Better to have led and lost than never to have led at all? Lost leadership and effort provision in dynamic tournaments

Abstract

Research Summary In this paper, we develop and test a behavioral theory of lost leadership. Using insights from the literature on goals as reference points and goal‐setting theory, we predict that former leaders exert more effort compared to otherwise identical competitors. We test this prediction using two contexts. The first data comes from an educational business simulation game. The second setting draws on field data from a 2‐month banking sales contest. We find that provision of effort increases following the loss of leadership. We also explore whether past leaders exert more effort in general or shift effort from other, potentially less‐salient goals. We find evidence of both mechanisms. Finally, investigating the temporal effects, we find that having been a leader has an attenuating effect on subsequent behavior. Managerial Summary Many competitions—such as sports championships, sales contests, idea‐sourcing challenges, and competitions for promotions—can be understood as dynamic tournaments, in which rivals rise and fall in the provisional rankings as they compete over time for a terminal prize. This performance volatility can have important consequences for contestants' behavior. Focusing on the event of lost leadership, we show that former leaders try harder: those that are displaced from a prize‐eligible position exert more effort in subsequent rounds, compared with identically placed rivals who have never led. Former leaders provide more effort overall, and also shift attention away from other tasks. Our results, which suggest that setbacks can be motivational, have implications for the optimal design of dynamic competitions.

Organizational Goals, Outcomes, and the Assessment of Performance: Reconceptualizing Success in Management Studies

“…Also, small group dynamics such as social features of teams and communities (D'Adderio, 2014) predict organizational goals structure and formation. Finally, leaders and CEOs because of their vision and values (Carton et al., 2014), previous leadership experiences (Gutierrez et al., 2021), as well as personal preferences (i.e., risk aversion) (Opper et al., 2017) significantly influence the definition of goals in the organizations they lead. In sum, researchers have made significant efforts to understand the determinants of organizational goals from an individual or group perspective, typically focusing on those persons or groups who have the most influence over what the organization does, with a focus on important decision‐makers, the executive core, or the dominant coalition.…”

Organizational Goals, Outcomes, and the Assessment of Performance: Reconceptualizing Success in Management Studies

“…Also, small group dynamics such as social features of teams and communities (D'Adderio, 2014) predict organizational goals structure and formation. Finally, leaders and CEOs because of their vision and values (Carton et al, 2014), previous leadership experiences (Gutierrez et al, 2021), as well as personal preferences (i.e., risk aversion) (Opper et al, 2017) significantly influence the definition of goals in the organizations they lead. In sum, researchers have made significant efforts to understand the determinants of organizational goals from an individual or group perspective, typically focusing on those persons or groups who have the most influence over what the organization does, with a focus on important decision-makers, the executive core, or the dominant coalition.…”

Getting along to get ahead: The role of social context in tournament promotion and reward systems

“…In its simplest form, a tournament is a contest between individuals attempting to advance to another hierarchical level within an organization and obtain a corresponding increase in pay, prestige, status, and so on [ 9 ]. The idea that organizations can use tournaments as a means of employee promotion and remuneration was first theorized decades ago [ 2 ].…”