What Do Good Managers Do and What Do They Leave Behind?

Abstract

Using administrative data from a large Colombian retailer and exploiting a manager rotation policy to estimate manager value-added, we study what good managers do and whether their impacts persist after they leave. Good managers increase sales by 12%, reducing stockouts while making inventory leaner, generating larger revenue gains from price changes without increasing the frequency of repricing, and shifting personnel attention toward back-office operations. When they depart, the staffing and inventory improvements persist, but pricing-related gains erode. These patterns reveal a fundamental distinction: some managerial contributions are embedded in organizational structure, while others depend on the manager's ongoing, context-specific judgment.