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Legitimacy, communication and leadership in the turnaround game


Brandts, Jordi; Cooper, David J; Weber, R (2015). Legitimacy, communication and leadership in the turnaround game. Management Science, 61(11):2627-2645.

Abstract

We study the effectiveness of leaders for inducing coordinated organizational change to a more efficient equilibrium, i.e., a turnaround. We compare communication from leaders to incentive increases and also compare the effectiveness of randomly selected and elected leaders. While all interventions yield shifts to more efficient equilibria, communication from leaders has a greater effect than incentives. Moreover, leaders who are elected by followers are significantly better at improving their group’s outcome than randomly selected ones. The improved effectiveness of elected leaders results from sending more performance-relevant messages. Our results are evidence that the way in which leaders are selected affects their legitimacy and the degree to which they influence followers. Finally, we observed that a combination of factors— incentive increases and elected leaders—yield near universal turnarounds to full efficiency.

Abstract

We study the effectiveness of leaders for inducing coordinated organizational change to a more efficient equilibrium, i.e., a turnaround. We compare communication from leaders to incentive increases and also compare the effectiveness of randomly selected and elected leaders. While all interventions yield shifts to more efficient equilibria, communication from leaders has a greater effect than incentives. Moreover, leaders who are elected by followers are significantly better at improving their group’s outcome than randomly selected ones. The improved effectiveness of elected leaders results from sending more performance-relevant messages. Our results are evidence that the way in which leaders are selected affects their legitimacy and the degree to which they influence followers. Finally, we observed that a combination of factors— incentive increases and elected leaders—yield near universal turnarounds to full efficiency.

Citations

1 citation in Web of Science®
2 citations in Scopus®
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Additional indexing

Item Type:Journal Article, refereed, original work
Communities & Collections:03 Faculty of Economics > Department of Economics
Dewey Decimal Classification:330 Economics
Uncontrolled Keywords:Leadership, job selection, coordination failure, experiments, communication
Language:English
Date:2015
Deposited On:19 Jan 2015 09:21
Last Modified:27 May 2016 13:49
Publisher:Institute for Operations Research and the Management Science
ISSN:0025-1909
Publisher DOI:https://doi.org/10.1287/mnsc.2014.2021

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