Management Practice Deficit in Developing Countries

In Simple Words

Think of a factory like a kitchen where cooks constantly throw away burnt meals without recording why they burnt; when simple scoreboards and timer routines are introduced to track every spoiled dish, cooks quickly fix the oven knobs, cutting wasted food in half.

Research question

Developing-country manufacturing firms suffer from lower labor revenue productivity and persistent operational inefficiencies because firms fail to adopt basic modern management practices like quality tracking and operational monitoring.

Participants

Large Indian textile manufacturing plants with a median asset value of $13.3 million.

Study Design

Randomized controlled trial (RCT) where treatment plants received 5 months of extensive management consulting while control plants received 1 month of light consulting.

Results

Adopting basic quality measurement and data tracking enabled treatment plants to correct defect root causes quickly, reducing average defects by over 50 percent in the first three months alone.

Takeaway

Implement systematic daily defect recording and root-cause analysis protocols on manufacturing production lines.

Read alongside the research

Plain-English glossary

Original explanations, informed by the references below. Examples are illustrations, not data from the studies above. The research text stays unchanged.

Median

The middle number after arranging the values from smallest to largest. If there are two middle numbers, use their average.

ExampleFor the values 2, 4 and 12, the middle value is 4. The median is 4.

NIST · Measures of location ↗Read more about median →

Randomized controlled trial

A study that uses chance, like drawing lots, to decide who receives each option being compared. Researchers compare the groups’ outcomes to estimate the effect of those options.

ExampleA lottery assigns volunteers to a training programme or a comparison group. Researchers then compare their outcomes.

GET-IT glossary · Randomized study ↗Read more about randomized controlled trial →

Related findings

• Productivity and Profitability Payoffs of Lean Operations →Firms & operations

  Imagine a car repair garage where mechanics spend half their time searching through unsorted piles of spare parts and re-fixing mistakes made yesterday. By organizing the parts shelves, labeling items, and checking engine repairs daily, mechanics stop repeating mistakes and spend less money buying duplicate parts.

• Managerial Information and Practice Awareness Deficits →Firms & operations

  Imagine a driver navigating a mountain road with a hand-drawn paper map, completely unaware that a smartphone navigation application exists that could instantly double their driving speed and optimize their route.

• Quality Control and Management Practice Adoption →Firms & operations

  Think of a factory like a commercial kitchen where cooks constantly burn dishes without keeping track of which recipe failed; introducing a simple whiteboard to record every burned meal allows the kitchen team to pinpoint broken ovens and fix them immediately instead of spending hours recooking ruined food.

• Formal Management Practice Deficit in LMICs →Firms & operations

  Imagine running a restaurant kitchen where cooks operate without order tickets, timers, or structured feedback, relying instead on verbal yelling when orders fall behind. Installing clear display screens and objective performance boards gives every kitchen worker clear targets and fair feedback without chaotic friction.