Who Wants to Improve their Management? Evidence from a Failed Experiment

Structured management practices are robustly correlated with superior performance, but wide dispersion of management quality persists through time. This paper asks if management practices can bring about these improvements why do we see little change in the distribution of management practices over time? And if improvements to management practices within firms are possible and seemingly profitable over short periods, why is the uptake so low? We design three linked data collection tools to understand these puzzles showing that there is positive selection due to firms’ management practices over time, their characteristics including share of management and educational level of management. These attributes along with subjective beliefs about barriers to improvement all contribute to firms’ willingness to improve and take actions to do so. Our paper shows management practices are a predictor of firm survival and offers some policy interventions to help firms improve.