Does Management Matter? — Accenture-Consultant RCT in Mumbai's Textile Plants

In 2008, Stanford and World Bank researchers (Bloom, Eifert, Mahajan, McKenzie and Roberts) randomly assigned 17 large Indian textile firms operating 28 plants around Mumbai to receive five months of free management consulting from Accenture, or to a control group that received only a short diagnostic.

The trial tested the causal impact of intensive management consulting on factory productivity, quality and profitability, in firms with baseline adoption of standard management practices ranging from just 8% to 55% of a 38-point scorecard.

The consultants worked on factory operations, quality control, inventory management, human resources and sales/order management over five months of free consulting.

Within four months, treated plants raised output by 9.4%; within a year, productivity was up 16.6%, quality defects fell by roughly half, and inventory levels dropped, adding an estimated US$325,000 in annual profit per treated plant. A later NBER follow-up found the gains persisted for years after the consultants left, and firms that adopted better practices went on to open more plants.

The sample was large, formal firms in the top 1% of Indian manufacturers by employment and sales — the study says little about whether five months of top-tier consulting is affordable or effective for small or informal enterprises, and the intervention itself (a global consultancy donating senior staff time) is not cheap to replicate at scale without a similar subsidy.