Does Management Really Work ?
At that article for the ninetieth anniversary of HBR, they wanted to ask a question. How three essential practices can address even the most complex global problems.
The three essential practices’ are targets, incentives and monitoring.
They establish researchers teams and asked managers a targeted list of open ended questions, designed for ferret out details about how their companies were -or were not- implementing these practices.
They learn three things. First; many organizations all over the world are very badly managed. Second; is not so important and finally the third one is; management makes a difference in shaping national performance. Their analysis show that variation in management accounts for nearly a quarter of the roughly %30 productivity gap between the U.S. and Europe.
They dig down and research schools and hospitals so they made some interviews and on the basis of interviews conducted in local managers’, they found that effective management can indeed improve performance, even beyond the private sector.
They assessing 8000 firms in 20 countries in the developed and developing worlds and focused on medium sized manufacturers, both independent and multinational- owned companies had 50 to 5.000 workers
They made some regulations for the firms and institutions and the results are magnificent. For example in one case, factory rose profits by roughly %30 and that company is opened a second factory and hired 100 more weavers after attracting them away from rival firms with the promise of %10 higher pay.
The return on good management; As a result, A one – point increment on a five-point management score correlated with better performance at manufacturers around the globe. The score was based on how well the firms adhered to three basic management practices: targets, incentives and monitoring.
One point increment on a management score was associated with;