To understand leadership, it is necessary to understand the purpose of an organization. Organizations are hierarchies with leaders at the top. Why do we have leaders instead of an algorithm making decisions? The theory of the firm recognizes benefits to centralizing authority but these...

Despite suggestions that business school professors do not understand what actually accounts for the performance of business organizations, the evidence is anecdotal at best. We review past work, develop expectations, and provide large-scale evidence for examining the validity of such...