The Korean Economic Review
Management Practices in Korean Manufacturers: A Striking Level Difference between Production and Incentive Management
Sunghoon Chung (Korea Development Institute)Year 2023Vol. 39No. 1
AbstractThis study investigates the management practices of 926 manufacturing plants in South Korea using the quantitative method by Bloom et al. (2019). The original management and organizational practices survey (MOPS) in the U.S. is revised to reflect the Korea-specific environment and merged with the Mining and Manufacturing Survey of Statistics Korea. We determine that the measured management scores vary substantially across the plants, while they change little over time. When the overall management is categorized into production and incentive management, the median score of the latter is about 56% of the former, much lower than the corresponding score ratio in the U.S. which is 92%. The structured management turns out to have a strong and positive relationship with any measure of productivity. The plants at the 90th percentile of management scores in the sample are 30.3% higher in total factor productivity than those at the 10th percentile.