Leadership, Coordination and Corporate Culture

Publication Year
2013

Type

Journal Article
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.

Journal
Review of Economic Studies
Volume
80
Issue
2
Pages
512-537
Documents

Overconfident leaders make more precise mission statement which enhances coordination among the followers by reducing the leaders' time-inconsistency problem.