The Impact of Leadership Changes on Expectations of Organizational Performance

Abstract

Previous research has examined the effect of changes in upper management positions on actual organizational performance; however, the influence of leadership changes on performance expectations has been largely neglected. This gap in the literature is surprising given that failure to meet expectations leads to dismissal. The purpose of the present research is to analyze how coaching changes affect expectations of a sports team’s performance. Betting lines are used as performance expectations because they are unbiased forecasts of game outcomes. This study uses data from 13 seasons of the German Football Bundesliga. Significant positive timelagged effects on performance expectations are evident when examining underlying expected performance. These positive effects are evident 8 weeks after the leadership change, indicating that new leaders are expected to need some time before significant performance improvements are expected to occur.

How do Bookmakers Interpret Running Performance of Teams in Previous Games? Evidence From the Football Bundesliga

“…Consistent with prior research on expected game outcomes in the Bundesliga (e.g. Soebbing et al, 2015; von Hanau et al, 2015), we anticipate PointsDiff to have a positive and significant effect on the win probability and the RankDiff to have a negative impact.…”

“…The first variable looks at mid-season coaching changes and measures the difference in coaching changes between the two clubs ( CoachChangeDiff ). Previous research by Soebbing et al (2015) found a change in coach did affect the expected outcome of a Bundesliga match as expressed by win probability. However, this change did not come until four games into a new coach’s tenure.…”

“…Home field advantage in the German Bundesliga is well documented throughout the literature studying expected team performance (e.g. Soebbing et al, 2015; von Hanau et al, 2015). The second variable measures whether the observed game is a derby game ( Derby ).…”

“…Such fractional response models were used in previous research in sports economics (e.g. Hausman & Leonard, 1997; Soebbing et al, 2015). A maximum of 100 iterations are employed.…”

Effort reduction of employer‐to‐employer changers: Empirical evidence from football

“…As the team's outcome always depends on the opponent, we also control for the strength of the opponent (Leard & Doyle, ; Weimar & Wicker, ). Using ex ante winning probabilities in terms of standardized betting odds from “interwetten.com” is one common procedure to incorporate uncertainty and difference in team quality (eg, Peel & Thomas, ; Soebbing, Wicker, & Weimar, ) . Moreover, season, weekday, and hour times were generated to catch further unobserved heterogeneity within a player's effort investment.…”