The role of management practices in closing the productivity gap Uwe Aickelin (Nottingham) Giuliana Battisti (Aston) Chris Clegg (Sheffield), Xiaolan Fu (Cambridge) 29th September 2005

Objectives Assess the role of management practices in the productivity gap in selected parts of the service sector in the UK; Identify key aspects of management activity for productivity; Develop multi-level models of relevant variables, and use them to understand and predict practice; Generate ideas on good practice for productivity improvements.

Rationale Continuing productivity gap, e.g., cf USA Varied explanations Emerging interest at the level of the firm True also for service sectors Likely to be multi-level and multi-disciplinary

Research stages Stage 1 Review literatures from range of disciplines (months 0-3) Stage 2 Examine existing databases (months 0-6) Stage 3 Identify service sectors in which empirical work will be undertaken (months 3-6) Stage 4 Review different modelling approaches to select the most appropriate (months 0-12)

Research stages – cont. Stage 5 Use existing datasets and theory to develop first draft multi-level model (months 3-9) Stage 6 Undertake case studies in relevant service sector companies to gain insights (months 6-15) Stage 7 Develop and refine second draft of model (months 12-15) Stage 8 Operationalise variables in model for survey (months 15-18)

Research stages – cont. Stage 9 Collect data using large-scale survey of relevant companies in UK (months 18-21) Stage 10 Analyse data and refine model months 21-27) Stage 11 Identify lessons learned and good practice implications (months 24-30)

Outputs – Best case An inter-disciplinary literature review of the area An understanding of the role of management practices A valid multi-level model for use in understanding and predicting practice A set of lessons learned Ideas on what represents good practice for closing the productivity gap

Outputs – Worst case An inter-disciplinary literature review Better insights into, and understanding of, the role of management practices Experience of modelling in this area including the difficulties involved A set of comparative empirical findings A set of lessons learned Preliminary ideas on what represents good practice for closing the productivity gap

Progress Held meetings Staff in place at three Universities from 01.10.05 Staff in Sheffield from 01.01.06 Include PhD students? Links with Nick Bloom, CEP Met John Lewis

What next Identify and discuss key issues, as raised today Eg comparisons across companies or within companies (and across branches)

Literature review (1) What do we mean by productivity? How is it currently measured? What do we mean by management practices? How do we measure and assess them? Which ones to include in the study? What evidences is there of the productivity gap? How is it measured? What are the current explanations for this gap?

Literature Review (2) At which levels has the gap been investigated? What models currently exist? Are there any multi-level and / or multi-disciplinary models?

Levels Departmental (eg. Supervisory style) Branch / store (eg. Empowerment of staff) Firm / company (eg. Supply chain partnering) External (eg. Availability of skilled labour)

Models Mathematical Model Fix & Relax (Decision Variables vs. Constraints) Simulation Heuristic Optimisation Stochastic frontier analysis Statistical multi-level model

Regular meetings October 11 – Cambridge November 15 – Nottingham December 6 – Aston STAFF China, Italy, Germany, UK, Nigeria, Vietnam, Australia, Mexico, Brazil, Thailand