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Short- and medium-run impacts of management training: An experiment in Tanzania

Author

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  • Higuchi, Yuki
  • Mhede, Edwin P.
  • Sonobe, Tetsushi

Abstract

While entrepreneurs play a key role in industrial development, the managerial capacity of those in developing countries seems limited. A number of randomized controlled trials have been conducted to evaluate the impacts of management training, coaching, or consultation programs. These studies found that the interventions had positive impacts on management knowledge and management practices, but the impacts on business performance—measured in terms of sales revenue, value added, or profit—were often statistically insignificant. Such mixed results may be attributed to experiment designs, including training content and the time elapsed till the follow-up observation. The present study attempts to substantiate this hypothesis by means of a randomized controlled trial of management training in Tanzania that targets 113 small manufacturers. As in some recent studies, it extends the observation period to three years to examine the trajectory of training impacts. Unlike many other studies, it is an impact assessment of training programs that covered quality control and production management as the training topics in addition to entrepreneurship, marketing, and record keeping. The treated firms made adaptive efforts to select useful practices and modify them to fit their business operation. It finds that the training effects on business performance are large and statistically significant, particularly in the medium-run.

Suggested Citation

  • Higuchi, Yuki & Mhede, Edwin P. & Sonobe, Tetsushi, 2019. "Short- and medium-run impacts of management training: An experiment in Tanzania," World Development, Elsevier, vol. 114(C), pages 220-236.
  • Handle: RePEc:eee:wdevel:v:114:y:2019:i:c:p:220-236
    DOI: 10.1016/j.worlddev.2018.10.002
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    Cited by:

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    2. M. Mehrab Bakhtiar & Gautam Bastian & Markus Goldstein, 2022. "Business Training and Mentoring: Experimental Evidence from Women-Owned Microenterprises in Ethiopia," Economic Development and Cultural Change, University of Chicago Press, vol. 71(1), pages 151-183.
    3. Daniela Scur & Raffaella Sadun & John Van Reenen & Renata Lemos & Nicholas Bloom, 2021. "The World Management Survey at 18: lessons and the way forward," Oxford Review of Economic Policy, Oxford University Press, vol. 37(2), pages 231-258.
    4. Cromhout, Dylan & Duffett, Rodney, 2022. "Exploring the impact of student developed marketing communication tools and resources on SMEs performance and satisfaction," Small Business International Review, Asociación Española de Contabilidad y Administración de Empresas - AECA, vol. 6(1), pages 422-422, January.
    5. Otsuka, Keijiro & Ali, Mubarik, 2020. "Strategy for the development of agro-based clusters," World Development Perspectives, Elsevier, vol. 20(C).
    6. Keijiro Otsuka, 2020. "Strategy for Cluster-Based Industrial Development in Developing Countries," Discussion Papers 2019, Graduate School of Economics, Kobe University.
    7. Claudia Custodio & Diogo Mendes & Daniel Metzger, 2021. "The impact of financial education of executives on financial practices of medium and large enterprises," NOVAFRICA Working Paper Series wp2105, Universidade Nova de Lisboa, Nova School of Business and Economics, NOVAFRICA.
    8. David Alfaro‐Serrano & Tanay Balantrapu & Ritam Chaurey & Ana Goicoechea & Eric Verhoogen, 2021. "Interventions to promote technology adoption in firms: A systematic review," Campbell Systematic Reviews, John Wiley & Sons, vol. 17(4), December.
    9. Valentina A. Assenova, 2020. "Early-Stage Venture Incubation and Mentoring Promote Learning, Scaling, and Profitability Among Disadvantaged Entrepreneurs," Organization Science, INFORMS, vol. 31(6), pages 1560-1578, November.
    10. Grover,Arti Goswami & Imbruno,Michele, 2020. "Using Experimental Evidence to Inform Firm Support Programs in Developing Countries," Policy Research Working Paper Series 9461, The World Bank.
    11. Sahar Moazzeni & Sobhan Mostafayi Darmian & Lars Magnus Hvattum, 2023. "Multiple criteria decision making and robust optimization to design a development plan for small and medium-sized enterprises in the east of Iran," Operational Research, Springer, vol. 23(1), pages 1-32, March.
    12. Shamsuzzoha & Makoto Tanaka, 2021. "The role of human capital on the performance of manufacturing firms in Bangladesh," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 42(1), pages 21-33, January.
    13. Mckenzie,David J., 2020. "Small Business Training to Improve Management Practices in Developing Countries: Reassessingthe Evidence for 'Training Doesn’t Work'," Policy Research Working Paper Series 9408, The World Bank.
    14. Igarashi, Takiko & Takeda, Asami & Truong, Hoa T. & Sonobe, Tetsushi, 2022. "Evolving Impacts of the COVID-19 Pandemic on Micro, Small, and Medium-Sized Enterprises in Asia," ADBI Working Papers 1286, Asian Development Bank Institute.
    15. Yuki Higuchi & Edwin Paul Mhede & Vu Hoang Nam & Tetsushi Sonobe, 2020. "Medium-Run Impacts of Management Training in Garment Clusters," The World Bank Economic Review, World Bank Group, vol. 34(Supplemen), pages 68-71.
    16. Go Shimada & Tetsushi Sonobe, 2018. "Impacts of Kaizen Management on Workers: Evidence from Central America and the Caribbean Region," Working Papers 173, JICA Research Institute.

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    More about this item

    Keywords

    Africa; Randomized controlled trial; Management training; Kaizen; Medium-run impacts;
    All these keywords.

    JEL classification:

    • L2 - Industrial Organization - - Firm Objectives, Organization, and Behavior
    • M1 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration
    • O1 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development

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