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Leadership, Coordination and Mission-Driven Management

Author

Listed:
  • Patrick Bolton
  • Markus K. Brunnermeier
  • Laura Veldkamp

Abstract

What makes a good leader? A good leader is able to coordinate his followers around a credible mission statement, which communicates the future course of action of the organization. In practice, leaders learn about the best course of action for the organization over time. While learning helps improve the organization's goals it also creates a time-consistency problem. Leader resoluteness is a valuable attribute in such a setting, since it slows down the leader's learning and thus improves the credibility of the mission statement. But resolute leaders also inhibit communication with followers and leader resoluteness is costly when followers have sufficiently valuable signals.

Suggested Citation

  • Patrick Bolton & Markus K. Brunnermeier & Laura Veldkamp, 2008. "Leadership, Coordination and Mission-Driven Management," NBER Working Papers 14339, National Bureau of Economic Research, Inc.
  • Handle: RePEc:nbr:nberwo:14339
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    File URL: http://www.nber.org/papers/w14339.pdf
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    1. repec:cup:apsrev:v:102:y:2008:i:03:p:351-368_08 is not listed on IDEAS
    2. Sumon Majumdar & Sharun Mukand, 2007. "The Leader as Catalyst: On Leadership and the Mechanics of Institutional Change," Working Papers 1128, Queen's University, Department of Economics.
    3. Dewan, Torun & Myatt, David P., 2008. "The Qualities of Leadership: Direction, Communication, and Obfuscation," American Political Science Review, Cambridge University Press, vol. 102(03), pages 351-368, August.
    4. Daniel Ferreira & Marcelo Rezende, 2007. "Corporate strategy and information disclosure," RAND Journal of Economics, RAND Corporation, vol. 38(1), pages 164-184, March.
    5. Jordi Blanes I Vidal & Marc Möller, 2007. "When Should Leaders Share Information with Their Subordinates?," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 16(2), pages 251-283, June.
    6. Julio Rotemberg & Garth Saloner, 2000. "Visionaries, Managers, and Strategic Direction," RAND Journal of Economics, The RAND Corporation, vol. 31(4), pages 693-716, Winter.
    7. Prendergast, Canice & Stole, Lars, 1996. "Impetuous Youngsters and Jaded Old-Timers: Acquiring a Reputation for Learning," Journal of Political Economy, University of Chicago Press, vol. 104(6), pages 1105-1134, December.
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    Citations

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    Cited by:

    1. Koukoumelis, Anastasios & Levati, M. Vittoria & Weisser, Johannes, 2012. "Leading by words: A voluntary contribution experiment with one-way communication," Journal of Economic Behavior & Organization, Elsevier, vol. 81(2), pages 379-390.
    2. Sergei Guriev & Anton Suvorov, 2010. "Why Less Informed Managers May Be Better Leaders," Working Papers w0142, Center for Economic and Financial Research (CEFIR).
    3. Mohan, Nancy, 2014. "A review of the gender effect on pay, corporate performance and entry into top management," International Review of Economics & Finance, Elsevier, vol. 34(C), pages 41-51.
    4. Kathy Yuan & Emre Ozdenoren & Itay Goldstein, 2008. "Learning and Complementarities: Implications for Speculative Attacks," 2008 Meeting Papers 276, Society for Economic Dynamics.
    5. Florian Englmaier, 2010. "Managerial optimism and investment choice," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 31(4), pages 303-310.
    6. Steven N. Kaplan & Mark M. Klebanov & Morten Sorensen, 2008. "Which CEO Characteristics and Abilities Matter?," NBER Working Papers 14195, National Bureau of Economic Research, Inc.
    7. Zhou, Junjie, 2016. "Economics of leadership and hierarchy," Games and Economic Behavior, Elsevier, vol. 95(C), pages 88-106.

    More about this item

    JEL classification:

    • D21 - Microeconomics - - Production and Organizations - - - Firm Behavior: Theory
    • D23 - Microeconomics - - Production and Organizations - - - Organizational Behavior; Transaction Costs; Property Rights
    • D7 - Microeconomics - - Analysis of Collective Decision-Making

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