Can entrenched lame ducks be optimal? An economic model of leadership and organizational change

Dow, J and Raposo, C (2004) Can entrenched lame ducks be optimal? An economic model of leadership and organizational change. Working Paper. London Business School IFA Working Paper.

Abstract

We study the role of chief executives in motivating employees to follow their initiatives for strategic change. In our model, leaders can be effective or ineffective. Effective leaders are able to make changes because employees will voluntarily agree to follow them. Ineffective leaders are unable to make changes because employees will be unwilling to follow and will tacitly resist and block plans for change. In our model, employees and leaders share the same objectives for the firm's success, but employees will be unwilling to follow a leader if they do not believe he is likely to have a high chance of devising a successful strategy. Since we assume that incompetent leaders are less likely to generate workable strategies, delay in proposing change is viewed as procrastination and lack of strategic vision. This implies that leaders must initiate change within a limited time horizon, or become lame ducks who are merely marking time until their replacement.