Management cultures and regional development: High performance management and the location of new manufacturing plants

In-depth case studies of new manufacturing plants are used to motivate a new business location model that incorporates management practices and cultures as location factors. This model is tested using US data on the location of new manufacturing plants. It is found that plants that adopt high performance management practices and cultures rely on different criteria when making their location decisions from those plants that are managed in more traditional ways. Omitting management culture from studies of business location may result in biased estimates of the importance of various traditional location factors. By demonstrating that location decisions are differentiated according to the management practices of firms, it is argued that regional development planning should pay more attention to specific business characteristics and that regional development policy include programmes that strengthen complementarities between management practices and the regional economic environment.