Study Shows that Good Managers Lead to Productivity Growth

A large number of statistical analysis and case studies on company performance have proved that it is good management practices that increase productivity, and not technical changes. 

When asked what leads to productivity growth, people tend to put a lot of accent on technical change, when in fact, good managers are the one that makes a difference.

Even though there is a tradition in economics that focuses on the importance of management, it has not benefited from a lot of attention. That’s because management is hard to measure.

Managers are frequently seen as “Bad bosses”, and not so much as leaders of growth. However, things have started to change. That’s because, in the last decade, people started being able to actually quantify key components of management.

Studies show that things such as how firms keep track of everything that happens internally, communication to the employees, how targets are set can be used for continuous improvement.

Another important question regards human resources: Are there any incentives and rewards for good results?

More than that, the surveys from 20,000 organizations in 34 countries had uniform results, saying that firms that have high management scores have better results.

In this regard, the governments also need to do their part in order to apply some structural changes to the environments that firms are in.

Management capacity resulted as being the key element for both company success and macroeconomic development, as studies show.