The Impact of Managerial Change on Performance. The Role of Team Heterogeneity
AbstractWhen a key responsibility of a manager is to allocate more or less attractive tasks to subordinates, these subordinates have an incentive to work hard and demonstrate their talents. As a new manager is less well acquainted with these talents this incentive mechanism is reinvigorated after a management change but only when the team is sufficiently homogenous. Otherwise, a new manager quickly makes similar choices as the old one did. We investigate this hypothesis using a large data set on coach dismissals in the German football league where the selection of players is indeed a key task of the coach. Indeed, we find substantial evidence that coach replacements enhance team performance (only) in homogenous teams. Moreover, from a methodological point of view, we argue that there is typically a negative selection bias when evaluating succession effects, which might reconcile previous findings of no (or even negative) effects with the vast number of dismissals observed in reality. --
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Bibliographic InfoPaper provided by Verein für Socialpolitik / German Economic Association in its series Annual Conference 2013 (Duesseldorf): Competition Policy and Regulation in a Global Economic Order with number 79825.
Date of creation: 2013
Date of revision:
Other versions of this item:
- Sandra Hentschel & Gerd Mühlheusser & Dirk Sliwka, 2012. "The Impact of Managerial Change on Performance. The Role of Team Heterogeneity," CESifo Working Paper Series 3950, CESifo Group Munich.
- Hentschel, Sandra & Muehlheusser, Gerd & Sliwka, Dirk, 2012. "The Impact of Managerial Change on Performance: The Role of Team Heterogeneity," IZA Discussion Papers 6884, Institute for the Study of Labor (IZA).
- D22 - Microeconomics - - Production and Organizations - - - Firm Behavior: Empirical Analysis
- J44 - Labor and Demographic Economics - - Particular Labor Markets - - - Professional Labor Markets and Occupations
- J63 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Turnover; Vacancies; Layoffs
This paper has been announced in the following NEP Reports:
- NEP-ALL-2014-02-02 (All new papers)
- NEP-CSE-2014-02-02 (Economics of Strategic Management)
- NEP-HRM-2014-02-02 (Human Capital & Human Resource Management)
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