Legitimacy, Communication and Leadership in the Turnaround Game

David Cooper (), Roberto Weber and Jordi Brandts

No 755, Working Papers from Barcelona School of Economics

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.

Keywords: experiments; communication; Leadership; job selection; coordination failure (search for similar items in EconPapers)
JEL-codes: C72 C92 D83 (search for similar items in EconPapers)
Date: 2015-09
New Economics Papers: this item is included in nep-cdm, nep-exp, nep-gth, nep-hpe and nep-hrm
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (34)

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Related works:
Journal Article: Legitimacy, Communication, and Leadership in the Turnaround Game (2015)
Working Paper: Legitimacy, Communication and Leadership in the Turnaround Game (2014)
Working Paper: Legitimacy, Communication and Leadership in the Turnaround Game (2014)
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