Kathryn Shaw: Do Managers Coach or Control? An Answer from the Star-Guardian Model
Kathryn Shaw comes from the Stanford Graduate School of Business
By combining a comprehensive personnel dataset with self-scraped job posting data from one of the “Big Five” Canadian banks, we theoretically propose and empirically find that employee job design and firm strategy are important in determining whether managers coach or control their workers. Inspired by Lazear (1998), we introduce a star-guardian model of job design, where stars are those jobs that chase upside gains and guardians are those that prevent downside losses. We extend this theory to show that job design and division strategy are closely related, with division strategy being established primarily from revenue and reputational considerations. We then theorize about differences in management between divisions based on strategy and job design differences across divisions. Summary tables and regressions with pay and managerial control support those theoretical predictions; Group Risk Management resembles guardian and has relatively stricter managerial control, while Wealth Management resembles star and has lower levels of managerial control. From there, we turn to job postings data and use machine learning to analyze explicitly stated desirable tasks for managers. The analysis reveals that managing guardians conveys greater levels of control, while managing stars suggests greater levels of coaching. Overall, our approach offers a nuanced view of what operational excellence means as it relates to internal firm dynamics. We also contribute to the view that machine learning is a viable tool in exploring personnel and managerial implications, as it can illuminate patterns from untraditional data sources.