Lecture 2: What do Managers Do?ccfour/EO2.pdfLecture 2: What do Managers Do? Cheng Chen School of Economics and Finance The University of Hong Kong (Cheng Chen (HKU)) Econ 6006 1

Lecture 2: What do Managers Do?

Cheng Chen

School of Economics and Finance

The University of Hong Kong

(Cheng Chen (HKU)) Econ 6006 1 / 15

Introduction

Reference

We discuss the following paper intensively: �What Do CEOs Do?� by

Bandiera, Guiso, Prat and Sadun (HBS working paper 11-081)

Background reading:I Drucker, Peter F. (1966): �The E�ective Executive,� New York: Harper

and Row.I Mintzberg, Henry. (1973): �The Nature of Managerial Work,� New

York: Harper and Row.


Introduction

Reference

We discuss the following paper intensively: �What Do CEOs Do?� by

Bandiera, Guiso, Prat and Sadun (HBS working paper 11-081)

Background reading:I Drucker, Peter F. (1966): �The E�ective Executive,� New York: Harper

and Row.I Mintzberg, Henry. (1973): �The Nature of Managerial Work,� New

York: Harper and Row.


Introduction

Approach

E�ective management: E�ective executives know that time is the

limiting factor. The output of any process is set by the scarcest

resource (Drucker 1966).

True for other professions as well.

What does this paper do?I Develop a time-use diary for CEOs and use it to record the time

allocation of a sample of 94 CEOs belonging to leading Italiancompanies in various industries over a pre-selected work week.

I A very common approach used in research of management (survey).

Two types of activities:I Work with insiders: working alone, meetings with subordinates.I Work with outsiders: public events and business lunches.


Introduction

Approach










Introduction

Approach










Introduction

Findings

42% time with insiders only. 25% time with both insiders and

outsiders. 16% time with outsiders. Little time with outsiders only.

Working with insiders: bene�ting �rm most; working with outsiders:

private bene�t.

Key �ndings:I CEOs who work longer hours, devote more time to activities that

mostly bene�t the �rm and less time to activities that mostly yieldprivate bene�ts.

I CEOs who work for �rms with stronger governance devote more timeto activities that mostly bene�t the �rm and less time to activities thatmostly yield private bene�ts.

I Time devoted to activities that mostly bene�t the �rm is more stronglycorrelated with productivity than time devoted to activities that mostlyyield private bene�ts.


Introduction

Findings

42% time with insiders only. 25% time with both insiders and

outsiders. 16% time with outsiders. Little time with outsiders only.

Working with insiders: bene�ting �rm most; working with outsiders:

private bene�t.

Key �ndings:I CEOs who work longer hours, devote more time to activities that

mostly bene�t the �rm and less time to activities that mostly yieldprivate bene�ts.

I CEOs who work for �rms with stronger governance devote more timeto activities that mostly bene�t the �rm and less time to activities thatmostly yield private bene�ts.

I Time devoted to activities that mostly bene�t the �rm is more stronglycorrelated with productivity than time devoted to activities that mostlyyield private bene�ts.


Evidence

Data Description

Outsourced to a private �rm in Milan.

Use CEO's personal assistant (PA) to record data.

PAs are randomly assigned to one of �ve weeks in the sampling period

(cross-sectional).

Any activity longer than 15 minutes are recorded.

Response rate is 18% (selection issue).


Evidence

Data Description




(cross-sectional).




Evidence

Data Description




(cross-sectional).




Evidence

Time Use


Evidence

Time Spent


Evidence

Categories of Time Spent


Evidence

Distribution of Time Use


Evidence

Distribution of Time Use with Insiders and Outsiders


Evidence

Working Hard and Working with Insiders


Evidence

Working Hard and Working with Insiders (Cont.)


Evidence

Time Use and Firm Governance


Evidence

Time Use and Firm Performance


Evidence

Time Spent with Insiders and Firm Performance


Documents

Lecture 2: What do Managers Do?ccfour/EO2.pdfLecture 2: What do Managers Do? Cheng Chen School of Economics and Finance The University of Hong Kong (Cheng Chen (HKU)) Econ 6006 1