How Management Practices Differ in the EU-27

Investment Rating - The report does not explicitly provide an investment rating for the industry analyzed Core Insights - The analysis focuses on the adoption of management practices in the private sector across the EU-27, revealing significant variations in management practices and their correlation with productivity [2][4][60] - A consolidated index of management practices is developed, encompassing monitoring, target setting, and creating incentives, which shows a positive correlation with firm-level productivity [2][4][48] Summary by Sections Management Practices Index - The management practices index is constructed using eight variables categorized into monitoring, target setting, and incentives, with scores ranging from 0 to 100 [5][10] - The average management score across the EU-27 is approximately 47, with Malta and Bulgaria scoring the highest, while Portugal and Italy score the lowest [19][27] Geographical Distribution - Management scores vary significantly across EU countries, with Northern European regions generally outperforming Southern regions [21][24] - Regions hosting administrative capitals tend to have higher management scores, indicating a correlation between economic centers and management practices [25][30] Firm-Level Characteristics - Larger firms, those with external management, and higher education levels of top managers are associated with better management practices [32][33][47] - Family-managed firms tend to have lower management scores compared to those with external management, highlighting the impact of management structure on performance [36][37] Management Practices and Productivity - A strong positive correlation exists between management practices and productivity, with a 10-percentage point increase in management scores linked to a 20% increase in sales per worker [54][55] - The report emphasizes that structured management practices contribute to better economic performance, supporting the need for improved management practices across firms [52][64]