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Teaching KAIZEN to Small Business Owners: An Experiment in a Metalworking Cluster in Nairobi

In: Experiments for Development: Achievements and New Directions

Author

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  • Yukichi Mano
  • John Akoten
  • Yutaka Yoshino
  • Tetsushi Sonobe
Abstract
In recent years, managerial capital has received attention as one of the major determinants of enterprise productivity, growth, and longevity. This paper attempts to assess the impacts of a management training program on the business performance of small enterprises in a metalworking cluster in Nairobi, Kenya. A previous study of this cluster observed that while several enterprises had successfully expanded operation, the majority had been experiencing declining profits due to increasing competition with imported products and with new entrants in the cluster. Based on the observed differences in management between successful and less successful enterprises, we designed a management training program featuring the basics of KAIZEN, an inexpensive, commonsense approach to management emphasizing the reduction of wasted work and materials, for the less successful enterprises. Although our initial intention was to use this training program as a randomized experiment, we had to abandon randomization and allow every business owner interested in the program to participate in it, due to circumstances beyond our control. This paper finds that business owners operating smaller enterprises tended to be self-selected into training participation. The training effects combined with the self-selection effect, which we estimate with panel data, were statistically significant and particularly stronger on profits than on sales revenues, while other training programs that did not teach KAIZEN had positive effects on sales revenues, not profits. As a result, the participants caught up with and overtook the non-participants in terms of average sales revenues and average profits, respectively.
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  • Yukichi Mano & John Akoten & Yutaka Yoshino & Tetsushi Sonobe, 2013. "Teaching KAIZEN to Small Business Owners: An Experiment in a Metalworking Cluster in Nairobi," NBER Chapters, in: Experiments for Development: Achievements and New Directions, National Bureau of Economic Research, Inc.
    • Handle: RePEc:nbr:nberch:13260
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    Cited by:

    1. González-Uribe, Juanita & Reyes, Santiago, 2021. "Identifying and boosting “Gazelles”: Evidence from business accelerators," Journal of Financial Economics, Elsevier, vol. 139(1), pages 260-287.
    2. Go Shimada & Tetsushi Sonobe, 2021. "Impacts of management training on workers: Evidence from Central America and the Caribbean region," Review of Development Economics, Wiley Blackwell, vol. 25(3), pages 1492-1514, August.
    3. Girum Abebe & Biruk Tekle & Yukichi Mano, 2018. "Changing Saving and Investment Behaviour: The Impact of Financial Literacy Training and Reminders on Micro-businesses," Journal of African Economies, Centre for the Study of African Economies, vol. 27(5), pages 587-611.
    4. Gonzalez-Uribe, Juanita & Reyes, Santiago, 2021. "Identifying and boosting “gazelles”: evidence from business accelerators," LSE Research Online Documents on Economics 103145, London School of Economics and Political Science, LSE Library.
    5. Mariana SEHLEANU & Elena-Simona FLORE, 2019. "Continuous Improvement Through Kaizen Management System: A Case Study," Proceedings of the INTERNATIONAL MANAGEMENT CONFERENCE, Faculty of Management, Academy of Economic Studies, Bucharest, Romania, vol. 13(1), pages 25-36, November.
    6. Keijiro Otsuka, 2020. "Strategy for Cluster-Based Industrial Development in Developing Countries," Discussion Papers 2019, Graduate School of Economics, Kobe University.
    7. Grover,Arti Goswami & Imbruno,Michele, 2020. "Using Experimental Evidence to Inform Firm Support Programs in Developing Countries," Policy Research Working Paper Series 9461, The World Bank.
    8. Arimoto, Yutaka & 有本, 寛 & Kurata, Masamitsu, 2017. "Adoption of Management Practices in the Public Sector of Bangladesh," Discussion Paper Series 654, Institute of Economic Research, Hitotsubashi University.
    9. Bando, Rosangela & Li, Xia, 2014. "The Effect of In-Service Teacher Training on Student Learning of English as a Second Language," IDB Publications (Working Papers) 6596, Inter-American Development Bank.
    10. Rosangela Bando & Xia Li, 2014. "The Effect of In-Service Teacher Training on Student Learning of English as a Second Language," IDB Publications (Working Papers) 86173, Inter-American Development Bank.
    11. Richmond Atta-Ankomah & Johnson Appiah Kubi & Charles Godfred Ackah, 2022. "The Effect of Kaizen on Performance: Evidence from Manufacturing Enterprises in Ghana," The European Journal of Development Research, Palgrave Macmillan;European Association of Development Research and Training Institutes (EADI), vol. 34(2), pages 1167-1192, April.
    12. Go Shimada & Tetsushi Sonobe, 2018. "Impacts of Kaizen Management on Workers: Evidence from Central America and the Caribbean Region," Working Papers 173, JICA Research Institute.
    13. Olga Orynycz & Karol Tucki & Miron Prystasz, 2020. "Implementation of Lean Management as a Tool for Decrease of Energy Consumption and CO 2 Emissions in the Fast Food Restaurant," Energies, MDPI, vol. 13(5), pages 1-26, March.

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    More about this item

    JEL classification:

    • M11 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - Production Management
    • M31 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Marketing and Advertising - - - Marketing
    • M41 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Accounting - - - Accounting
    • O14 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Industrialization; Manufacturing and Service Industries; Choice of Technology
    • C93 - Mathematical and Quantitative Methods - - Design of Experiments - - - Field Experiments

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