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.
(Cheng Chen (HKU)) Econ 6006 2 / 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.
(Cheng Chen (HKU)) Econ 6006 2 / 15
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.
(Cheng Chen (HKU)) Econ 6006 3 / 15
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.
(Cheng Chen (HKU)) Econ 6006 3 / 15
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.
(Cheng Chen (HKU)) Econ 6006 3 / 15
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.
(Cheng Chen (HKU)) Econ 6006 4 / 15
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.
(Cheng Chen (HKU)) Econ 6006 4 / 15
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).
(Cheng Chen (HKU)) Econ 6006 5 / 15
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).
(Cheng Chen (HKU)) Econ 6006 5 / 15
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).
(Cheng Chen (HKU)) Econ 6006 5 / 15
Evidence
Time Use
(Cheng Chen (HKU)) Econ 6006 6 / 15
Evidence
Time Spent
(Cheng Chen (HKU)) Econ 6006 7 / 15
Evidence
Categories of Time Spent
(Cheng Chen (HKU)) Econ 6006 8 / 15
Evidence
Distribution of Time Use
(Cheng Chen (HKU)) Econ 6006 9 / 15
Evidence
Distribution of Time Use with Insiders and Outsiders
(Cheng Chen (HKU)) Econ 6006 10 / 15
Evidence
Working Hard and Working with Insiders
(Cheng Chen (HKU)) Econ 6006 11 / 15
Evidence
Working Hard and Working with Insiders (Cont.)
(Cheng Chen (HKU)) Econ 6006 12 / 15
Evidence
Time Use and Firm Governance
(Cheng Chen (HKU)) Econ 6006 13 / 15
Evidence
Time Use and Firm Performance
(Cheng Chen (HKU)) Econ 6006 14 / 15
Evidence
Time Spent with Insiders and Firm Performance
(Cheng Chen (HKU)) Econ 6006 15 / 15