Developing the Management and Expectations Survey

Better managed firms may be more agile, innovative and productive. They may also be more resilient to demand chain disruption and demand uncertainty.

In 2017 and working closely with the UK Office for National Statistics (ONS), ESCoE researchers created the Management and Expectations Survey (MES) to analyse business management practices, current performance and future expectations. This is the largest ever survey of management capabilities in Great Britain, covering a population of firms across industries, regions, firm sizes and ages. The survey built on the World Management Survey and Management and Organizational Practices Survey in the US, and previous work from Nicholas Bloom and John Van Reenan.

In 2020, ESRC funded an update to the survey to provide real-time insight on the immediate impact of COVID-19 on employment, investment and sales growth. Supported by HM Treasury, this survey was updated in 2023 to account for innovation by firms since the pandemic, particularly AI.

Analytical work has explored the relationship between management practices and firms’ dynamic capabilities, their resilience to shocks and their forecasting ability. The surveys have also helped us develop a set of key findings about management practices.

During the pandemic, we collected information fortnightly and monthly on COVID-19, with responses from businesses. With insight from a Business Engagement Group including McKinsey, CBI, CMI, Be the Business, and BEIS, we created a set of COVID-19 questions that we ask businesses. We updated our Management and Expectation Survey (MES) with these questions and placed the updated survey in the field in Autumn 2020. A further wave of this survey was put into the field in Autumn 2023.

Using MES, Business Structure Database (BSD) and Association of British Insurers (ABI) data, we are now exploiting the panel relationship between management practices and business performance. We are investigating to what extent the performance-management relationship is driven by this “super-forecasting” ability and make methodological innovations in TFP estimation using this data. We are also looking at differential exposures to economic shocks to causally identify their impacts across firms/geographies.

We are using international longitudinal data on remote working and granular firm-level data using DMP /the Business Insights and Conditions Survey (BICS) to explore firms’ use of remote labour and potential capital. Working with the Bank of England and The Productivity Institute, we are conducting firm-level analysis of the redirection of investment towards intangibles during COVID-19 and implications for the measurement of labour hours, capital and productivity. We will draw international comparison using similar data sources elsewhere. We will exploit the publication of new ONS capital asset data on assets by regions and industries to drill down into the effects on regional productivity and to explore indirect impacts on congestion and implications for net-zero.

• 2017 data showed a significant correlation between management practices and labour productivity. We found greater prevalence of structured management practices among services than production industries. We also found more structured practices among larger, foreign-owned, non-family-owned and businesses with more-educated workers than among smaller, domestically-owned, family-owned and firms with less-educated workers .

• 2020 data showed that most firms had adapted continuous improvement and targets, but KPIs were lacking. Overall management practices had improved since 2016. Improvements in small firms were behind the overall improvement in management score and the South East and Scotland led the rest of Great Britain on management practices scores.

Industrial strategy: The research informs industrial strategy as it tells us about the mechanisms that support growth. Analytical work was included in the Competition and Markets Authority’s recent response to the industrial strategy consultation.

Measuring the public sector: This work has informed the Public Services Productivity Review, a key piece of work to achieve the Government’s important aim to improve productivity in the public sector. Notably, it has led to the development of a new Public Sector Management Practices Survey.

Government support schemes: Government programmes like ‘Help to Grow Management’ support firms to improve their management practices. Our research informs these schemes by illustrating the difficulty of targeting business interventions and encouraging companies to take up support. It also illustrates the difficulty of policy evaluation.

Firm resilience: Tracking firms over time during the pandemic showed how management practices have impacted firms’ decision making in response to economic shocks and uncertainty. Our work also supported the formation of WFH Research and the Survey of Working Arrangements and Attitudes. Ongoing research will help the Bank of England and UK Government better understand firms’ resilience to economic shocks to inform policymaking.

Read more about the impact of this project in this case study.

Jones, K., Schneebacher, J., Mizen, P., Riley, R., Li W., Managing to adapt: Structured management practices and firm resilience, ESCoE Discussion Paper Series, ESCoE DP 2024-04. November 2024.

Management and Expectations survey Quality and Methodology (QMI) report, Office for National Statistics, September 2024.

Riley, R., Meng, C., Mizen, P. and Schneebacher, J. “Who wants to Improve their Management? Evidence from a Failed Experiment”, Session 2 Management, learning and experimentation,  Research Symposium on Management, Innovation, and Firm Performance, 28th June, Jubilee Campus, University of Nottingham

Schneebacher, J., Li, W., Mizen, P. and Riley, R. “Managing to Adapt: Structured Management Practices and Firm Resilience” Session 1 Managing for efficiency and performance, Research Symposium on Management, Innovation, and Firm Performance, 28th June, Jubilee Campus, University of Nottingham

Meng, C,. Mizen, P., Riley, R. and Schneebacher, J. “Who wants to Improve their Management? Evidence from UK Microdata” Venice Summer Institute 2023, Decision Making in Firms – Big Data and Management Practices, Venice 21-22 June 2023

Bloom, N., Kawakubo, T., Meng, C., Mizen, P., Riley, R., Senga, T. and Van Reenen, J. “Do Well Managed Firms Make Better Forecasts?” Venice Summer Institute 2023, Decision Making in Firms – Big Data and Management Practices, Venice 21-22 June 2023

‘Special Session C: Management and Productivity – Lessons from the Management and Expectations Survey’, ESCoE Conference on Economic Measurement, King’s College London, 17-19 May 2023

Forth, J., Meng, C. and Riley, R. ‘Investigating Businesses’ Responses to COVID via Web Crawling and Text Mining‘ ESCoE Conference on Economic Measurement, Contributed Session H: Estimating economic activity with new methods and data, King’s College London, 17-19 May 2023.

Bloom, N., Kawakubo, T., Meng, C, Mizen, P., Riley, R., Senga, T., Van Reenen, J. ‘Do Better Managed Firms Make Better Forecasts?’ NBER working paper No 29591, December 2021.

Schneebacher, J. ‘What do we know about management practices in Great Britain?‘, PrOPEL Hub Blog, November 2021.

Bloom, N., Mizen, P., Reenen, J. V. and Riley, R., ‘Reimagine Management and Productivity in a Post Pandemic World’, PrOPEL Hub Panel Discussion, 15 September 2021. Video Recording.

Kawakubo, T. ‘Managing Expectations: How Better Managed Firms Make Better Macro and Micro Forecasts’ ESCoE Conference on Economic Measurement 2021 Poster Exhibition, 11-13 May 2021. Project Presentation.

Management and Expectations Survey (MES) 2020, Office for National Statistics

Awano, G., Bloom, N., Dolby, T., Mizen, P., Riley, R., Senga, T., Vyas, J. and Wales, P (2018) ‘Management practices and productivity in British production and services industries – initial results from the Management and Expectations Survey: 2016‘ 6 April 2018, Office for National Statistics