Do managers add value?

The usefulness of managers

Interesting article from the Economist over the value that managers can bring into organizations, based on a study performed by Stephan Billinger and Stephen Rosenbaum*.

Based on the study:

• Managers bring value into an organization, as they promoted the collaboration within a group / achieved better results than a randomized control groups without managers;
• Manager incentives matter both for managers and for workers:
• Workers become suspicious of managers when incentives are included;
• Managers react positively to incentives, however incentives might exacerbate the agency problem and promote short-term behaviors (with the company and with its associates).

My conclusions:

• Managers within a proper framework add value to any organization;
• The incentives/rewards drive culture and behaviors, thus quintessential to a company success.

*Discretionary mechanisms and co-operation in hierarchies: An experimental study, Journal of Economic Psychology 74

Study on the reading list