Wednesday, July 27, 2011

Why American Management Rules the World

Over the past 10 years a team comprised of experts from Harvard Business School, London School of Economics, McKinsey & Company, and Stanford University, has systematically surveyed global management as related to organizational performance. The survey found that organizations with better management outperformed their competitors who were poorly managed. They grow faster and survive longer. More importantly, when it comes to overall management, American firms outperform all others, especially in the manufacturing, retail and healthcare sectors

One of the reasons determined to comprise the “secret sauce of management success”, is the fact that U.S. firms are “ruthless at rapidly rewarding and promoting good employees and retraining or firing bad employees.” There are 3 main reasons for this trend.

1.With the tough levels of competition within the U.S., the markets generate the type of rapid management evolution which allows only the best-managed firms to survive.

2.America traditionally gets far more of its population into college than other nations.

3.The U.S. has more flexible labor markets, and it is easier to hire and fire employees than in other countries.

However, the U.S. should not be complacent, as other countries are just as good as or better than the U.S. in some of the other areas of management studied, including careful monitoring, lean production, and sensible targets. Germany’s manufacturing expertise has helped it weather the recent downturn and although Chinese management practices are well below U.S. standards, they showed the fastest improvement since 2006 of any country studied by the researchers.

The lesson of this study is not that firms should strive to be ‘more American’ but to consider implementing some of the practices which positively correlate to organizational performance.

Click here for original article.

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