Pres Release: A. Census Bureau Offers First-Ever Large Scale Look at American Management Practices

Attachment A

https://www.census.gov/newsroom/press-releases/2013/cb13-03.html

FOR IMMEDIATE RELEASE: FRIDAY, JANUARY 04, 2013

Census Bureau Offers First-Ever Large Scale Look at American
Management Practices
Release Number: CB13-03

The U.S. Census Bureau today released findings from the Management and
Organizational Practices Survey, funded in part by the National Science Foundation and
jointly developed with researchers from Stanford University, the Massachusetts Institute
of Technology (MIT) and the London School of Economics.
The survey, a supplement to the Annual Survey of Manufactures, is the first ever from
the Census Bureau on management practices. It is based on reported data from more
than 30,000 of the approximately 50,000 manufacturing plants that were surveyed in the
2010 Annual Survey of Manufactures.
The Management and Organizational Practices Survey includes 16 multiple choice
questions about management practices at manufacturing establishments. The questions
pertain to subjects such as how managers were promoted, the time frame for production
targets and how frequently performance indicators were tracked. Drawing upon the
survey responses, the research team constructed a management score that
summarizes plants' intensity of use of 16 structured management practices, which are
those that are more specific, formal, frequent or explicit.
Today, at the annual American Economic Association meeting in San Diego, a member
of the research team will present Management in America [PDF - <1.0 MB], a research
paper that links the survey results to other data sources in order to focus on differences
in management practices and how these are related to variations in plant performance.
The research team includes Census Bureau staff and researchers from the institutions
mentioned earlier in the news release.
According to the survey:

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Download Figure 1 [JPG - <1.0 MB]

Use of structured management practices varies across U.S. manufacturing
establishments: 18.3 percent (± 0.4 percent) of establishments adopt at least 75 percent
of structured management practices related to performance monitoring, targets and
incentives, while 27.3 percent (± 0.7 percent) of establishments adopt less than 50
percent of these practices. (See Figure 1.) "My conclusion based on the survey is that
while America has a group of plants that have low management scores it also has a
group of plants that adopt almost all structured management practices," said Nick
Bloom, a team member and professor at Stanford. "These plants are continuously
improving their production processes, setting challenging targets and motivating
employees with rapid promotions and performance rewards."

Download Figure 2 [JPG - <1.0 MB]

Plants in the South and Midwest utilize more structured management practices
measured in the survey than do their counterparts in the Northeast and West. On a
scale ranging from 0 (least structured) to 1 (most structured), establishments in the
South had a score of .607 (± 0.005), those in the Midwest .594 (± 0.005), those in the
West .579 (± 0.006) and plants in the Northeast .568 (± 0.007). (See Figure 2.) "The
regional differences in management practices across the U.S. are notable. Intriguingly
these differences persist even when we take into account differences in industry mix,
plant size and worker skills in our research paper," said John Van Reenen, a professor
from the London School of Economics.

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Download Figure 3 [JPG - <1.0 MB]

U.S. management appears to have become more structured in the previous halfdecade, particularly for practices involving data collection and analysis. (See Figure 3.)
Professor Erik Brynjolfsson from MIT said, "I believe this sharp rise in management
practice scores for data collection and processing reflects the rapid spread of
computerization which makes it much easier to collect, analyze and act on performance
data."
The Management and Organizational Practices Survey research team is developing a
tool that will allow manufacturing establishments to benchmark their use of structured
management practices against their peers. "This supplement to the Annual Survey of
Manufactures is part of a major new effort to understand which business practices are
adopted by American manufacturers," noted Ron Jarmin, the Census Bureau's assistant
director of research and methodology. "The estimates could be used to understand how
these practices affect productivity and performance."
More on the Management and Organizational Practices Survey is available at
. During the embargo, Management in America is
available at [PDF - <1.0
MB]. This paper is not a Census Bureau product and has not undergone the review and
editorial process generally accorded official Census Bureau publications. It reflects an
initial investigation into management practices at manufacturing establishments and the
researchers are continuing to work with the data to try to understand in more detail the
factors accounting for differences in management practices across establishments,
firms, industries and regions. Any views expressed are those of the authors and not
necessarily those of the U.S. Census Bureau.