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Are Management Practices Changing in Developing Economies?


Are Management Practices Changing in Developing Economies?

Workers who feel a sense of belonging stay in their jobs longer.
A woman hanging dyed yarn to dry at a textile mill on the outskirts of Agartala
Researchers examined a textile mill where management tactics changed as a result of a crisis. | Reuters/Jayanta Dey

Management theory says that empowering employees works, especially to create a culture of innovation. On the other hand, the reality is sometimes the opposite of that, with workers being driven more by implied threats than empowerment.

So, what is truly the right management approach? A series of studies in two textile mills in northern India by researchers from Stanford is looking at that question, with intriguing results. So far, the results lend credence to the first approach, showing that management practices that foster a sense of belonging help create higher worker satisfaction and lower employee turnover.

The Stanford Institute for Innovation in Developing Economies (SEED) has just awarded a grant to Stanford professor Hazel Markus, faculty director of Stanford SPARQ: Social Psychological Answers to Real-world Questions, to continue the research. Her team will examine whether empowering employees helps create better outcomes, from financial results to innovations.

The study examined a mill where management tactics changed as a result of a crisis. In the 1980s, several leaders at the mill in northern India were killed in an uprising. “Working conditions were terrible. Managers publicly belittled workers and hit workers. There was no compensation for extra hours,” says Alana Conner, SPARQ executive director.

The family that owned the mill handed over management to a man newly married into the family, who made improving conditions one of his central goals. (The names of the mills are not being released to protect the research process.)

One of the most striking features is a sign at the entrance that reads, ‘This plant is mine.’
Alana Conner

The researchers compared this mill A to a nearby mill B to assess the employees’ sense of belonging and dedication to their jobs. Mill A features a well-kept workers’ village, and a driveway lined with ashoka trees. Rituals like mill songs are incorporated into the workday. The workforces at both mills are drawn from the array of cultures in India, which can make creating a sense of community difficult, but in mill A, there are programs held to celebrate the many festivals on the Indian calendar. And one of the most striking features is a sign at the entrance that reads, “This plant is mine,” Conner says. While mill B lacks these amenities, it pays workers more than mill A.

In a survey, SPARQ researchers asked the 312 workers in both mills a series of questions, such as how their boss would react if they suggested a new idea or questioned the efficiency of a process.

The researchers found workers from mill A scored significantly higher on all measures, including the sense of belonging, as well as self-efficacy and community efficacy — the sense people had that they or their community working together could change their surroundings. The researchers’ hypothesis, which they will continue to test in upcoming surveys and a site visit, is that what they call the “interdependent management style” drives belonging.

The next phase of the research will seek to identify which particular management practices lead to a sense of belonging, with an eye toward scaling the successful practices at other mills — or even in other industries and countries. The questions of how to motivate workers, how to help them be innovative, and to what extent any of those management practices affect outcomes are universal. Then, the question is whether having workers with a sense of agency and belonging helps make the mill better as a business, says Conner. “That’s one of the things we want to look at, to help companies make decisions about the best practices.”

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