Who Wants to Improve their Management? Evidence from a Failed Experiment (ESCoE DP 2023-22)

Structured management practices are robustly correlated with superior performance, but while some firms change practices quickly, wide dispersion of management quality persists. Uniquely, combining evidence from two novel business surveys and a failed management mentoring field experiment, we observe firms’ intentions to improve their management practices and firms’ subjective barriers to improving their management practices. We find clear evidence of positive selection into a free management mentoring scheme: the worst managed firms were the least likely to seek help. While some firms cite lack of time and resources as challenges to improving management practices, firms with low management scores often do not engage with these questions, and those with fewer and poorly educated managers claim not to face any barriers to improving their management practices. These results suggest lack of awareness may be a key barrier to improvement by firms and a challenge for effective policy interventions.