Why americans business management rules the world

The decade of painstaking investigate, we did, on average, American companies are managed by the best on the earth. This is not what the group of European researchers predictable to find. But even if the Americans are bad for football (or soccer as it is known locally), is the Brazilians management.

Over the past ten years, a team of Harvard Business School, London School of Economics, McKinsey & Company and Stanford have been analytically collected for the overall administration. We developed a compute of management practices on prepared management, monitoring, targets and people management. We scored each measurement has a variety of management practices to produce the overall score, detection of more than 10,000 companies in 20 countries. This gave us the opportunity to create the first global database of management practices.

Here are some of our results.

Well-managed companies mismanagement of their competitors thrash

First, it is not surprising, we find that organizations with better management massively better than their competitors unionized. They make more money, grow faster, have much higher stock prices, and survive longer. (For more details see our previous blog post HBR).

The American Century Address

Second, when it comes to control the whole, U.S. companies are doing better than everyone. This U.S. dominance occurs in the manufacturing, retail and health care (but interesting, is not high schools). Japanese companies, German and Swedish are closely following. However, behind developing countries like Brazil, China and India into the bottom of the card management. Southern countries like Portugal and Greece appear to have management practices only marginally better than most developing countries. In the middle are countries like Britain, France, Italy and Australia, which management practices reasonable but not brilliant.

Background of the classification results

While ranking countries, is certainly appealing, the real story ranks countries. Nearly 90% of the cross-country controls the entire "tail" is really poorly run companies in each country. Countries like the United States, Excel, companies hardly poorly managed, while in countries like India, which have lower average scores are a mass of badly managed companies pulling down their averages.

Every country has some world-class companies

But then there are a lot of very poorly managed, each country also has some excellent companies. Even low-ranking India has dozens of companies that utilize world-class management. Bring key is that individual companies are not caught by the national environments in which they operate - are not more efficient in all countries studied. On the contrary, being in a world-class as the U.S. does not guarantee success. Even in America, over 15% of companies are so badly managed that their situation is worse than the average Chinese or Indian companies.

What is the secret of successful management sauce?

One of the biggest drivers of these differences is variation in people management. U.S. companies are ruthless quickly to reward and promote good employees and retraining or firing bad employees. The reasons are threefold.

First United States increased levels of competition. Large and open U.S. markets to generate such a rapid change in management, which allows only the best-run businesses to survive.

The second human capital is important. America traditionally get a lot more people in college than other nations.

3rd U.S. labor markets more flexible. It is much easier to hire and fire employees.

Many developing country firms, even trying to apply new techniques such as Lean Management, ignore the fact that work is different from other "inputs". Many Chinese companies surveyed do not even use managers who speak the same language as the workers, the use of sign language interpreters or basic communication. As you can imagine, this does not lead to a sense of mutual support between management and workers.

But the United States should not be satisfied. Other countries as good or better in the United States in some other management study, as a careful follow-up, lean production, and reasonable goals. Germany's manufacturing prowess, which has helped to overcome the recent crisis as well, is built on such benefits. In addition, while management practices in China are far below American standards, have shown the most rapid improvement since 2006 of any country, we have examined.

Changing ranks and benefits

What are the conclusions of others as the top of the leaderboard?

The answer is not for all companies to be more American, but rather to consider some of the ways U.S. companies, particularly U.S. multinationals time exhibitor and implement. In all countries, organizations, good incentive for talented workers, either through promotion, salary or other rewards, are better than others. As a best practice is spread and businesses continue to implement these techniques, they will reduce disparities, raise tremendous growth and efficiency gains.

Want to know where your company will fall in the rankings? To learn more about our research program and related work, go to the Management Survey of the World, where you can compare your own organization and determine where you fall into the ranks of your industry or nation