Track: Operations Management

Abstract

Although technology is a primary input for productivity, it may be a burden to seek, acquire and adopt modern and expensive technology for firms in developing countries such as Vietnam. Management practices may substitute costly technology to improve labor productivity in the manufacturing sector. This study of 35 countries recognizes the strong positive correlation between labor productivity and management, merging the World Management Survey and Conference Board datasets. A closer analysis of 11,702 observations in the manufacturing sector shows that larger firms tend to use more management practices. A comparative analysis of adopting management practices indicates that Vietnam’s firms have lower mean management scores than high-income nations on average. In Vietnam, firms in the low-tech manufacturing sectors, such as furniture and textile production, have lower management scores. Other results are that Vietnam’s operations management and talent management scores are poorer than overall management scores. The results suggest that managers in Vietnam’s manufacturing firms must invest more in adopting management practices, which leads to a better output rate. This investment will also enhance human capital for firms.