Indian weaving firms are visited again nine years after a randomized experiment that changed their management practices. While about half of the practices adopted in the original experimental plants had been dropped, there was still a large and significant gap in practices between the treatment and control plants, suggesting lasting impacts of effective management interventions. Few practices had spread across the firms in the study, but many had spread within firms. Managerial turnover and the lack of director time were two of the most cited reasons for the drop in management practices, highlighting the importance of key employees.
Firm performance, employment, Looms, looms/employe, plant size, management practices.
Over the long run, although firms dropped some of the previously adopted new practices, the positive effects of the implementation support scheme persisted, with adoption in the supported firms being 20 percentage points higher. Seven years after the end of the intervention, firms that had received support to implement the recommendations were more likely to be exporting and to use more modern looms. Seven years after the end of the intervention, firms that had received support to implement the recommendations had a similar number of looms as those that only received the initial diagnosis but had cut the number of employees by a quarter, with a resulting productivity (looms/employee) increase of 26.7 per cent. Good management practices also spread to non-intervened plants of the same firms to provide long-term adoption levels similar to those of the intervention plants. Firms that received the full package were more likely to be using consultancy services seven years after the end of the intervention and to have implemented better management practices in areas such as marketing not targeted by the programme.