Economics & Finance / Business & Management / Organizational Behavior & Management

Does Management Matter? Shocking Proof from India (2011)

Does Management Matter? Evidence from India

Nicholas Bloom, Benn Eifert, Aprajit Mahajan, David McKenzie, John Roberts

For decades, economists argued that bad management in poor countries was just a smart response to cheap labor. But a groundbreaking experiment in India's textile mills proved them wrong. This video breaks down the 2011 study by Bloom, Eifert, Mahajan, McKenzie, and Roberts that randomly gave modern management practices to some factories—and left others alone. The results? A stunning 11% boost in productivity, 32% fewer defects, and $238,000 more profit per year—all for less than $3,000 in costs. We'll show you why most bosses were clueless about their own inefficiency, how better information let them trust their managers, and why weak laws trap companies in mediocrity. If you think management is just soft stuff, this will change your mind. Watch to see the real cost of ignorance—and the simple fixes that work.