When does managerial experience matter? Evidence from Major League Baseball

ABSTRACT

In the world of professional sports, a manager’s ability to influence team success is often questioned. This study exploits a unique feature of Major League Baseball (MLB), which has different rules of play depending on what league a team is in, to examine whether managerial impact is driven by the level of responsibility they are given over in-game decision making. Using 47 seasons of MLB data, we find evidence that the development of human capital in the form of on-the-job experience and exposure to prior success is only beneficial when managers are employed in more complex decision-making environments. The results of this study have ramifications on the hiring decisions, both in terms of personnel choice and remuneration, of professional sports organizations.

KEYWORDS:

• Managerial impact
• organizational performance
• sport

JEL CLASSIFICATION:

• J24
• M51
• Z22

Acknowledgments

The author is grateful for insightful comments from an anonymous referee. The usual disclaimer applies.

Disclosure statement

No potential conflict of interest was reported by the author(s).

Notes

¹ https://fivethirtyeight.com/features/most-managers-are-headed-to-the-hall-of-mediocrity.

² https://www.forbes.com/sites/barrymbloom/2018/06/21/in-favour-of-the-universal-designated-hitter-in-major-league-baseball.

³ https://www.cbssports.com/mlb/news/will-mlb-have-universal-dh-in-2021-league-is-currently-not-planning-on-it-per-report.

⁴ We exclude observations from teams that change their manager during a season. Incorporating interim managers appointed temporarily for only parts of a season may bias results. Such managers typically have little say in a team’s ongoing operations as they are usually appointed to provide cover until a permanent replacement is found.

⁵ Team performance data was sourced from Lahman’s Baseball Archive (http://baseball1.com). Remaining data was sourced from Baseball Reference (http://www.baseball-reference.com).

⁶ For example, the Los Angeles Dodgers won the 2018 NL West title by virtue of a one-game lead over the Colorado Rockies.

⁷ Between 1973 and 1994, four teams per season made it to the postseason. From 1995 to 2011, this number increased to eight teams per season. From 2012 onwards, 10 teams per season were awarded a spot in the postseason. To incorporate all seasons into our logit analysis, we define the first level of postseason success as being one of the final four teams in the postseason (i.e. reaching the League Championship Series).