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Management Economics in a Large Retail Company

Author

Listed:
  • W. Stanley Siebert

    (Birmingham Business School, University of Birmingham, Birmingham B15 2TT, United Kingdom)

  • Nikolay Zubanov

    (University of Tilburg, 5000 LE Tilburg, The Netherlands)

Abstract
We use unique data from 245 stores of a UK retailer to study links among middle (store) manager skills, sales, and manager pay. We find that, of the six management practice areas surveyed, the most important is "commercial awareness," where abler managers achieve up to 13.9% higher sales per worker. We find that many stores have poor managers on this indicator. However, the company is careful to incentivize managers, operating a scheme giving shares (approximately 20%) in both positive and negative deviations of actual sales from expected. Abler managers do not receive higher pay, implying that their skills are company specific.

Suggested Citation

  • W. Stanley Siebert & Nikolay Zubanov, 2010. "Management Economics in a Large Retail Company," Management Science, INFORMS, vol. 56(8), pages 1398-1414, August.
    • Handle: RePEc:inm:ormnsc:v:56:y:2010:i:8:p:1398-1414
    DOI: 10.1287/mnsc.1100.1188
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    References listed on IDEAS

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    11. Thomas Triebs & Subal C. Kumbhakar, 2012. "Management Practice in Production," ifo Working Paper Series 129, ifo Institute - Leibniz Institute for Economic Research at the University of Munich.
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    17. Thomas L. P. R. Peeters & Steven Salaga & Matthew Juravich, 2020. "Matching and Winning? The Impact of Upper and Middle Managers on Firm Performance in Major League Baseball," Management Science, INFORMS, vol. 66(6), pages 2735-2751, June.

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