Essay

The Economic Rationale for Stable Manager-Team Relationships

Company A has a policy of rotating its project managers to new teams every 12-18 months to provide them with broad experience across the organization. In contrast, Company B prefers to keep its managers with the same teams for several years. Analyze the potential long-term productivity differences you would expect to see between the teams at Company A and Company B. In your analysis, explain the underlying mechanism that connects the duration of a manager's tenure with a specific team to the team's overall output.

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Updated 2025-08-07

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