Does experience help or hinder top managers? Working with different types of resources in Hollywood

2016

MICHAEL J MANNOR JAMAL SHAMSIE DONALD E. CONLON

Research summary: Research on the resource-based view has begun to place more emphasis on the ability of managers to extract better performance from the resources that are available to them. In this paper, we show that prior experience can both help and hinder their ability to generate performance from various categories of resources. Further, we argue that the fungibility of each resource influences the opportunities managers have to use their experiences in order to find the best method to deploy them. We test our hypotheses by examining the ability of Hollywood film producers to generate results from financial, brand, and human resources. Our findings show that experienced producers can generate better performance from more fungible resources, but they actually achieve weaker results with less fungible resources. Managerial summary: Do more experienced top managers get better results from their resources? We examine this question for Hollywood film producers. Our results show that experience can really help when producers work with resources such as cash (budgets) and brand resources (such as film sequels). However, such experiences actually reduce performance when they work with some human resources, such as highly talented directors. We argue that experience can be most helpful when managers work with more fungible resources, which can be used in a variety of different ways but can actually hurt when they work with resources that are more constrained in how they can be deployed. Under ideal circumstances, we find that experienced producers can generate nearly 40 percent more revenue with the right mix of resources. Copyright © 2015 John Wiley & Sons, Ltd.

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