APRIL 11, 2017 — Manufacturing establishments in the South and Midwest utilize more structured management practices than their counterparts in the Northeast and West, according to new results from the U.S. Census Bureau’s Management and Organizational Practices Survey.

Structured management practices in the South and Midwest received the highest scores of 0.568 and 0.556, respectively. The West followed with a score of 0.533, and the Northeast adopted the least structured management practices with a score of 0.517.

These scores were based on the survey, which includes 16 questions, that the Census Bureau used to construct a management score that summarizes establishments’ degree of structure in their management practices. Each of the questions on management practices was scored on a scale from zero, for least structured, to one, for most structured. More structured practices are those that are more explicit, formal, frequent or specific. The questions also identify:

• How activities are monitored.
• How targets for production and other monitored performance indicators are set.
• How achievement of those targets are incentivized.

An establishment’s overall structured management score is the average of its responses to these 16 questions. Tables with average scores are available by kind of business, state, employment size, establishment age and census region. A table reporting the shares of establishments providing responses by question is also available.

The Management and Organizational Practices Survey is conducted to help businesses understand current and evolving management and organizational practices and to assist in identifying determinants of establishment and productivity growth. The survey collected over 35,000 responses from the approximately 50,000 establishments surveyed in the mail portion of the 2015 Annual Survey of Manufactures.

Highlights:

• Structured management practices differ across kinds of business. For example, apparel manufacturing establishments had an average structured management score of 0.420, while paper manufacturing establishments had an average score of 0.654.
• Establishments with more employees generally had higher levels of structured management adoption than smaller establishments. For the employment size classes of 5-9, 10-19, 20-49, 50-99, 100-249, 250-499, 500-999, 1,000-2,499 and 2,500 or more employees, the average structured management score was increasing from the smallest class to the largest.
• More than 80 percent of establishments tracked three or more key performance indicators, which include metrics on production, cost, waste, quality, inventory, energy, absenteeism and deliveries on time. About a third of establishments tracked 10 or more key performance indicators. About half of U.S. manufacturing establishments set a mix of long- (more than one year) and short-term (less than one year) production targets on these metrics. For less than 3 percent of establishments, the main focus was on long-term production targets.
• U.S. manufacturing establishments also implemented structured management practices related to personnel. Approximately two-thirds of establishments promoted managers and nonmanagers based solely on performance and ability, while very few promoted workers based primarily on factors other than performance and ability. Just under half of surveyed establishments reported that they reassigned or dismissed underperforming nonmanagers within six months of identifying underperformance.

The National Bureau of Economic Research, the Massachusetts Institute of Technology and Stanford University provided support for this survey.

Information on confidentiality protection, sampling error, nonsampling error, sample design and definitions can be found at <www.census.gov/programs-surveys/mops/information.html>.

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