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Italian managers: fidelity or performance

By Oriana Bandiera, Luigi Guiso, Andrea Prat and Raffaella Sadun

Abstract

Is there a link between Italy’s disappointing productivity growth and the way Italian firms select and develop managerial talent? We collect extensive information on the characteristics of Italian managers and of the firms that employ them. In particular, we analyze the incentive structure that managers face, their career profile, and their use of time. Our data indicate that a fraction of firms – especially non‐family firms and multinationals – adopt a performance model, whereby managers are hired through formal channels (business contacts, head‐hunters, ads), they are assessed regularly and rewarded, promoted and dismissed on the basis on the assessment results. Other firms – especially family firms and firms that operate on the national market only – instead adopt a fidelity model of managerial talent development: they hire managers on the basis of personal or family contacts, they do not assess their performance formally, and they reward them based on the quality of their relationship with the firm’s owners

Topics: HD Industries. Land use. Labor
Year: 2008
OAI identifier: oai:eprints.lse.ac.uk:35521
Provided by: LSE Research Online

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