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The impact of managerial quality on organizational performance: evidence from German soccer
Author(s) -
Frick Bernd,
Simmons Robert
Publication year - 2008
Publication title -
managerial and decision economics
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.288
H-Index - 51
eISSN - 1099-1468
pISSN - 0143-6570
DOI - 10.1002/mde.1431
Subject(s) - inefficiency , league , german , quality (philosophy) , revenue , stochastic frontier analysis , panel data , revenue sharing , marginal revenue , sports economics , marketing , set (abstract data type) , frontier , compensation (psychology) , business , industrial organization , economics , microeconomics , econometrics , accounting , computer science , psychology , political science , philosophy , psychoanalysis , law , history , archaeology , epistemology , physics , astronomy , production (economics) , programming language
In this paper we use a novel panel data set from the German premier soccer league (Bundesliga) as a case to show how variations in managerial compensation impact positively upon organizational (team) success. Using stochastic frontier analysis, we find that a team that hires a better quality coach can expect to achieve a higher league points total by reducing technical inefficiency. However, our results also suggest that the market for head coaches may be allocatively inefficient in that coaches are paid below their marginal revenue products. Copyright © 2008 John Wiley & Sons, Ltd.