The poor performance record of institutional investors in recent years has raised questions about their ability to adapt to a new investment environment. If institutions are to cope, management must take the responsibility for bringing about whatever changes are necessary.

In order to probe managers’ ability to meet this responsibility, the authors surveyed attitudes of 217 chief investment officers toward three aspects of their task: goals—the stated purpose of the organization; technology—the investment techniques used to achieve goals; and personal interrelations—the human element.

The survey revealed that:(1) Except for the chief investment officer’s own boss, no one outside the investment organization—including its clients—has more than nine per cent of the total influence on goals. (2) Managers apparently think of investment techniques in isolation, rather than as parts of an internally consistent investment process. 3) Whereas managers believe their subordinates are motivated by rewards with highly individualistic payoffs—high pay, career advancement, intellectual stimulation—they base rewards on the individual’s contribution to the organization.