NATIONAL BUREAU OF ECONOMIC RESEARCH
NATIONAL BUREAU OF ECONOMIC RESEARCH

Leadership, Coordination and Mission-Driven Management

Patrick Bolton, Markus K. Brunnermeier, Laura Veldkamp

NBER Working Paper No. 14339
Issued in September 2008
NBER Program(s):   CF

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.

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Document Object Identifier (DOI): 10.3386/w14339

Published: Review of Economic Studies (2012) doi: 10.1093/restud/rds041 First published online: December 5, 2012

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