Management Practices

Management Practices

1. According to the data which has been compiled from the website and sorted as per the requirement, it can be clearly said that with those countries having the highest mean variables of Overall Management, Monitoring Management, and Target’s Management, it means that they would also be ranked as the most senior.

An example of this can be taken for the United States. This country has the following values for the variable results (mean):

• Overall Management – 3.28 (Actual Rank – 1^st)
• Monitoring Management – 3.52 – (Actual Rank – 2^nd)
• Targets Management – 3.19 – (Actual Rank – 2^nd)

As seen from the above data, it can be definitively said that the country with the highest overall rank can mostly rank high in individual cases.

With regards to the above-created column chart and the comparison of Figure 1.0 in Bloom et al. (2012), the main reason why the values are slightly different is because for Figure 1.0 in the article, the averages are taken across all firms and within each country available in the scoring process, with a total of 9,079 observations being monitored and worked with. However, for our column chart, the total number of countries used in working is 36. Furthermore, the observations level is also not that high, as compared to that used in Figure 1.0 of Bloom et al. (2012).

1. The graphs concerning the requirement in Part c, have been plotted between the United States and Germany, Sweden, and Japan. These three countries have been purposely selected for this comparison as they are the next best options after the United States, in terms of ranking from a global perspective. The graphical representation is enclosed in the Excel working, with the worksheet labeled as 4c)

1. The relationship between the Management score of the 35 countries and the average real GDP of the nations, taken from the source provided, has clearly shown the fact that the GDP graph is higher, in terms of value, when compared to that of the Overall Management score values. This is also because of the log factor, which has been used to convert the value from GDP in Dollars into the value used for scoring purposes.

1. The correlation coefficient between the Overall Management and the Average Real GDP is estimated to be an amount of 0.7202. The correlation coefficient tells us about the standard deviation to the mean. It is a useful statistical tool for understanding the degree of variation in the Overall Management Score and the Average Real GDP values, irrespective of the fact that the initial costs of the Average Real GDP were in $. However, due to them being converted through the Log Function, the benefits are more comparable.

Further, it can be observed that the variation between the two columns in the Excel Worksheet, which is attached for your reference, is on the whole more significant than the values in the Overall Management Score. That could be because of the Log Function being used on the $/Capita of GDP figures, which had been translated into comparable values. The values are different in some instances, with the variation being approximately 45% of the costs of Overall Management.

1. Of the countries in the list, mainly two countries are chosen from Part d), and are the United States of America and Germany. These two countries, in reality, are one of the most developed nations in the world, with trillions of dollar worth economies. Furthermore, the relationship between the two companies, as reflected in the graphs, clearly shows that the United States of America is still the leading economy, in terms of the overall Management score and the Gross Domestic Product per Capita. This is because the economy of the United States is far more developed when compared to that of Germany. Moreover, the fact that the United States is ahead, in terms of Gross Domestic Product per Capita, reflects that their overall economic conditions are better or stronger when compared to that of Germany.

Further, when reviewing the graph, the bar chart clearly shows how the United States graph has overshadowed the figure for Germany’s Overall Management Score. This can be seen in the following display of values for both the United States and Germany

United States – Overall Management – 3.28 | Average Real GDP – 4.14

Germany – Overall Management – 3.18 | Average Real GDP – 4.06

1. With the data provided in the answer e,) of the correlation coefficient is 0.72, as per the working attached in the excel file, the value signified a robust and positive correlation between the Quality of Management’s practices and the real GDP per Capita. In General, terms, when speaking about the Management’s performance, when there are proper controls in place by the Management, to ensure that the operations are performed smoothly, along with the fact that the profitability of the company is not adversely affected due to any miscommunication or lack of Management of an issue. Hence, when there are stricter controls in place by the Management of companies, then their profitability would increase aswell.

On the other hand, the Average Gross Domestic Product, when compared through the Co-Efficient Co-Relation, signifies that the relationship and direction of the variable are positive. This means that with one aspect of the equation increasing, it also would increase the other side of the equation, with a multiplication factor of 0.72. The primary relationship between the two variables is explained in an example of food prices and gas prices. If the gas prices are increased, the food prices are naturally increased, due to the change in costs for utility expense.

Hence, concerning the above variation, this is a positive relationship between the two variables, with one aspect of it increasing the other. Demand for One will raise the Supply for another. Furthermore, it also shows the difference it makes where the overall management score is better, as compared to that of lower management score companies. Higher controlled firms tend to perform better, hence improving the overall profitability of the country, increasing the GDP.

Poor quality of Management will always lead towards a declining Overall Average GDP per Capita Ratio, as they are directly relate