Friday, April 5, 2013

The Nations with the Best Managed Organizations



Countries are still on their paths of growth and seek to develop organizations that are effective and well-managed. This management comes into play when organizations have a sense of the human capital that goes into a healthy business model s and profitable organizations. Research helps decision makers understand the level of performance, achievement of targets and ways of motivating people. 

Through the development of strong management techniques, it is possible to derive higher forms of organizational development. Some countries are predisposed to generate higher performing organizations than others that have poor human rights understandings. The differences between first world and third world organizations become apparent when analyzing a number of organizations longitudinally. 

Research by Bloom, Genakos, Sadun, and Van Reenen (2012) reviewed over 10,000 organizations in the timeframe of a decade with an attempt to determine their performance monitoring, target settings, and incentives/people management styles. The results are summarized into the ten following concepts:

1.) U.S. manufacturing firms scored higher than any other country. Countries such as Canada, Germany, Japan, and Sweden were also well managed while Brazil, China, and India were much less well managed.
2.) Even though each country has a variety of manageability generally poor performing countries have larger tails of very poorly run countries.
3.) American retail and hospitals ranked high but high schools ranked poorly.
4.) Nonmanufacturing sectors had wider spreads than other sectors.
5.) Government owned organizations had the worst management practices and subsequent performance based on tenure not allowing poor performers to be removed.
6.) Private-sector companies managed by first descendants of the founders were poorly managed while those run by a professional firm were better off.
7.) Multinational firms adapted strong management practices.
8.) Difficult markets were associated with better management.
9.) Light levels of labor market regulation were associated with positive management.
10.) The higher the education level of managers the better the management practices.

The research helps highlight how American firms are still leading the game of positive management. Countries such as German, Japan and Sweden have also done well in their administration styles while poor firms reside more widely in third world nations. Furthermore, multinational forms of companies seem to adapt and maintain strong management practices that help them maintain an economic foothold. Organizations also saw better management with higher levels of management education. This helps decision makers understand that greater connections between academia and business can be helpful in gaining competitive advantages. Yet even though a higher college education was a benefit it would appear that government run entities and high school education were still considered very poorly managed in the U.S.

Bloom, N., Genakos, C., Sadun, R. & Reenen, J. (2012). Management practices across firms and countries. Academy of Management Perspectives,  26 (1).

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