Template-Type:ReDIF-Paper 1.0
Title: Do New Brooms Sweep Clean? - Why and when Dismissing Managers Increases a Firm's Performance
Author-Name: Hvffler, Felix 
Author-Name: Dirk Sliwka
Author-Postal: Dirk Sliwka
	Wirtschaftspolitische Abteilung
	University of Bonn
	Adenauerallee 24-26
	53113 Bonn
Author-Phone: 0211 789914
Author-Homepage: 
Classification-JEL: D23, L20
Keywords: Job Rotation, Dismissal, Incentives, Rat Race
Abstract: If a manager stays in office for a long time he will have learned much about his subordinates. Thus competition among them will be weakened as the manager has made up his mind who is suited best for which position. With a new manager the ``rat race'' for favorable tasks is restarted leading subordinates to exert higher effort. But for the firm-owner the trade-off arises that with a new manager effort will be larger but the quality of task allocation will be worse since information is lost. The dismissal decision will be nonmonotonic in her estimation of the heterogeneity in subordinates' abilities.
Creation-Date: 1999-07
Revision-Date: 
Handle: RePEc:bon:bonsfa:603