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

2 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.

3 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

4 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)

5 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)

6 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)

7 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

8 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

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

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

11 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?

12 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?

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

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

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