Economic Sociology Seminar presentation by Rembrand Koning, Harvard Business School.
Learning Management Through Networks: Evidence from a Field Experiment in the Indian Startup Ecosystem Management is a critical input to firm performance. Yet, there remains substantial heterogeneity in which managers have productive styles and therefore which firms perform well. Prior work on the impact of managers on firm performance and the role of managerial training suggest diffusing productive management more broadly is challenging. In this article we argue that informal networks may allow for the wider diffusion of productive management across firms, primarily because of the tacit nature of management knowledge. Using a randomized field experiment with 100 high-growth technology firms (avg. age 3 years, and 13 employees) we show that founders who received advice from other founders with more intensive people management styles, were more likely to reorient management activity in their firm, and as a consequence experience lower attrition and higher rates of survival. For founders who already had more intensive management style, such advice also increases top-line employee growth through an increase in hiring rates, though this effect is somewhat offset by the fact that intensive managers are also more likely to fire employees. Our study identifies a key network mechanism through which management can be diffused more widely and the conditions under which it impacts firm performance.