Do the fat cats in management actually make a difference in how well a company does?
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Do the fat cats in management actually make a difference in how well a company does? This staple of water-cooler conversation has, surprisingly, never really been put to a thorough empirical test—until now. A number of American economists and researchers have now teamed up with the US Census Bureau to collect data from a large, nationally representative sample.
The resulting Management and Organizational Practices Survey shows that well-structured management practices have a strongly positive correlation with firm performance—as much or more so than other important factors such as technology adoption, in fact.
The study is US-focused, but similar work that utilizes the World Management Survey hints at similar trends worldwide. And other countries—including Pakistan and China—are now taking note and developing their own surveys building on this research.
There’s something to consider for India. After all, it’s part of the global productivity slowdown—and inculcating good management practices is a relatively cheap countermeasure.