Management delivers: Why firms should invest in better business practices

There is a stark difference in firm productivity and growth between developing and advanced economies. Improving the management of firms in developing countries can help bridge this gap.

New research shows that introducing management practices to firms can have lasting impacts on their productivity and growth. When Indian firms adopted management practices, their productivity increased by 17% in the first year, and within three years, they opened more production plants. Eight years later, the impact of management on productivity persists.

This brief, which focuses on large private firms, examines why management matters for economic growth – demonstrating the long-term effects of management practices on firm productivity, and recommending actions for policymakers and firms to secure these benefits.