- 08 Jan 2018
- Working Paper Summaries
Come Together: Firm Boundaries and Delegation
The study develops a simple model and provides new data to examine the relationship between vertical integration and delegation of decision-making, two critical aspects of a firm organizational design that are typically studied in isolation. The results show that delegation and vertical integration are positively correlated.
- 16 Oct 2017
- Working Paper Summaries
Healthy Business? Managerial Education and Management in Healthcare
A hospital's proximity to a university supplying both business and clinical education is associated with higher management practice scores and better clinical outcomes.
- 10 Oct 2017
- First Look
First Look at New Research and Ideas, October 10, 2017
Measuring sales the right way ... Does crime desensitize victims? ... Innovation in a 100-year-old medical devices giant .
- 17 May 2017
- Working Paper Summaries
Turbulence, Firm Decentralization and Growth in Bad Times
What makes some firms more resilient than others to large negative macro shocks? This paper finds that the internal organization of firms—specifically, the extent to which decision-making is decentralized from headquarters to plant managers—is an important mediating factor through which macroeconomic shocks affect firm performance and, ultimately, growth.
- 09 May 2017
- First Look
New Research and Ideas, May 9
How Do You Reorg Big Bird? ... Organized for a downturn ... Finding a new market for Fitbit.
- 28 Mar 2017
- Working Paper Summaries
CEO Behavior and Firm Performance
This paper combines a new survey methodology with a machine learning algorithm to measure the behavior of CEOs in large samples. Results show that larger and more complex firms require CEOs with a more coordinative—and less micromanaging—behavior. Inefficiencies in the way CEOs match with firms have important consequences for firm productivity.
- 21 Mar 2017
- First Look
First Look at New Research, March 21
The rise and fall of the circus ... Do CEOs impact firm performance? ... The hidden power of a job referrer.
- 27 Jun 2016
- Research & Ideas
These Management Practices, Like Certain Technologies, Boost Company Performance
Management practice acts exactly as a new technology might in giving companies competitive advantage—and there is a right way and a wrong way to do things, says a new study by Raffella Sadun and colleagues. Open for comment; Comment(s) posted.
- 17 Jun 2016
- Working Paper Summaries
Management as a Technology?
Economists, business people and many policymakers have long believed that management practices are an important element in productivity. This study provides firm-level measures of management in an internationally comparable way, drawing on original data on over 11,000 firms across 34 countries. Differences in management practices account for about 30 percent of cross-country productivity differences.
- 09 Dec 2014
- Working Paper Summaries
Does Management Matter in Schools?
There are major disparities in the quality of education within and across countries. School managerial practices may be one important reason for such differences, but research in this area has traditionally been held back by a lack of robust and comparable instruments to systematically measure management practices. In this paper the authors develop a novel and internationally comparable index of management quality for schools, and apply this methodology to measure management practices across 1,800 private and public schools across eight developed and developing economies. Three key findings emerged. First, the adoption of basic managerial practices varies significantly across and within countries. The United Kingdom, Sweden, Canada and the US obtain the highest average scores, followed by Germany, Italy and Brazil, while India has the lowest scores. Second, higher management scores are positively correlated with better pupil outcomes. Third, they show that that—similar to the private sector—different types of school governance are associated with systematically different levels of management adoption. Key concepts include: Management practices vary significantly across and within countries and are strongly linked to pupil outcomes. Among autonomous government schools, two key features account for a large fraction of the superior management performance of such schools: 1) having strong accountability of principals to an external governing body and 2) exercising strong leadership through a coherent long-term strategy for the school. Improving management could raise school standards and could give broad support for the fostering of greater autonomy of government schools. Autonomy by itself is unlikely to deliver better results. However, finding ways to improve governance and motivate principals could make sure that decentralized power leads to better standards. Closed for comment; 0 Comment(s) posted.
- 07 Jul 2014
- Research & Ideas
Banning Big-box Stores Can Hurt Local Retailers
Research by Raffaella Sadun shows how regulations meant to protect independent retailers from big-box stores may actually backfire. Closed for comment; 1 Comment(s) posted.
- 27 Jan 2014
- Research & Ideas
Family CEOs Spend Less Time at Work
CEOs who are related to the owners of family-owned firms work significantly fewer hours than nonfamily CEOs, according to a new study by Raffaella Sadun and colleagues. This is in light of the fact that longer working hours are associated with higher productivity, growth, and profitability. Closed for comment; 16 Comment(s) posted.
- 02 Jan 2014
- Working Paper Summaries
Managing the Family Firm: Evidence from CEOs at Work
According to prior research, firm performance is weaker among companies with CEOs who have a family connection to the firm owners compared with nonfamily CEOs, that is professionals. Given the ubiquity of family firms and the implications for aggregate income and growth, what explains this variation? This paper provides evidence on the causes, features, and correlates of CEO attention allocation by looking at a simple yet critical difference between family and professional CEOs: the time they spend working for their firms. The Indian manufacturing sector makes an excellent case study because family ownership is widespread and the productivity dispersion across firms is substantial. Examining the time allocation of 356 CEOs of listed firms in this sector, the authors make several findings. First, there is substantial variation in the number of hours CEOs devote to work activities. Longer working hours are associated with higher firm productivity, growth, profitability, and CEO pay. Second, family CEOs record 8 percent fewer working hours relative to professional CEOs. The difference in hours worked is more pronounced in low-competition environments and does not seem to be explained by measurement error. Third, estimates with respect to the cost of effort, due to weather shocks and popular sport events, suggest that family CEOs place a higher relative weight on leisure, which could be due to either a wealth effect or job security. Overall, the evidence highlights the importance of how corporate leaders allocate their managerial attention. Key concepts include: Family CEOs work 8 percent fewer hours that nonfamily CEOs (i.e., professionals). The difference in hours worked translates in a 5.8 percent productivity gap between family and professional CEOs. Family CEOs are more responsive to events that increase the cost of providing effort, such as monsoon rains and cricket matches. Behavioral differences may help account for the performance differential between family and nonfamily firms. Closed for comment; 0 Comment(s) posted.
- 30 Jan 2012
- Research & Ideas
Measuring the Efficacy of the World’s Managers
Over the past seven years, Harvard Business School's Raffaella Sadun and a team of researchers have interviewed managers at some 10,000 organizations in 20 countries. The goal: to determine how and why management practices differ vastly in style and quality not only across nations, but also across various organizations and industries. Closed for comment; 19 Comment(s) posted.
- 23 Nov 2011
- Working Paper Summaries
The Organization of Firms Across Countries
Economists have been paying increasing attention to the role that culture plays in a firm's overall performance. This paper focuses on how trust—a key cultural factor—affects firms' decision-making process, size, and productivity. Research was conducted by Nicholas Bloom of Stanford University, Rafaella Sadun of the Harvard Business School, and John Van Reenen of the London School of Economics. Key concepts include: If a firm is headquartered in a country where trust is prevalent (such as Sweden), it is much more likely to decentralize its decision making than if it is headquartered in a country in which trust is rarer (such as India). In short, higher trust leads to more decentralization. Trust also enables a firm to hire a large number of plant managers, because the CEO will feel comfortable delegating decisions to their direct reports without spending too much time on supervision. Thus, higher trust increases firm size. Higher trust increases the marginal value of information technology's effect on productivity. Closed for comment; 0 Comment(s) posted.
- 17 Nov 2011
- Sharpening Your Skills
Sharpening Your Skills: Organizational Design
In this collection from our archives, Harvard Business School faculty discuss specific challenges that can be solved with the right organizational design. Closed for comment; 0 Comment(s) posted.
- 25 Apr 2011
- Research & Ideas
What CEOs Do, and How They Can Do it Better
A CEO's schedule is especially important to a firm's financial success, which raises a few questions: What do they do all day? Can they be more efficient time managers? HBS professor Raffaella Sadun and colleagues set out to find some answers. Closed for comment; 67 Comment(s) posted.
- 04 Apr 2011
- Research & Ideas
Attention Medical Shoppers: What Health Care Can Learn from Walmart and Amazon
At a Harvard Business School panel discussion on health care management, experts looked to the retail industry as a possible model for delivering medical services more effectively. Open for comment; 7 Comment(s) posted.
- 31 Mar 2011
- Working Paper Summaries
What Do CEOs Do?
If time is money, as the old adage goes, then a CEO's schedule is especially important to a firm's financial success. This raises a fair question: What do CEOs do all day? To that end, researchers followed the activities of 94 CEOs in Italy over the course of a pre-specified week, enlisting the CEOs' personal assistants to track their bosses' activities with time-use diaries. Research was conducted by Raffaella Sadun of Harvard Business School, Luigi Guiso of the European University Institute, and Oriana Bandiera and Andrea Prat of the London School of Economics. Key concepts include: Compared with CEOs who work shorter hours overall, CEOs with longer workdays tend to devote more time meeting with other employees within the company and less time meeting with outsiders. The better the firm's governance structure, the more likely it is that a CEO will spend more time meeting with insiders than outsiders. The findings show a strong correlation between hours worked and productivity—a 2.14 percentage point increase in productivity for every one percentage point increase in hours worked. That positive correlation is driven entirely by the time a CEO spends with company insiders. Time spent with insiders is correlated with profits; time spent with outsiders is not. A possible interpretation is that spending time with outsiders might be more beneficial to the CEO than to the firm. Closed for comment; 0 Comment(s) posted.
The Impact of CEOs in the Public Sector: Evidence from the English NHS
To what extent do CEOs impact their organizations? This study finds little consistent evidence of any CEO effect on the large set of production metrics examined in hospitals averaging 4,500 employees in the English National Health Service. This result stands in stark contrast with earlier findings of a CEO effect in the private sector and smaller public sector organizations.