Managerial Quality, Team Success, and Individual Player Performance in Major League Baseball

Abstract

This paper uses 1969–87 major league baseball data to investigate the impact of managerial quality on team winning and individual player performance. Managerial quality and player performance are measured as predicted pay based on salary regressions; these market-based measures permit conclusions about costs and benefits of managerial quality. There are two major findings. First, when player inputs are controlled for, higher-quality managers lead to higher winning percentages. Second, players tend to play better, relative to their prior performance levels, the higher the manager's quality. These findings suggest that, as emphasized by the human resource management literature, the quality of management makes an important difference in the performance of organizations.