Quality management practices are strongly related to the financial performance of Dutch industry. In terms of those management practices, the Netherlands ranks sixth in the world ranking of quality of management. Compared to the best performing countries, the Netherlands has relatively many companies that lag behind or perform on average. This is the conclusion of Rabobank economists who, together with researchers from the University of Groningen, conducted a large-scale study comparing management practices at Dutch industrial companies with those in other countries for the first time.
Quality management practices strongly correlate with financial performance of Dutch business. In terms of those management practices, the Netherlands ranks sixth in the world ranking of quality of management. Compared to the best performing countries, the Netherlands has relatively many companies that lag behind or perform on average. That is the conclusion of Rabobank economists who, together with researchers from the University of Groningen, conducted a large-scale study comparing management practices at Dutch industrial companies with those in other countries for the first time.
Sixth place for Dutch business
To find out the quality of management practices in the Netherlands, researchers from Rabobank and the University of Groningen collaborated with the project team behind the World Management Survey. This is an initiative of Stanford University, Harvard Business School and MIT Sloan School of Management, which has been systematically collecting management data from companies around the world for years. Baarsma: "Through this cooperation, we can now compare the management practices of Dutch companies with each other and with companies in other countries for the first time. The Netherlands ranks sixth in the world ranking of good management practices. That seems like a good score, but it also shows where there is room for improvement. Especially in the areas of goal setting and personnel management, Dutch companies lag behind top countries such as the United States, Germany, Sweden and Japan."
What is good management?
According to the methodology of the World Management Survey, at least four components are crucial for good management. Baarsma explains: "First of all, a company must be organised as efficiently as possible. So as little waste as possible and constantly reason the business processes back from the customer's point of view. That delivers customer value. In this, the Netherlands scores very well; our country is even the leader in this field. In addition, companies should set clear, also non-financial goals for the longer term that they link to ambitious but achievable short-term financial goals. Furthermore, it is important that companies systematically collect, analyse and use data to improve. And good management pays a lot of attention to staff: high-performing employees are rewarded and employees who are better placed elsewhere are given the opportunity and incentive to do so. Especially when it comes to personnel management and setting clear goals, Dutch companies score less well than the top countries."
Source: Rabo Research.
