Study: Good management is key for productivity

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A new study looking at effective management in manufacturing found that management was a distinguishable factor in productivity, according to a National Association of Manufacturers newsletter.

Management techniques focusing on targets, incentives and monitoring can improve productivity in manufacturing, according to a survey that covered more than 35,000 U.S. manufacturing plants.

The study, conducted by the Vox Center for Economic Policy Research, found that management was a distinguishable factor in productivity and that management practices are not consistent across companies or even internally, the NAM Smart Brief said.

“Perhaps most surprisingly, we found that management practices varied not just among companies, but also within them,” the researchers found.

In fact, they found that more than 40 percent of the variation in management practices among plants belonging to multi-plant firms was because of differences across establishments within the very same firm.

“That is, inside many large firms we found some plants utilizing a highly structured approach to management alongside those with unstructured approaches,” they wrote. “And this variation was greatest in the largest firms, possibly because standardizing practices across regions and divisions is particularly hard for the biggest companies.”

“The bottom line of our research is that management matters a lot for company performance, and with the huge variation we see across manufacturing plants this suggests there are many opportunities to make big improvements in performance,” researchers wrote. “Increasing management structure can be relatively cheap, compared to investments in R&D or IT.”

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