Why American Managers are the Best in the World

Last Updated Jun 27, 2011 2:51 PM EDT

It's not a contest exactly, but it might be interesting for you to learn that American firms are the best managed in the world.

That's one finding of a research team from Harvard Business School, London School of Economics, McKinsey & Company, and Stanford. The group surveyed over 10,000 firms in 20 countries about management practices across operational management, monitoring, targets, and people management. The result: The first global database of management practices.

The group ranked US managers the best in the world, followed by those in Japan, Germany and Sweden. Brazil, China, and India were at the bottom of the management chart, managers in the UK, France, Italy and Australia somewhere in between.

What American managers and their employers do better than any other group in the world is manage and motivate people, according to the study.

"American firms are ruthless at rapidly rewarding and promoting good employees and retraining or firing bad employees," according to the World Management Survey. Why?
  • More competition. Large and open US markets generate the type of rapid management evolution that allows only the best-managed firms to survive.
  • Human capital is important. America traditionally gets far more of its population into college than other nations.
  • The US has more flexible labor markets. It is much easier to hire and fire employees.
China is a study in contrast when it comes to people management.

"Many developing-country firms, even while trying to implement new techniques like Lean Management, ignore the fact that labor is different from other 'inputs.', the authors write in a blog post. "Many of the Chinese firms surveyed did not even employ managers who spoke the same language as the workers, relying on interpreters or basic sign-language for communication. As you can imagine, this does not lead to a feeling of mutual support between management and workers."

Read the full study and come back to tell us why you think American managers are world class -- or not.

Recommended Reading (Photo by Obese Seagull Productions, CC 2.0)
  • Sean Silverthorne

    Sean Silverthorne is the editor of HBS Working Knowledge, which provides a first look at the research and ideas of Harvard Business School faculty. Working Knowledge, which won a Webby award in 2007, currently records 4 million unique visitors a year. He has been with HBS since 2001.

    Silverthorne has 28 years experience in print and online journalism. Before arriving at HBS, he was a senior editor at CNET and executive editor of ZDNET News. While at At Ziff-Davis, Silverthorne also worked on the daily technology TV show The Site, and was a senior editor at PC Week Inside, which chronicled the business of the technology industry. He has held several reporting and editing roles on a variety of newspapers, and was Investor Business Daily's first journalist based in Silicon Valley.

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