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Centre for Economic Performance (CEP)

Management Practices and Organisational structures


  • Overview
  • NonTechnical Reports
  • Management Launch Materials
  • A Users Guide To Conducting A Management And Organisational Practices Survey
  • Access Free Datasets
  • Work in Progress
  • The 2010 Healthcare management survey
  • The 2006 manufacturing management and organization survey
  • 2004 Manufacturing Management Survey
  • Press coverage related to management practices

    Also available in Adobe PDF
  • Organization and Decentralization
    Management Practice and Productivity: Why they Matter by Nick Bloom, Stephen Dorgan, John Dowdy, Christos Genakos, Raffaella Sadun and John Van Reenen


    Overview

    There are large and persistent differences in organizational performance within detailed sectors that economists find very hard to explain. Traditionally, these differences have been ascribed to management quality, but most of the evidence here comes from case studies. As useful as this qualitative evidence is, there is a dearth of quantitative information on firm-level management practices across countries and sectors.

    The objective of this strand of research is to fill this gap. Working with leading management consultancies we have developed an in-depth survey methodology to benchmark management practices covering many thousands of organizations in 20 countries in many sectors (for example manufacturing, retail, healthcare and education).

    For an introduction to the work see our piece in the Journal of Economic Perspectives or listen to John Van Reenen's interview online

    • Quantify the association of management practices with firm performance (productivity, market value, growth) controlling for a wide range of other factors

    • Look at the drivers of the adoption of managerial best practice. How important are managerial and workforce skills, ownership and governance, product market competition, labor market regulation or other government policies?

    • Analyze what accounts for the differences in these relations across countries. Does the UK really have a management problem? Are we a nation of David Brents?

    • Understand the relationship between work-life balance and firm performance. Do better management practices come at the expense of awful working conditions or are more effectively run firms able to treat their workers better ("work smarter not harder" in the jargon). See Are Family-Friendly Workplace Practices a Valuable Firm Resource? Forthcoming in Strategic Management Journal (Nick Bloom, Toby Kretschmer & John Van Reenen)

    • Develop theoretical developing models to understand how firms adjust their organizations in response to changes in their environment through devices like decentralization and delayering. Introductions to the work can be found at http://cep.lse.ac.uk/pubs/download/dp0722.pdf

    • Empirically, how is decentralization affected by social capital, uncertainty and technology? See CEP Discussion Paper 937: Measuring and Explaining Decentralization Across Firms and Countries and Measuring Organization Capital in Japan: An Empirical Assessment Using Firm-Level Data.

    For further information contact John Van Reenen, Rebecca Homkes, Raffaella Sadun and Nick Bloom

    For more inforation on the management survey see: http://worldmanagementsurvey.org/


    Non-Technical Reports

    Management's Little Black Dress: Essential Practices for Leaders, Harvard Business Review Blog, 9 November 2010 by Raffaella Sadun

    Management practices in the NHS, CentrePiece 14 (3), Winter 2010 pages 16-19, by Nick Bloom, Carol Propper, Stephan Seiler and John Van Reenen

    Can better management sustain growth in China and India?, CentrePiece 13 (1) Spring 2008 pages: 10-14, by Nick Bloom and Rebecca Homkes

    Bossonomics? The Economics of Management and Productivity by Nick Bloom and John Van Reenen

    Management Practice and Productivity: Why they Matter by Nick Bloom, Stephen Dorgan, John Dowdy, Christos Genakos, Raffaella Sadun and John Van Reenen

    The Anglo German Foundation Report, Work Life Balance, Management Practices and Productivity by Nick Bloom, Toby Kretschmer and John Van Reenen is the result of joint research by CEP and the McKinsey Group. Published May 2006 by the AGF.

    Work Life Balance, Management Practices and Productivity
    by Nick Bloom, Toby Kretschmer and John Van Reenen

    Management Practices across Firms & Nations
    by Nick Bloom, Stephen Dorgan, John Dowdy, Tom Rippin and John Van Reenen

    Management Practices, Work-Life Balance and Productivity: A Review of Recent Evidence by John Van Reenen and Nick Bloom, Oxford Review of Economic Policy 22 (4), 2006

    Management Practices: The Impact on Company Performance by Nick Bloom, Centrepiece Article, Volume 10, Issue 2, Summer 2005.

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    Management Practices Launch Materials

    The Management Matters research has been launched in many of the 12 countries we have studied. The final section of each presentation offers messages for policy-makers and business leaders in different countries. For the presentations please click on the links below:

    Management in Healthcare - Launch Materials

    Management in Healthcare: Why Good Practice Really Matters
    Link to First Global Health launch
    LONDON, October 2010

    Management in Healthcare
    US Launch at Harvard Business School,
    CAMBRIDGE, MASSACHUSETTS, 1st April 2011


    Management Practices and Productivity - Launch Materials

    Management Practices Launch Materials
    LONDON, 12 July 2007 (Global Launch)

    Management Practice and Productivity: Why They Matter
    ROME, October 2007

    Management Practices and Productivity
    BANGALORE, November 2007

    Productivity and Management Practices: Why they matter - background
    Productivity and Management Practices: Why they matter - REPORT
    NEW YORK, November 2007

    The Business Environment: Does Management Matter?
    FRANKFURT, January 2008

    Management, Organization and Performance
    TOKYO, November 2008
    Watch Video - English
    Watch Video - Japanese

    Management and Productivity
    CARDIFF, June 2008

    Management Matters: Management and Productivity Project
    BELFAST, October 2008
    Link to the 13th Annual Northern Ireland Economic Conference
    Watch Video - English

    Management Matters: Management and Productivity Project
    CANBERRA, February 2009

    Management Matters in New Zealand - How does manufacturing measure up?
    Link to Ministry of Economic Development Management Matters webpage
    AUCKLAND, April 2010

    Management Matters in Northern Ireland and Republic of Ireland
    Link to Ireland's Executive Management Centre website
    DUBLIN, April 2010

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    A Users Guide To Conducting A Management And Organisational Practices Survey

    The first thing to do is to read some of the papers we have published based on the survey to get an overview of the techniques used: See Nick Bloom and John Van Reenen, Measuring and Explaining Management Practices Across Firms and Countries, CEP Discussion Paper No 716, March 2006.
    For a more detailed methodological discussion, see our paper forthcoming in the American Economic Review, New Approaches to Measuring Management and Firm Organisation

    Below you will find some of the materials that you will find helpful in how we conducted the surveys.

    For a more academic summary of the methodological lessons, see the short piece New Approaches to Surveying Organizations or the longer version Measuring and Explaining Management Practices Across Firms and Countries.

    Please feel free to contact us if you have any questions:
    Christos Genakos, Raffaella Sadun and John Van Reenen

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    Access Free Datasets

    Worklife Balance

    2004 Project

    2006 Project

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    Work in Progress

    Private Equity and Management Practices

    We find that private equity backed firms appear to have significantly better management practices than family firms and government firms. This does not appear to be simply higher powered incentives – we find improvements in shopfloor operations such as lean manufacturing as well as better people management. This suggests the reforms engendered by private equity firms may be deeper and more long-lasting than is often thought.
    Download PDF
    Slides from Private Equity Roundtable at Bruegel, Brussels

    Worklife Balance Human Resource Management (HRM) and Productivity

    Improved management practices on targets, monitoring, incentives and operations may improve productivity, but what about the workers? Do they come at the expense of anti-social hours and worse family life? In a series of studies we show that worklife balance is actually complementary with better management practices. Family friendly practices are actually more likely when management quality is high. Competition does not seem to result in worse worklife balance. Contrary to much of the literature, however, we find that the positive association between productivity and family friendly practices disappears when we control for the overall quality of management. For a recent survey of the literature on HRM and productivity see: http://cep.lse.ac.uk/pubs/download/dp0982.pdf.
    For answers to the questions on Worklife balance see:

    Data (zipped file)

    Are Family-Friendly Workplace Practices a Valuable Firm Resource? Forthcoming in Strategic Management Journal (Nick Bloom, Toby Kretschmer & John Van Reenen)
    Management Practices, Work-Life Balance and Productivity: A Review of Some Recent Evidence (Nick Bloom & John Van Reenen)
    Work-Life Balance, Manangement Practices and Productivity (Nick Bloom, Toby Kretschmer & John Van Reenen)

    Management in the healthcare sector

    We have adapted our management practices survey to examine the healthcare sector. In 2006-2007 we collected data on English hospitals in the public (NHS) and private sectors. We found that competition increases management quality and so helps improve clinical outcomes (such as survival rates from heart attacks). http://cep.lse.ac.uk/pubs/download/dp0983.pdf (and slides). To identify the effect of competition we use the fact that politicians are reluctant to close down hospitals in marginal constituencies generating more hospitals (and therefore more competition) in particular geographical areas.

    In 2009-2010 we followed up the hospitals surveyed 3 years earlier and extended this work to examine hospitals in 6 other countries. Results from this analysis are coming soon. See http://cep.lse.ac.uk/_new/events/event.asp?id=114

    Download the non-technical write up of the research

    For more of CEP’s work on healthcare and public sector productivity more generally see: http://cep.lse.ac.uk/_new/research/productivity/public_sector.asp

    Retail management

    In Spring 2006 a small retail pilot on 21 UK retailers was carried out as an investigation into the feasibility of obtaining management and organizational survey data from service sector companies. The summary insights are now available online.

    During Summer 2009 a team of about 12 people from the Institute for Competitiveness and Prosperity managed by Daniela Scur ran a cross-country retail management survey working with the LSE and Stanford team using our standard evaluate methodology. The draft report will be available in Spring 2010. Please contact Nick Bloom or Daniela Scur for details

    Management field experiments

    Nick Bloom has lead a joint Berkeley, Stanford and World Bank team running a management practice field experiment in India. The project is working with 20 larger firms (median of 250 employees and 3 production plants) to provide randomized free management consultancy to a treatment group alongside a control group. We are monitoring both groups and evaluating the impact of improved management on firm performance. The management treatment is being carried out by a leading international consulting firm delivering a six month change management program. This treatment is based on a standard commercial consultancy product delivered to manufacturing firms in Asia, Europe and the US. The research will investigate the impact this treatment has on management practices, organizational structure and performance of firms, and the correlation of this with other local factors like skills, regulation, and competitor and international exposure to management best-practice. Kick-off video Non-technical initial overview.

    Papers relating to the Indian Field Experiment:

    Does Management Matter? Evidence from India, by Nick Bloom, Benn Eifert, Aprajit Mahajan, David McKenzie and John Roberts
    Why do firms in Developing Countries have Low Productivity?, Nick Bloom, Aprajit Mahajan, David McKenzie and John Roberts.


    Eastern European management

    The EBRD and World Bank have run a management and organization survey as part of their BEEPS global firm-level survey. This has collected management data on a number of transitional countries, and the draft report is available in the EBRD’s Transition Report in 2010. Please contact John Van Reenen or Helena Schweiger for details.

    Census data on management practices

    We are also working with the US and Canadian Census Bureaux to try and run large-scale national census surveys on management practices. The idea is to collect 10,000s of samples to understand in detail the cause of consequences of management practices across regions, firm-sizes, industries and worker skill levels.

    Country management extensions

    We have helped a number of national Governments and overseas research institutes run management surveys to facilitate international comparisons and develop national policies for improving management practices and productivity. So far Australia, Canada, Chile, Northern Ireland, the Republic of Ireland and New Zealand have all funded and run national management surveys. We are happy to provide full assistance in terms of training material, software, guidance and training personal to anyone thinking of extending this to other countries. If you are interested please drop John Van Reenen an e-mail.

    Teaching and Training

    We have used our work in a full set of lecture notes for a short-course of management practices that Nick Bloom and John Van Reenen delivered to Stanford GSB MBA students. These may be helpful for people interested in teaching management practices with a data-driven international approach. We are developing this material into a longer lecture course, with the eventual aim to produce a book broadly overview the management research methodology and results.

    Management Practices in Schools

    Ifty Hussain, Tim Besley and Steve Machin have run a pilot examining the measurement of management in schools. The research report of the promising work is available to download in Adobe pdf.
    Do Public Sector CEOs Make a Difference? Results From a Pilot Survey of Headteachers (pdf)
    by Timothy Besley, Iftikhar Hussain and Stephen Machin.
    In the Summer and Autumn of 2009 we extended this work to survey schools in the UK, US, Sweden, Canada and Italy. Watch this space for early findings.

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    The 2006 manufacturing management and organization survey

    During the Summer of 2006 a team of 45 MBAs and postgraduates at the Centre for Economic Performance surveyed over 3500 firms in the US, UK, France, Germany, Italy, Sweden, Poland, Greece, India, Japan, Korea and China, to collect data on management practices and organizational structures and behaviour. This data is currently being analyzed with first draft results planned for release in Summer 2007. The University research team involved in this project are Christos Genakos (Cambridge & CEP), Raffaella Sadun (LSE & CEP), and John Van Reenen (CEP & LSE).

    View how the CEP Conference Room and CEP Library were transformed into an 'international call centre' working round the clock, 24 hours a day for the Summer 2006 Survey.


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    The 2004 Manufacturing Management Survey

    During the Summer of 2004 a team of 10 MBAs at the Centre for Economic Performance collected management data from around 750 medium sized manufacturing firms in the UK, US, France and Germany to measure and attempt to explain management practices across firms and nations. The results of this are written up in the paper entitled "Measuring and Explaining Management Practices across Firms and Countries" and "Work Life Balance, Management Practices and Productivity".

    In Spring 2007 we plan to release a fully anonymized version of the CEP Management Stata dataset and programming files to allow researchers to replicate and extend this research.

    This is funded by the Anglo-German Foundation, the Advanced Institute for Management and the ESRC.

    [Anglo-German Foundation]  [AIM]   [ESRC]  


    Organization and Decentralization

    The economics of organization has made huge strides in recent decades. Luis Garicano has been at the forefront of re-thinking of organizational theory and leads the theoretical work. Building on our work on measuring management CEP researchers have made advances in understanding how to examine organizational forms (e.g. decentralization, spans of control) across industries and countries.

    For an empirical overview see CEP Discussion Paper No 970

    For work on the impact of social capital on decentralization see CEP Discussion Paper No 937

    For work on the impact of competition on decentrlization see Bloom, Sadun & Van Reenen, American Economic Review: Papers & Proceedings Vol. 100, pp 434-438

    For work on new technologies on firm organization (testing Garicano's theory of the firm as a knowledge hierachy) see CEP Discussion Paper No 927 and HP Innovation Research Programme Discussion Paper No 12