Management practices play an integral part to the ongoing success and performance of businesses. Businesses can implement different management practices; such as developing strategic business plans or setting up and monitoring key performance indicators (KPI). However, recent research found that 58 per cent of Australian businesses have either no strategic plan or no monitoring of KPIs. Only 6 per cent of Australian businesses produce a written strategic plan and monitor three or more KPIs across two or more areas. Differences in management capability account for approximately 30 per cent of productivity differences between countries.
In this factsheet, we show the linkage between the increase in educational attainment and likelihood of being a manager, and their implementation of strategic management and environmental management practices in the businesses they run.
Higher educational attainment leads to more manager jobs...
We found the likelihood of being employed as a manager increases with the highest level of educational attainment (Figure 1). This finding held after controlling for a variety of confounding factors such as age and industry.
…with principal managers that are more strategic and productive…
US research also shows that businesses with higher levels of strategic management are associated with higher productivity, profitability and growth. We follow the classification of the level of the businesses’ strategic management outlined in Moran et al. (2018).2 Using a multinomial regression and controlling for a variety of factors, including business size, we found that higher levels of education of the principal manager (for example, Chief Executive Officers or Managing Directors) had a significant positive correlation with how strategic the management practice was in the business. Conversely, lower education of the principal manager had a significant positive correlation with Low Engagement strategic management in the business. Low Engagement level includes little to no strategic planning nor monitoring of KPIs (Figure 2).
…with a growing focus on environmental impacts
Business management is a fundamental driver of environmental impact around the world, and increasing focus on reducing pollution, waste, deforestation and biodiversity loss has become a global trend in many high performing organisations.  Past research in Queensland has not found a correlation between the principal manager’s educational attainment and the level of environmental awareness or environmental practices. We use the environmental management capability (EMC) score outlined in Agarwal et al. (forthcoming)  to test the association between the educational attainment of the principal manager and the use of environmental management practices in the business. Even after controlling for other factors relating to the business and characteristics of the principal manager, we found a small but positive relationship between the EMC score and the educational attainment of the principal manager (Figure 3). However, educational attainment is of lesser importance than business size and industry sector.
Data and methodology
The ANZSCO occupation analysis in this paper used linked records from the MADIP Basic Longitudinal Extract 2011-2016 (2016 Cohort) (Cat. No. 1700.0, Microdata: Multi-Agency Data Integration Project, Australia) where persons were aged 30 to 64 years (inclusive), resided in Australia on Census night (excluding overseas visitors), were not currently studying, and were employed. To control for confounding factors, randomised control trials were simulated by finding groups of statistically identical people across the following covariates: personal income, equivalised household income, social-economic status (IRSAD), age group, gender, Indigenous status, remoteness by state/territory, English-speaking country of birth, marital status, family type (coupled or single person with or without dependent children), industry of employment. This method provides the strongest possible evidence of cause and effect in cross-sectional data.
The strategic and environmental management capability analysis in this paper used the Management and Organisational Capability Survey, 2015-16 (Cat. No. 8172.0.55.001, microdata). Strategic management classifications were derived from survey variables grouping number of key performance indicators and number of key performance indicator topics. A multinomial regression with significance was run on level of highest educational attainment, age, sex, years of experience, business operative years, foreign ownership, industry, and business size. Environmental management capability scores were calculated using survey variables based on environmental management practices. A multinomial regression model was run on highest educational attainment, age, sex, years of experience, business operative years, foreign ownership, industry, and business size, against categorised environmental management capability scores.
 Alfred Chandler suggests that professional managers with detailed knowledge of finance, strategy and other aspects of business are fundamental in the success of businesses in modern capitalism. See Chandler, A. (1984) The emergence of managerial capitalism. Business History Review 58(4): 473-503.
 Moran I, Balaguer A, Majeed O, Agarwal R, Bajada C, Brown PJ. (2018). Strategic management in Australian businesses. Australian Government Department of Industry, Innovation and Science, Canberra, Australia
 Bloom, N., Lemos, R. & Sadun, R. (2013). Does Management Matter in Schools? Discussion Papers 13-032, Stanford Institute for Economic Policy Research.
 Buffington, C., Foster, L., Jarmin, R., & Ohlmacher, S. (2017). The management and organizational practices survey (MOPS): An overview 1. Journal of Economic and Social Measurement, 42(1), 1-26.
 Engel H., Enkvist P-A., Henderson K. (2015) How companies can adapt to climate change. McKinsey & Co.
 Lash J. and Wellington (2007) Competitive Advantage on a warming planet. Harvard Business Review. HBS: Cambridge, Massachusetts.
 Gadenne, D. L., Kennedy, J., & McKeiver, C. (2009). An empirical study of environmental awareness and practices in SMEs. Journal of Business Ethics, 84(1), 45-63.
 Agarwal, R., Bajada, C., Brown, P., Moran, I., Balaguer, A.(forthcoming). Development of Management Capability Scores. Australian Government Department of Industry, Innovation and Science, Canberra, Australia.