How Much Does Management Matter?

Productivity varies greatly across countries and traditionally, economic theory has looked at the importance of variations in the quantity and quality of factor inputs such as land, labour and cost in explaining productivity gaps. The quality of management is a "soft input" into production and this short video looks at how basic managerial approaches such as delegation and setting of targets impacts on productive efficiency. Local information used judiciously by senior and middle managers can have a big positive effect for decentralised firms not least because it frees up time for CEOs to think strategically.

Raffaella Sadun (Harvard Business School) explains her research on management and the key differences between being a micro-manager and being a coordinator.