The Impact of Managerial Change on Performance: The Role of Team Heterogeneity

Sandra Hentschel (), Gerd Muehlheusser () and Dirk Sliwka
Additional contact information
Sandra Hentschel: University of Bielefeld
Gerd Muehlheusser: University of Hamburg

No 6884, IZA Discussion Papers from Institute of Labor Economics (IZA)

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.

Keywords: managerial succession; teams; heterogeneity; tournaments (search for similar items in EconPapers)
JEL-codes: D22 J44 J63 (search for similar items in EconPapers)
Pages: 36 pages
Date: 2012-09
New Economics Papers: this item is included in nep-bec and nep-hrm
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (8)

Forthcoming - published in: Economic Inquiry 54(2), 1128-119, 2016

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Related works:
Journal Article: THE IMPACT OF MANAGERIAL CHANGE ON PERFORMANCE: THE ROLE OF TEAM HETEROGENEITY (2016)
Working Paper: The Impact of Managerial Change on Performance. The Role of Team Heterogeneity (2013)
Working Paper: The Impact of Managerial Change on Performance. The Role of Team Heterogeneity (2012)
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