Newspaper article The Christian Science Monitor

Can US Management Stay Ahead of China, India?

Newspaper article The Christian Science Monitor

Can US Management Stay Ahead of China, India?

Article excerpt

There are a few things that US firms can do to stay competitive: monitor management, set targets, and develop strong incentives for employees to perform well

Two decades ago, Japan was the world economy's new kid on the block. America's growth was stagnating while Japan's was accelerating. Many American politicians and citizens feared that US global dominance was fading - a fear Hollywood echoed with the 1993 film "Rising Sun," in which Sean Connery and Wesley Snipes battled corrupt Japanese corporations.

That economic miracle was built on strong management. Japan developed and perfected the lean management system, powering its corporations toward global supremacy. The US eventually copied and further innovated these management practices, and the Japanese advantage melted away.

Today's new kids on the block, China and India, are powered by something quite different: a vast supply of cheap labor that has supercharged growth in low-wage manufacturing and services. But this cheap labor is running out as eventually all underemployed farmers move to the city. In China's Pearl Delta manufacturing heartland, wages now are reportedly rising at 20 percent per year. So what will happen next: Will China and India's growth slow, or will they copy Japan to get a second wind? The quality of their management practices will play a key role.

Currently, the management of US corporations reigns supreme, closely followed by Japan, Germany, and Sweden, according to a new interview-based measurement tool that we at the London School of Economics and Stanford University have developed with colleagues at Harvard University and McKinsey and Co. to evaluate management practices. Developing countries like Brazil, China, and India lag at the bottom, but they are catching up. What should US companies do?

Country rankings grab the headlines, but this disguises tremendous internal country differences in management. …

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