Managing Firms in an Emerging Economy: Evidence From The Time Use of Indian CEOS

Published By: | Published Date: July, 05 , 2013

The success or failure of a company is often ascribed to the behavior of its CEO. Yet little is known about what top managers actually do, whether this matters for firm performance, and why it differs across firms. We provide some answers by developing a new survey instrument to collect data on CEO time use in the Indian manufacturing sector, where the productivity dispersion across firms is substantial. Time use analysis of 356 CEOs of listed firms yields three sets of findings. First, there is substantial heterogeneity both in the recorded number of hours that CEOs spend in business activities and the allocation of time across different activities, constituencies, and modes of interaction (“managerial style”). Second, both hours and style are strongly correlated with firm productivity, CEO remuneration and firm profitability. Third, controlling for state and industry traits, family CEOs record less hours and! adopt a less productive. style. Using differences in exposure to competition, weather shocks and sport events, we argue that the observed behavior of family CEOs is difficult to explain solely as an optimal response to different business environments or organizational structures, while it is consistent with systematic differences in the skills or preferences of CEOs.

Author(s): Oriana Bandiera, Andrea Prat, Raffaella Sadun | Posted on: Dec 18, 2015 | Views()

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