INCREASE THE LEVEL OF MANAGEMENT PRACTICES
42
WE CONTINUE TO SEE THAT GOOD MANAGEMENT IS CORRELATED WITH RAPID CHANGES IN A MANAGERS’ ROLE, BUT NOT TENURE IN COMPANY
*Only companies with 50 to 4999 employees, bucketed by overall scores in 0.5 increments
Source: ROI and NI data collected from interviews as of September 15, 2008
Tenure in company
0
1
2
3
4
5
6
0 2 4 6 8 10 12 14
2
Tenure in position
Assessed score
1742
59 5848
213
3
0
1
2
3
4
5
6
0 2 4 6 8 10 12 14 16 18
Assessed score
1742
5958
48
21 3
23
• Firms whose managers have shorter tenure in current role received higher average scores
• However, there is no strong correlation between a manager’s tenure in a firm and their average scores
Assessed score, tenure in years
43
AGENDA
Measuring management practices
Evaluating the management measure
Describing management across firms and countries
Explaining management across firms and countries
Future research and key takeaways
44
GLOBALLY, THE EFFECT OF IMPROVING MANAGEMENT IS LARGE COMPARED TO INVESTING IN LABOUR OR CAPITAL
1point
65%
Management practice
Capital
* Independent of sector, ownership type, profitability, past productivity growth, size
Source: Data collected from interviews as of October 2008; team analysis
Labour
25% • Improving management practice is a highly leveraged means of getting more output from the firms existing – Labour – Capital
• This is true for all companies* irrespective of the quality of current management practices
Output
Effect* of increased factor inputs on output
45
Dependency of management score (% of variance)
2
21
42
58
Country Manufacturing sub-sector
Sub-sector/ country combination
Companymanagers
Managers’ choices determine over half a company’s management practice score
EXAMPLE ONLY
THESE DIFFERENCES IN MANAGEMENT PRACTICE ARE DUE TO THE CHOICES INDIVIDUAL MANAGERS MAKE
46
WHILE THE AVERAGE MANAGER THINKS THAT HIS OR HER FIRM’S MANAGEMENT IS WELL-ABOVE AVERAGE
0.1
.2.3
Den
sity
1 2 3 4 5 6 7 8 9 10
Management self-score
“Average”“Worst
Practice”
“Best Practice”
Sh
are
of f
irms
Response to the Question “Excluding yourself, how would
you rate your company’s management
from 1 to 10, one being the worst and ten being the best?”
47
2.4 2.6 2.8 3 3.2 3.4 3.6 3.8
US
Germany
Sweden
Japan
UK
France
Italy
Poland
Portugal
Greece
China
India
mean of management mean of selfscore
Average score on 18 management practice questions and self-assessed management score, by country
Self-Assessed Management
Our Management Score
Note: Scores are divided by 2 to put them on the same scale as our management scores
Average self-assessed management in China and India
THE REALITY IS THAT MANAGEMENT PRACTICES VARY SUBSTANTIALLY ACROSS COUNTRIES
48
0 .5 1 1.5mean of gap
BrazilGreece
IndiaPortugal
ChinaRepublic of Ireland
Northern IrelandAustraliaCanada
ItalyGreat Britain
PolandGermany
JapanSwedenFrance
US
THIS BRAZILIANS OVER-SCORED THE MOST AND THE AMERICANS THE LEAST
Self score (normalized to 1 to 5 scale) – Management score
49
Management score ILLUSTRATIVE
Lean shop-floor operations
Performance and target management
Talent management
Targeted interventions
Focus on key areas to improve• Consistency of
management practice
• Average management score
• Associated performance– ROCE– Productivity– Growth– Market
capitalisation
Management practice score
FOR FIRMS, OUR ASSESSMENT AND TOOLS CAN HIGHLIGHT THE AREAS FOR TARGETED IMPROVEMENTS TO INCREASE PERFORMANCE
50
• Substantial intra-country variation in management practice
• Our assessment of management practice is clearly correlated with corporate performance, both when measured in productivity and financial returns
• Firm ownership is a key driver of management practice variation
• Relative to domestic firms, foreign multinationals are better managed and more likely to be amongst a country’s best-managed firms
• Higher levels of competition correlates with better management practice
• Managers’ perceptions of their own management practice does not correlate with either their assessed management practice nor with their firms’ performance
Created a robust assessment tool to score management across 5,000 companies in 15 countries
KEY INSIGHTS:
MANAGEMENT PROJECT ALLOWS US TO EXPLORE AND ANALYSE DIFFERENCES ACROSS FIRMS AND COUNTRIES
51
CONCLUSIONS
• Some can thrive even in tough conditions
• Self- assessment may be poor
• Meritocratic CEO selection important
For Businesses
• Competition vital• Ownership • Skills• International competitors
catching up fast
For Policy makers
52
THESE MANAGERS SHARED SEVERAL MEMORABLE QUOTES
French secretary: “You want to talk to the plant manager? There are legal proceedings against him, so hurry up !!”
Production manager: “Workers individual goals? They just want to go home!”
Swedish manufacturing goals…
Americans on Geography…
Interviewer: “How many production sites do you have abroad?
Manager in Indiana, US: “Well…we have one in Texas…”
53
… AND DURING OUR IRISH INTERVEWS, WE’VE ALREADY HEARD SOME GREAT QUOTES ….
Money’s a sensitive topic to the Irish….
Interviewer: “Would you mind if I asked how much your bonus is as a manager?”Irish manager: “I don't even tell my wife how much my bonus is!”Interviewer: “Probably the right decision...”
No fault attrition…
Interviewer: “Have any managers left within the last 12 months?”Irish manager: “One died…”Interviewer: “I won’t count that one.”Irish manager: “And one fell in love with a girl a long way away. So there was nothing I could do.”
Position fatigue in Ireland….
Interviewer : How long have you been with the company for?Irish manager: : 24 yearsInterviewer : Brilliant!Irish manager: : Brilliant? I’d be out of prison at this stage.
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… AND FINALLY, SOME MORE INTERESTING QUOTES
Production Manager: “I spend most of my time walking around cuddling and encouraging people - my staff tell me that I give great hugs”
Staff retention the American way
Production Manager: “We’re owned by the Mafia”Interviewer: “I think that’s the “Other” category……..although I guess I could put you down as an “Italian multinational” ?”
The difficulties of defining ownership in Europe
PM: We have no competitors, just parasites [Swedish female PM for medical instruments company with 70% of world market]
Competitive market in Sweden?
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REBECCA HOMKES
Permanent London contact:Project Director/ Engagement Consultant Centre for Economic Performance London School of Economics & Political ScienceHoughton Street, London WC2A 2AETEL: 44 (0)207 955 7803 (955 6848, FAX)[email protected] http://cep.lse.ac.uk/
MANAGEMENT MATTERS DIRECTOR / INT’L COORDINATOR
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KEY INSIGHTS EMERGING FROM CURRENT AND FUTURE RESEARCH EXPLORING MANAGEMENT AND PRODUCTIVITY
• Beginning to analyze role of national characteristics on organizational structures
• Initial data shows strong organizational similarities between firms originating from the same country, irrespective of firms’ location, sector or size
Also related to Manager Contact project
Initial progress and emerging insights
• Returns to IT are extremely variable and the key difference is the management and organisation of the firm
• Possible relationship between impact of IT and firm organisational structure
Impact of firm and plant organisational structure
Beyond a manufacturing focus…..
Role of IT
•Impact of environmental•Public sector focus – Retail sector
– Management matters currently being implemented in retail sector across Canada and US
– Transnational public private partnerships– Social care sector: Fostering agencies and care homes
– Management matters currently being implemented in retail sector across Canada and US