Leadership: A Personnel Economics Approach
A theory of leadership is proposed and tested. Leaders are characterized as those who have the ability to choose the right direction more frequently than their peers. The theory implies that leaders tend to be more able, place themselves in visible decision making situations more frequently, and are generalists. Also, the most able leaders should be found in the highest variance industries, where decision making has the greatest payoff. The theory is tested using data on Stanford business school alumni and is confirmed. Leaders are generalists rather than specialists, both innately and in their pattern of skill acquisition.
I gratefully acknowledge comments by my colleagues at Stanford University and the able research assistance of Nicholas Obradovich. The views expressed herein are those of the author and do not necessarily reflect the views of the National Bureau of Economic Research.
“Leadership: A Personnel Economics Approach,” Labour Economics. Volume 19, Issue 1, January 2012, Pages 92-101