Despite the constant barrage of low ranking for the US in the world on such topics as health care and unemployment benefits, there is thankfully one area where we still are #1: Business Management. According to a study undertaken by European researchers, it seems that the U.S. system of competition and freedom still win out.

The first major advantage for U.S. companies is that the competitive environment means that bad management decisions put people out of business. Another way to say it is that U.S. management has to keep evolving and improving, because their direct competitors are constantly getting better and raising the bar. Improve or lose relevancy with the customers.

The second major advantage is that most American companies value PEOPLE. While the study points to a higher level of education for the general population, I think the human capital element in U.S. firms is unrivaled. This is one of the key elements for any branded business. The humans behind a brand are what define and ultimately ensure the success or failure. I know firsthand that the more you invest in finding the right group of people, the more you encourage them to be the best they can be, the more money and success that the brand enjoys.

The third, and I think the most important difference, is American businesses can hire and fire people much easier than any other country in the world. While that sounds bad for the employees that get fired, it makes for a much more profitable enterprise. In addition, any employee that gets hired and subsequently let go is better off to find a work situation that fits their needs.

Work forces with incentives based on meritocracy, not seniority are the widespread in America. Many countries have world-class companies with amazing management, but on the whole, most countries allow a large percentage of mediocre companies to survive in their home market due to government regulations against competition or subsidies.

The ability of U.S. firms not to get stuck with bad employees is the main reason we are still on top from a business performance point of view.