Paper #1157

Title:

Behavioral assumptions and management ability

Authors:

Benito Arruñada and Xosé H. Vázquez

Date:

June 2009 (Revised: April 2010)

Abstract:

The paper explores the consequences that relying on different behavioral assumptions in training managers may have on their future performance. We argue that training with an emphasis on the standard assumptions used in economics (rationality and self-interest) is good for technical posts but may also lead future managers to rely excessively on rational and explicit safeguarding, crowding out instinctive relational heuristics and signaling a “bad” human type to potential partners. In contrast, human assumptions used in management theories, because of their diverse, implicit and even contradictory nature, do not conflict with the innate set of cooperative tools and may provide a good training ground for such tools. We present tentative confirmatory evidence by examining how the weight given to behavioral assumptions in the core courses of the top 100 business schools influences the average salaries of their MBA graduates. Controlling for the self-selected average quality of their students and some other schools’ characteristics, average salaries are seen to be significantly greater for schools whose core MBA courses contain a higher proportion of management courses as opposed to courses based on economics or technical disciplines.

Keywords:

Evolutionary psychology, economics, management, relational heuristics, rationality, self-interest.

JEL codes:

A23, B41, D01, D87, M12, M51.

Area of Research:

Management and Organization Studies / Business Economics and Industrial Organization

Published in:

Management and Organization Review, Vol. 9(2), 209-232, 2013
With the title:
"The Impact of Behavioral Assumptions on Management Ability: A Test Based on the Earnings of MBA Graduates"

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