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Measuring Entrepreneurial BusinessesCurrent Knowledge and Challenges$
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John Haltiwanger, Erik Hurst, Javier Miranda, and Antoinette Schoar

Print publication date: 2017

Print ISBN-13: 9780226454078

Published to Chicago Scholarship Online: May 2018

DOI: 10.7208/chicago/9780226454108.001.0001

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PRINTED FROM CHICAGO SCHOLARSHIP ONLINE (www.chicago.universitypressscholarship.com). (c) Copyright University of Chicago Press, 2019. All Rights Reserved. An individual user may print out a PDF of a single chapter of a monograph in CHSO for personal use.date: 20 October 2019

Are Founder CEOs Good Managers?

Are Founder CEOs Good Managers?

Chapter:
(p.153) 4 Are Founder CEOs Good Managers?
Source:
Measuring Entrepreneurial Businesses
Author(s):

Victor Manuel Bennett

Megan Lawrence

Raffaella Sadun

Publisher:
University of Chicago Press
DOI:10.7208/chicago/9780226454108.003.0005

We investigate the management practices adopted by firms where the founders are also the CEOs using data from the World Management Survey. We find that founder CEO firms have the lowest management scores of any owner-manager pair type and that this difference is associated with significant performance differentials. We propose three possible reasons for the managerial gap of founder CEO firms: a) informational problems preventing a clear understanding of the weakness of their firms’ managerial practices; b) institutional factors dampening the incentive to adopt managerial practices; and c) non-pecuniary returns to potentially inefficient but power-preserving practices. The findings presented in the paper provide support for a) and c), while we do not find evidence that the management practices of founder CEO firms vary with respect to the characteristics of the institutional environments in which they are embedded.

Keywords:   productivity, management, founder CEOs

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