Advanced Search
MyIDEAS: Login

Leadership Style and Incentives

Contents:

Author Info

  • Julio J. Rotemberg

    (Sloan School of Management, Massachusetts Institute of Technology, 50 Memorial Drive, E52-432, Cambridge, Massachusetts 02139)

  • Garth Saloner

    (Graduate School of Business, Stanford University, Stanford, California 94305)

Abstract

We study the relationship between a firm's environment and its optimal leadership style. We use a model in which contracts between the firm and managers are incomplete so that providing incentives to subordinates is not straightforward. Leadership style, whether based on organizational culture or on the personality of the leader, then affects the incentive contracts that can be offered to subordinates. We show that leaders who empathize with their employees adopt a participatory style and that shareholders gain from appointing such leaders when the firm has the potential for exploiting numerous innovative ideas. By contrast, when the environment is poor in new ideas, shareholders benefit from hiring a more selfish (i.e., more profit maximizing) leader whose style is more autocratic.

Download Info

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
File URL: http://dx.doi.org/10.1287/mnsc.39.11.1299
Download Restriction: no

Bibliographic Info

Article provided by INFORMS in its journal Management Science.

Volume (Year): 39 (1993)
Issue (Month): 11 (November)
Pages: 1299-1318

as in new window
Handle: RePEc:inm:ormnsc:v:39:y:1993:i:11:p:1299-1318

Contact details of provider:
Postal: 7240 Parkway Drive, Suite 300, Hanover, MD 21076 USA
Phone: +1-443-757-3500
Fax: 443-757-3515
Email:
Web page: http://www.informs.org/
More information through EDIRC

Related research

Keywords: leadership style; employee participation; incomplete contracts; incentives for innovation;

References

No references listed on IDEAS
You can help add them by filling out this form.

Citations

Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
as in new window

Cited by:
This item has more than 25 citations. To prevent cluttering this page, these citations are listed on a separate page.

Lists

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

Statistics

Access and download statistics

Corrections

When requesting a correction, please mention this item's handle: RePEc:inm:ormnsc:v:39:y:1993:i:11:p:1299-1318. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Mirko Janc).

If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through the various RePEc services.