Agile management and productivity: Empirical evidence from a large Chinese enterprise

Abstract

In a large-scale (N = 4,000) empirical study with a Chinese state-owned enterprise, we investigate the impact of agile management (Amoeba Management, Inamori 2012) on the performance of firm's shops. Amoeba Management practices empower employees to take over managerial responsibilities and strategic decisions. Whereas the delegation of decision-making authority can improve firm's outcomes when agents have relevant information relevant on the operational efficiency that is not available to the principal, it can also backfire if agents are not competent enough or their interests are missaligned. Using detailed company’s data, we analyze the effects of a gradual (and quasi-random) shift from the central management system to the Amoeba Management system with decision-making authority in branch stores. We observe a significant and positive effect of empowering local store managers with strategic and managerial decisions on the stores' revenues and profits. In a separate survey, we study the factors driving successful delegation.