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Do Management Interventions Last? Evidence from India
Last registered on March 30, 2018

Pre-Trial

Trial Information
General Information
Title
Do Management Interventions Last? Evidence from India
RCT ID
AEARCTR-0002808
Initial registration date
March 25, 2018
Last updated
March 30, 2018 5:31 PM EDT
Location(s)
Region
Primary Investigator
Affiliation
World Bank
Other Primary Investigator(s)
PI Affiliation
UC Berkeley
PI Affiliation
UC Berkeley
PI Affiliation
Stanford University
PI Affiliation
Stanford University
Additional Trial Information
Status
Completed
Start date
2008-08-01
End date
2017-03-31
Secondary IDs
Abstract
We revisited Indian weaving firms nine years after a randomized experiment that changed their management practices. While about half of the practices adopted in the original experimental plants had been dropped, there was still a large and significant gap in practices between the treatment and control plants, suggesting lasting impacts of effective management interventions. Few practices had spread across the firms in the study, but many had spread within firms. Managerial turnover and the lack of director time were two of the most cited reasons for the drop in management practices, highlighting the importance of key employees.
External Link(s)
Registration Citation
Citation
Bloom, Nicholas et al. 2018. "Do Management Interventions Last? Evidence from India." AEA RCT Registry. March 30. https://doi.org/10.1257/rct.2808-1.0.
Former Citation
Bloom, Nicholas et al. 2018. "Do Management Interventions Last? Evidence from India." AEA RCT Registry. March 30. https://www.socialscienceregistry.org/trials/2808/history/27490.
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Experimental Details
Interventions
Intervention(s)
This paper examines the persistence of management practices adopted after an extensive consultant-supported intervention that we undertook in a set of multi-plant Indian textile weaving firms from 2008 to 2010 (Bloom et al, 2013). Firms were randomly allocated into treatment and control groups, and the intervention was done at the plant level within each firm. Both treatment and control plants were given recommendations for improving management practices in several areas, and the treatment plants received additional consulting assistance in implementing the recommendations. The intervention led to a substantial adoption of the recommended practices in the treatment plants and a modest one in the control plants, with corresponding improvements in various measures of performance.
Intervention Start Date
2008-09-01
Intervention End Date
2009-12-01
Primary Outcomes
Primary Outcomes (end points)
Management practices, looms per employee, consulting days (in logs), marketing practices
Primary Outcomes (explanation)
See paper for details
Secondary Outcomes
Secondary Outcomes (end points)
Secondary Outcomes (explanation)
Experimental Design
Experimental Design
Our original experiment measured the impact of improving management practices in a set of large textile firms near Mumbai. This experiment involved 28 plants across 17 firms in the woven cotton fabric industry. Firms had been in operation for 20 years on average, and all were family-owned and managed. These firms are large, complex organizations, with a median of 2 plants per firm and 4 reporting levels (Table A1 reports baseline summary statistics). We contracted with a leading international management consultancy firm to work with the plants in order to change plant-level management practices rapidly.
The intervention ran from August 2008 until August 2010, with data collection continuing until November 2011. The intervention focused on a set of 38 management practices that are standard in American, European, and Japanese manufacturing firms and which can be grouped into five broad areas: factory operations, quality control, inventory control, human-resources management, and sales and orders management (for details see Appendix Table A2). Each practice was measured as a binary indicator of the adoption (1) or non-adoption (0) of the practice.
The consulting intervention had three phases. The diagnostic phase took one month and was given to all treatment and control experimental plants. It involved evaluating the current management practices of each plant, constructing a performance database, and providing each plant with a detailed analysis of its current management practices along with recommendations for change. The second phase was a four-month implementation phase given only to the treatment experimental plants. In this phase, the consulting firm followed up on the diagnostic report to help introduce as many of the 38 management practices as the plants could be persuaded to adopt. The third phase was a measurement phase, which lasted until November 2011, involving the collection of performance and management data from all treatment and control plants.
See Bloom et al. (2013) for more details
Experimental Design Details
Randomization Method
Randomization done by computer
Randomization Unit
Randomization
occurred at the firm level and was conducted by computer.
We first randomly chose six firms to be the control firms, and one
eligible plant from each of them to be the control plants. The
remaining 11 firms were then the treatment firms. Our initial
funding and capacity constraints of the consulting team meant
that we could start with four plants as a first round, which started
in September 2008. We therefore randomly chose 4 of the 11
treatment firms to be in round 1, randomly selecting one plant
from each firm. In April 2009, we started a second round of
treatment. This comprised selecting a random plant from each
of the remaining seven treatment firms, and, because funding
allowed for it, three more plants selected at random from the
treatment firms with multiple plants.
Was the treatment clustered?
No
Experiment Characteristics
Sample size: planned number of clusters
17 firms
Sample size: planned number of observations
28 plants
Sample size (or number of clusters) by treatment arms
6 control firms, with 6 control plants
11 treatment firms, with 14 treatment plants
Minimum detectable effect size for main outcomes (accounting for sample design and clustering)
IRB
INSTITUTIONAL REVIEW BOARDS (IRBs)
IRB Name
IRB Approval Date
IRB Approval Number
Post-Trial
Post Trial Information
Study Withdrawal
Intervention
Is the intervention completed?
Yes
Intervention Completion Date
March 29, 2012, 12:00 AM +00:00
Is data collection complete?
No
Data Publication
Data Publication
Is public data available?
No
Program Files
Program Files
No
Reports and Papers
Preliminary Reports
Relevant Papers
Abstract
A long-standing question is whether differences in management practices
across firms can explain differences in productivity, especially in developing
countries where these spreads appear particularly large. To investigate this,
we ran a management field experiment on large Indian textile firms. We provided
free consulting on management practices to randomly chosen treatment
plants and compared their performance to a set of control plants. We find that
adopting these management practices raised productivity by 17% in the first
year through improved quality and efficiency and reduced inventory, and
within three years led to the opening of more production plants. Why had
the firms not adopted these profitable practices previously? Our results suggest
that informational barriers were the primary factor explaining this lack of adoption.
Citation
Does Management Matter: Evidence from India, QJE 2013