What Do Managers Do? An Economist's Perspective

Economic activity requires motivating and coordinating individuals to work toward a common goal. These aims are the purview of managers. What, however, do managers actually do? We outline three defining principles of economic research on managers—technological determinism, skill distinction, and managerial self-interest—and relate them to the set of skills reported by managers on LinkedIn. We highlight “managers of people” and “managers of projects” as a useful distinction for categorizing theoretical, empirical, and descriptive accounts of managers. In light of our three principles, we review research on how managers can create value—namely, by hiring, retaining, training, monitoring, evaluating, allocating, and supervising. We propose that managers apply these skills in different proportions depending on the production technology in which they are embedded and that research on managers should seek to produce generalizable insights by exploring managers’ contributions in different contexts.