How Good Can Bad Leaders Be? A Multidimensional Perspective on Leader Selection (with Benjamin Tur)
Despite a large body of research on what characterizes good leaders and how to select them, organizations often recruit and promote suboptimal leaders. Existing approaches in the leadership literature view the emergence of bad leaders as failure of the selection process. In this paper, we take a different stance by suggesting that the selection of inefficient leaders might be efficient for organizations in some situations. Drawing from the field of economics and more specifically the theory of comparative advantage (Ricardo, 1817), we argue that organizations should approach leader selection the same way they approach the allocation of any other limited resource: by taking into account the opportunity costs of allocating an individual to the role of a leader instead of a follower. We derive propositions from our theoretical model, and surmise that selecting leaders based on leadership and followership skills in comparison to selecting leaders only based on leadership skills will lead to efficiency gains.