WHAT IS THE ROLE of management in an
organization’s failure or success? How
do management styles differ across
facilities? The U.S. National Bureau
of Economic Research (NBER) has
explored how management practices
compare across organizations through
the administration of its Management
and Organizational Practices Survey
(MOPS). With funding from the U.S. National
Science Foundation, the Kauffman
Foundation, and the Sloan Foundation,
MOPS was delivered to 32,000 U.S. manufacturing
plants belonging to more than
10,000 firms, as a mandatory 16-question
supplement to the U.S. Census Bureau’s
Annual Survey of Manufacturers.
The authors of the report based on the
survey found that management practices
varied significantly not only among organizations,
but also among manufacturing
plants within the same organization. The
larger the size of the firm, the
greater the variation among its
plants. In addition, individual
plants that had adopted more
structured management practices
were more productive,
profitable, and innovative—and
experienced greater rates of
growth—than plants with less
organized practices.
Management practices
“account for about a fifth of the
cross-firm productivity spread,
a fraction that is as large as or larger than
technological factors such as R&D or IT,”
the authors conclude. They emphasize
four factors that contribute to an organization’s
adoption of consistent structured
management practices across all
facilities: product market competition,
the regulatory business environment,
learning spillovers from larger and more
productive plants, and education.
This government-sponsored
survey’s “coverage of units within a
firm, its links to other Census data, as
well as its comprehensive coverage of
industries and geographies,” write the
report’s authors, “enables us to address
some of the major gaps in the recent
management literature.”
“What Drives Differences in Management
Practices?” is forthcoming in the
American Economic Review. Read the working paper.