Footnote:
Nach Informationen von SSRN wurde die ursprüngliche Fassung des Dokuments February 1, 2020 erstellt
Description:
Organizations are hierarchies with leaders at the top. Why do we have leaders instead of an algorithm making decisions? The theory of the firm recognizes benefits to centralizing authority but these organizational benefits from hierarchy have not been clearly separated from the specific contributions of leaders. We define leadership as the ability to successfully manage agency and coordination costs created by the purpose of a given organization. The balance between these two types of costs depends on the purpose of the organization and determines the traits relevant for effective leadership. We develop hypotheses about the role of leadership across organizations. We test our hypotheses with data on Soccer Managers in Brazil, NFL coaches, and Deans of Business and Law Schools. Consistent with our hypotheses we find that leadership and changing leaders matters more in sports teams than for Deans