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THE IMPACT OF MANAGERIAL CHANGE ON PERFORMANCE: THE ROLE OF TEAM HETEROGENEITY
Author(s) -
Muehlheusser Gerd,
Schneemann Sandra,
Sliwka Dirk
Publication year - 2016
Publication title -
economic inquiry
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.823
H-Index - 72
eISSN - 1465-7295
pISSN - 0095-2583
DOI - 10.1111/ecin.12285
Subject(s) - tournament , homogeneous , incentive , task (project management) , competition (biology) , selection (genetic algorithm) , work (physics) , microeconomics , economics , business , marketing , computer science , management , artificial intelligence , thermodynamics , mechanical engineering , ecology , physics , mathematics , combinatorics , biology , engineering
When a key responsibility of a manager is to allocate more or less attractive tasks, subordinates have an incentive to work hard and demonstrate their talents. As a new manager is less well informed, management dismissals reinvigorate this tournament competition—but only in sufficiently homogeneous teams. We investigate this hypothesis using a large dataset on dismissals of soccer coaches, whose main task is indeed the selection of players. We find that dismissals enhance performance (only) in homogeneous teams. Moreover, we show that there is typically a negative selection bias when evaluating succession effects, which reconciles previous contradictory findings. ( JEL D22, J44, J63)