Kathryn Shaw (Stanford University); Ann Bartel (Columbia University); James Jedras (Stanford University)
Abstract
When we “get under the hood” of different divisions within a very large bank and discern what managers do on the job and how they are paid, we see strong evidence that a manager’s “purpose” is very different across divisions with different strategies. This alone would not be a shocking point. We show how they matter across the three divisions: as managers execute the strategies of the firm, they either empower their stars, monitor their guardians, or supervise their foot soldiers. Furthermore, our estimated manager fixed effects show that managers matter, and by about the same amount, in the two divisions of PCB and Risk, even though managerial tasks are very different. For WM, their managers matter much less, which is a very important point regarding the “purpose” of managers. And lastly, given very little data on the productivity of white collar workers, and because few firms would claim to measure it, we have shown rich and up-to-date features of how manager jobs are designed.