The Impact of Managerial Change on Performance: The Role of Team Heterogeneity
When 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.
|Date of creation:||Sep 2012|
|Date of revision:|
|Contact details of provider:|| Postal: |
Phone: +49 228 3894 223
Fax: +49 228 3894 180
Web page: http://www.iza.org
|Order Information:|| Postal: IZA, Margard Ody, P.O. Box 7240, D-53072 Bonn, Germany|
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Feess Eberhard & Muehlheusser Gerd & Walzl Markus, 2004.
050, Maastricht University, Maastricht Research School of Economics of Technology and Organization (METEOR).
- Edward P. Lazear & Sherwin Rosen, 1979.
"Rank-Order Tournaments as Optimum Labor Contracts,"
NBER Working Papers
0401, National Bureau of Economic Research, Inc.
- Nieken, Petra & Stegh, Michael, 2010. "Incentive Effects in Asymmetric Tournaments Empirical Evidence from the German Hockey League," Discussion Paper Series of SFB/TR 15 Governance and the Efficiency of Economic Systems 305, Free University of Berlin, Humboldt University of Berlin, University of Bonn, University of Mannheim, University of Munich.
- O'Keeffe, Mary & Viscusi, W Kip & Zeckhauser, Richard J, 1984. "Economic Contests: Comparative Reward Schemes," Journal of Labor Economics, University of Chicago Press, vol. 2(1), pages 27-56, January.
- Maria De Paola & Vincenzo Scoppa, 2012. "The Effects of Managerial Turnover," Journal of Sports Economics, , vol. 13(2), pages 152-168, April.
- Hoffler, Felix & Sliwka, Dirk, 2003. "Do new brooms sweep clean? When and why dismissing a manager increases the subordinates' performance," European Economic Review, Elsevier, vol. 47(5), pages 877-890, October.
- Uwe Sunde, 2009.
"Heterogeneity and performance in tournaments: a test for incentive effects using professional tennis data,"
Taylor & Francis Journals, vol. 41(25), pages 3199-3208.
- Sunde, Uwe, 2009. "Heterogeneity and performance in tournaments: A test for incentive effects using professional tennis data," Munich Reprints in Economics 19585, University of Munich, Department of Economics.
- Lien, Da-Hsiang Donald, 1990. "Corruption and allocation efficiency," Journal of Development Economics, Elsevier, vol. 33(1), pages 153-164, July.
- Berger, Johannes & Nieken, Petra, 2010. "Heterogeneous Contestants and Effort Provision in Tournaments - an Empirical Investigation with Professional Sports Data," Discussion Paper Series of SFB/TR 15 Governance and the Efficiency of Economic Systems 325, Free University of Berlin, Humboldt University of Berlin, University of Bonn, University of Mannheim, University of Munich.
- Rick Audas & Stephen Dobson & John Goddard, 1999. "Organizational performance and managerial turnover," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 20(6), pages 305-318.
- Alannah Orrison & Andrew Schotter & Keith Weigelt, 2004. "Multiperson Tournaments: An Experimental Examination," Management Science, INFORMS, vol. 50(2), pages 268-279, February.
- Bull, Clive & Schotter, Andrew & Weigelt, Keith, 1987.
"Asymmetric Tournaments, Equal Opportunity Laws and Affirmative Action: Some Experimental Results,"
87-33, C.V. Starr Center for Applied Economics, New York University.
- Schotter, Andrew & Weigelt, Keith, 1992. "Asymmetric Tournaments, Equal Opportunity Laws, and Affirmative Action: Some Experimental Results," The Quarterly Journal of Economics, MIT Press, vol. 107(2), pages 511-39, May.
- Schotter, Andrew & Weigelt, Keith, 1990. "Asymmetric Tournaments, Equal Opportunity Laws And Affirmative Action: Some Experimental Result," Working Papers 90-14, C.V. Starr Center for Applied Economics, New York University.
- Heckman, James J. & Lalonde, Robert J. & Smith, Jeffrey A., 1999. "The economics and econometrics of active labor market programs," Handbook of Labor Economics, in: O. Ashenfelter & D. Card (ed.), Handbook of Labor Economics, edition 1, volume 3, chapter 31, pages 1865-2097 Elsevier.
- Mark Gradstein, 1995. "Intensity Of Competition, Entry And Entry Deterrence In Rent Seeking Contests," Economics and Politics, Wiley Blackwell, vol. 7(1), pages 79-91, 03.
- Taylor, Curtis R, 1995. "Digging for Golden Carrots: An Analysis of Research Tournaments," American Economic Review, American Economic Association, vol. 85(4), pages 872-90, September.
- Nti, Kofi O, 1999. " Rent-Seeking with Asymmetric Valuations," Public Choice, Springer, vol. 98(3-4), pages 415-30, March.
- Lawrence M. Kahn, 2000. "The Sports Business as a Labor Market Laboratory," Journal of Economic Perspectives, American Economic Association, vol. 14(3), pages 75-94, Summer.
- Jennifer Brown, 2011. "Quitters Never Win: The (Adverse) Incentive Effects of Competing with Superstars," Journal of Political Economy, University of Chicago Press, vol. 119(5), pages 982 - 1013.
- Richard L. Fullerton & R. Preston McAfee, 1999. "Auctioning Entry into Tournaments," Journal of Political Economy, University of Chicago Press, vol. 107(3), pages 573-605, June.
- De Paola, Maria & Scoppa, Vincenzo, 2008. "The Effects of Managerial Turnover: Evidence from Coach Dismissals in Italian Soccer Teams," MPRA Paper 11030, University Library of Munich, Germany.
- Barry J. Nalebuff & Joseph E. Stiglitz, 1983. "Prices and Incentives: Towards a General Theory of Compensation and Competition," Bell Journal of Economics, The RAND Corporation, vol. 14(1), pages 21-43, Spring.
- Szymanski, Stefan & Valletti, Tommaso M., 2005. "Incentive effects of second prizes," European Journal of Political Economy, Elsevier, vol. 21(2), pages 467-481, June.
- de Dios Tena, Juan & Forrest, David, 2007. "Within-season dismissal of football coaches: Statistical analysis of causes and consequences," European Journal of Operational Research, Elsevier, vol. 181(1), pages 362-373, August.
- R. H. Koning, 2003. "An econometric evaluation of the effect of firing a coach on team performance," Applied Economics, Taylor & Francis Journals, vol. 35(5), pages 555-564.
When requesting a correction, please mention this item's handle: RePEc:iza:izadps:dp6884. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Mark Fallak)
If references are entirely missing, you can add them using this form.