Major study paints picture of who's managing our businesses

The most comprehensive survey of Australian management capability ever conducted has underlined the continuing gender gap at senior levels, while also uncovering clear differences between firms that are “innovation active” and those that are not.

The inaugural Australian Management Capability Survey (MCS), developed with the help of researchers from UTS Business School and run by the Australian Bureau of Statistics, delved into the attributes and experiences of more than 13,340 businesses, of all sizes and across all sectors of the economy.

As well as size and sector, the study also classified businesses by innovation status – whether they reported being actively involved in innovation activities or not.

“We now have a dataset that enables researchers to reliably analyse key management characteristics – and the extent to which they are drivers or barriers to innovation capability and performance,” innovation specialist Professor Roy Green said.

“This data casts light not only on management practices and productivity but also the role of innovation, and it will allow us to benchmark these practices across time and internationally.”

At a launch event in Canberra, Department of Industry, Innovation and Science (DIIS) Chief Economist Mark Cully said the survey was “a milestone”, building on previous studies to produce data that covered all private sector firms in the economy.

This data casts light not only on management practices and productivity but also the role of innovation

Professor Green and Associate Professor Renu Agarwal, Associate Professor Chris Bajada and Dr Paul Brown of UTS’s Centre for Business and Social Innovation are chief investigators on the MCS project

Collaborating with the Office of the Chief Economist, the DIIS, the ABS and Stanford University, the UTS researchers helped devise the questions for the survey and will now further analyse the collected data.

The survey’s 54 questions addressed key indicators of management and organisational capability, including performance monitoring, target setting, incentives, people management, and strategic planning.

“All of these have significant influences on firm productivity,” said Associate Professor Agarwal.  

The data also provides insights into various strategic decisions made by firms on digital businesses, supply chain and environmental management.

It would also feed into evaluation of industry programs where success depends on improving management capability – such as the Industry Growth Centres and Entrepreneurs Programme, she said.

Associate Professor Agarwal and Dr Brown attended the launch for the release of the 8172.0 Management and Organisational Capabilities of Australian Businesses 2015-2016 dataset, based on the Australian Management Capability Survey, in Canberra.       

Initial results released at the launch included the finding that four out of five of the businesses surveyed had a male principal manager.

The preliminary results also showed that, among other things, innovation-active firms tended to have younger principal managers, were more likely to have a written strategic plan, and were more likely to engage in environmental management.

One in five businesses reported being significantly affected by environmental factors, “but innovation-active businesses were more likely to be asking questions about what to do about that”, Dr Brown said.

The inaugural MCS was conducted in the December quarter of 2016. It extends the work of the landmark Management Matters report by Professor Green for the Australian Government in 2009, a project where Associate Professor Agarwal was Research Director and which was part of a broader international study, the World Management Survey.

“The 2009 study had a very significant impact on government policy and our thinking about the role of management in building innovation capability at the firm level,” Professor Green said. “Analysis of this new survey data will enable us to give more attention to the drivers of innovation, as well as to the barriers.”