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Leadership, coordination and mission-driven management

Patrick Bolton; Markus K. Brunnermeier; Laura Veldkamp

Title:
Leadership, coordination and mission-driven management
Author(s):
Bolton, Patrick
Brunnermeier, Markus K.
Veldkamp, Laura
Date:
Type:
Unpublished papers
Permanent URL:
Media Type:
application/pdf
Notes:
June 19, 2008.
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 overconfidence 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 overconfident leaders also inhibit communication with followers and leader overconfidence is costly when followers have sufficiently valuable signals.
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