Here's One More Thing to Blame on Senior Management

When I was studying for my doctorate in economics, a friend was studying for his in strategy. When I asked to explain the difference between the two fields, he said it boiled down to one thing -- economists assume that companies behave optimally, while strategists try to find ways they can do better. In some corners of the econ world, that difference is pretty stark -- models assume that all companies are identical profit-maximizing machines. Elsewhere, economists admit that some companies do better than others, but don’t think about why, or how to improve the laggards.

A few economists, however, take the problem of inefficient corporate management very seriously. With differences in company performance becoming more important for the economy, these researchers are stepping up their investigations into the value of good management.