Team Leadership and Performance: Combining the Roles of Direction and Participation

17 Pages Posted: 23 Mar 2016 Last revised: 28 Aug 2017

See all articles by Morvarid Rahmani

Morvarid Rahmani

Georgia Institute of Technology - Scheller College of Business

Guillaume Roels

INSEAD - Technology and Operations Management

Uday S. Karmarkar

University of California, Los Angeles (UCLA) - Anderson School of Management

Date Written: March 21, 2016

Abstract

In knowledge-intensive projects, one of the challenges project team leaders often face is how to combine their roles of direction and contribution. In this paper, we propose a game-theoretic model of team leadership of co-productive projects and study how team leaders should combine their directing and contributing efforts depending on the team and project characteristics. Our analysis reveals that two types of team leadership approaches arise in equilibrium, namely, “participatory” team leadership, under which the team leader gives the team members full discretion on their choice of effort, and “directive” team leadership, under which the team leader demands team members to exert higher effort than what they would choose to exert voluntarily. We find that directive team leadership is optimal when the team members have low incentives, i.e., when their rewards are low, the size of the team is large, or failure is not too costly (e.g., continuation is possible); otherwise, participatory team leadership is optimal. Moreover, we show that a higher degree of efforts complementarity (as in innovative projects) leads to greater alignment between the team leader's and team members' contributing efforts, which, under directive team leadership, also implies greater alignment between the team leader's directing and contributing efforts. Finally, the team leader should set the team size and team members' rewards in a way that accentuates the difference between the two team leadership approaches. That is, under directive team leadership, she should set a large team size and offer the team members low rewards, whereas under participatory team leadership, she should set a small team size and offer the team members high rewards.

Keywords: team leadership, team performance, dynamic programming, game theory

JEL Classification: C70

Suggested Citation

Rahmani, Morvarid and Roels, Guillaume and Karmarkar, Uday S., Team Leadership and Performance: Combining the Roles of Direction and Participation (March 21, 2016). Available at SSRN: https://ssrn.com/abstract=2752523 or http://dx.doi.org/10.2139/ssrn.2752523

Morvarid Rahmani (Contact Author)

Georgia Institute of Technology - Scheller College of Business ( email )

800 West Peachtree St.
Atlanta, GA 30308
United States

Guillaume Roels

INSEAD - Technology and Operations Management ( email )

Boulevard de Constance
77 305 Fontainebleau Cedex
France

Uday S. Karmarkar

University of California, Los Angeles (UCLA) - Anderson School of Management ( email )

110 Westwood Plaza
Los Angeles, CA 90095-1481
United States

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