Effective Leadership and the Allocation and Exercise of Power in Organisations

We experimentally investigate whether delegation can be an effective leadership behavior to motivate followers. In particular, we study how the allocation and exercise of power – the right to choose projects – by leaders affects the subsequent implementation of the chosen projects by followers. To isolate the pure motivational effect of delegation, we focus on whether the amount of effort that followers exert to implement the exact same project depends on who has chosen the project and on what information was available when making the project choice. We find that followers implement projects efficiently if they have chosen them themselves, but reduce implementation effort if the same projects are imposed on them by leaders. But this motivational effect of delegation is persistent if and only if followers must implement projects that they themselves would not have chosen.