Indian weaving firms are visited again nine years after a randomized experiment that changed their management practices. While about half of the practices adopted in the original experimental plants had been dropped, there was still a large and significant gap in practices between the treatment and control plants, suggesting lasting impacts of effective management interventions. Few practices had spread across the firms in the study, but many had spread within firms. Managerial turnover and the lack of director time were two of the most cited reasons for the drop in management practices, highlighting the importance of key employees.
Do Management Interventions Last? Evidence from India
Intensive management consulting can have lasting effects on firms’ management practices and productivity, with effects on productivity. Small improvements in management triggered by a diagnostic may be less stable than large improvements introduced through intensive support to implement the recommendations. Spillovers within and across firms are important in improving management practices.
Bloom, N., Mahajan, A., McKenzie, D., & Roberts, J., 2020. Do management interventions last? evidence from India. American Economic Journal: Applied Economics, 12(2), 198-219.