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Title:The impact of managerial change on performance: The role of team heterogeneity PDF Logo
Authors:Hentschel, Sandra
Mühlheusser, Gerd
Sliwka, Dirk
Issue Date:2012
Series/Report no.:CESifo Working Paper: Labour Markets 3950
Abstract: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.
Subjects:managerial succession
teams
heterogeneity
tournaments
JEL:D22
J44
J63
Document Type:Working Paper
Appears in Collections:CESifo Working Papers, CESifo Group Munich

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