Gold and Executive Management Success: A Case of Mistaken Inferred Causality
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Gold and Executive Management Success: A Case of Mistaken Inferred Causality

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Gold and Executive Management Success: A Case of Mistaken Inferred Causality

Gold and Executive Management Success: A Case of Mistaken Inferred Causality

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Gold and Executive Management Success: A Case of Mistaken Inferred Causality Gold and Executive Management Success: A Case of Mistaken Inferred Causality Document Transcript

  • Golf and Executive 1Golf and Executive Management Success: A Case of Mistaken Inferred Causality by Edgardo Donovan RES 600 – Dr. Yufeng Tu Module 3 – Case Analysis Monday, November 17, 2008 RES600 - Introductory Data Analysis
  • Golf and Executive 2 Golf and Executive Management Success: A Case of Mistaken Inferred Causality After scientifically sifting out a handful of chiefs because of their statistical extremes, the 11 executives whose companies delivered the best stock market performance over three years also had the best average handicap index: 12.4. The bottom 11 executives in the sample, whose companies turned in a subpar market performance, with an average handicap index of 17.2. The correlations among these data are hardly a statistical fluke. Mr. Crystal, who performed the complex and probably unprecedented calculations, said the probability that the findings were due to chance alone is less than 1 percent. ADAM BRYANT The New York Times, 1998 he 1998 article titled “Duffers Need Not Apply” published by Bryant Adams in “The New York Times” unsuccessfully tries to prove that there is a positive causal correlative relationship between golfing and executive management ability. From an impacton the practice of management perspective, the article has little value but has successfullygarnered a lot of attention due to its thematic positioning between two consistentlypopular themes among a sizeable demographic of the “New York Times” executivereadership: business success and winning on the golf course. Bryant attempts to correlatetwo unrelated indicators while inferring a causal attribute between them. Perhaps Bryant’sthesis would have more credibility if he were to provide a deeper theoretical reasoningbacked up by extensive qualifier-laden statistics that would explain the importance of
  • Golf and Executive 3golfing ability in executive affairs. As it stands, “Duffers Need Not Apply” is merely alaudatory variety article about golfing as a social and cultural phenomenon amongAmerican executives. As a theoretical basis for his thesis Bryant offers a variety of suppositions. Perhapstime on the golf course offers an opportunity to think big, strategic thoughts. Perhapsnatural leaders also tend to be natural athletes. Maybe perseverance and the ability tofocus which are useful qualities in any endeavor pay particularly large dividends in bigbusiness and golf. Perhaps caddying as a youngster offers future chief executives the dualadvantage of building golf skills and immersing their sponge-like minds in business banterbetween strokes (Bryant, 1998). With the exception of caddying, these aforementionedsuppositions can be made of any sport. Bryant offers no theoretical reasoning or statisticaldata to prove otherwise. Bryant randomly chose circa three dozen executives as material for his study. Theonly conventional statistical procedure he adopted was sitting out extremes in an attemptto increase the validity of the analysis. We do not know how randomly these samples werecollected. For any study to have minimal credibility hundreds if not thousands of exampleswould be required from many different industries, business sizes, geographical areas, andlastly from many different countries if the study were intended to prove a universalphenomenon rather than just a national occurrence. One of the problems in trying to prove a universal causal correlation between abilityin a sport and executive acumen is that in order to make any assertion you need to skillfully
  • Golf and Executive 4take into consideration over half a century of research involving executive performance. Inthe 1950s people started quantifying the value of management by focusing on operationalresults such as sales and profitability. Executive performance analysis focus changed overthe decades and eventually by the late 1990s the value of a company’s stock price becamearguably the most important indicator of executive success (Fox, 2006). Short-term stock price or earnings growth do not take into consideration the long-term intangibles of creating a success oriented corporate culture over many years. Balancescorecards attempt to do that. Balance scorecards have been used in the last twenty yearsto track indicators beyond earnings and stock price ranging from customer loyalty toemployee morale so as to award executives accordingly. It is difficult to say which amongstock price, earnings, or balance scorecards should be the prevaricating indicator ofexecutive competence. Ultimately, a CEO is responsible for all three. Academic research regarding executive performance has centered on LeadershipStudies, Organizational Behavior, and Performance Dynamics. The aforementioneddisciplines have tried in vain to provide a simple answer to a simple question: what makesa CEO great? Does improving core business, picking successors, or leading a team forwardmake a CEO great? Apparently, there is no universal recipe for success (Fox, 2006). Bryant’s research model is flawed because he tries to hypothesize a causal positivecorrelation between two independent variables. With independent variables a negative orpositive correlation can easily be interpreted incorrectly and casualty could be mistakenlyassociated. Correlations should only be between dependent and independent variables. An
  • Golf and Executive 5attempt to infer causality by correlating independent variables will corrupt research modelvalidity thereby destroying its predictive power. In order to reduce the chance ofincorrectly discerning causality from independent coincidental variables, it is necessary fora researcher to be their own best devils advocate if they are to prove any sort of casualthesis. They should strive to examine potential weaknesses in their theory and investigatethem fully rather than be comforted by potentially misleading statistical correlations. Byconsidering a greater range of qualifying related variable they may restrict the scope of thephenomena they are trying to prove in exchange for a stronger piece of research. Bryant would have fared much better if he had limited the scope of his research toexplain something less ambitious without universal ramifications. For example, he couldhave structured his study around understanding the psychological dynamics that propel somany executives to devote themselves to the game of golf as a social hobby. He could havegathered statistical information by having a large randomized sample of executives answera lengthy questionnaire rather than just affirming that executives do not talk about theirgolf games (Bryant, 1998). Having an outline for your dissertation can be extremely helpful in creating aparallel questionnaire that collects data operationalizing variables previously onlyreferenced theoretically. It is important to structure research questionnaires according tothe hypothesis construct so that data can be easily used to show a positive or negativecorrelation with the hypothesis (Walonick, 2004). However, sometimes this may backfirewhen the results from a survey or a convenience sample are not easily categorized into an
  • Golf and Executive 6overly structured preconceived construct. This may have the potential to invalidate thesurvey or convenience sample thereby seriously threatening the integrity of the overallresearch. Unlike Bryant’s work on “Duffers Need Not Apply”, undertaking a serious researchproject to try to garner a statistical basis for the thesis may require a lot of time and money.Time and money have an impact on a persons ability to collect an extensive conveniencesample. Sometimes this must be done on site and may involve expensive traveling. Evenwhen money is not involved time can be a factor. There may be a myriad of different in-depth surveys and questionnaires that one could aspire conducting when in the end onemust choose the most expedient route in proving the existence of a positive correlation orlack thereof between a set of data and a hypothesis. This clearly was not done by Bryantwho expediently proclaimed on behalf of all the world’s executive golfers that they do nottalk about their golf games (Bryant, 1998). The 1998 article titled “Duffers Need Not Apply” published by Bryant Adams in “TheNew York Times” unsuccessfully tries to prove that there is a positive causal correlativerelationship between golfing and executive management ability. From an impact on thepractice of management perspective, the article has little value but has successfullygarnered a lot of attention due to its thematic positioning between two consistentlypopular themes among a sizeable demographic of the “New York Times” executivereadership: business success and winning on the golf course. Bryant attempts to correlatetwo unrelated indicators while inferring a causal attribute between them. Perhaps Bryant’s
  • Golf and Executive 7thesis would have more credibility if he were to provide a deeper theoretical reasoningbacked up by extensive qualifier-laden statistics that would explain the importance ofgolfing ability in executive affairs. As it stands, “Duffers Need Not Apply” is merely alaudatory variety article about golfing as a social and cultural phenomenon amongAmerican executives.
  • Golf and Executive 8 BibliographyBryant, Adam. (1998). Duffers need not apply. The New York Times. Section 3; Page1; Column 1.Fox, Justin. (2006). Are todays CEOs batting a thousand? Fortune Magazine online,October 20 2006: 10:01 AMWalonick, David. (2004). Designing and using questionnaires. Survival Statistics.