In an era where corporate leadership is often glamorized, a groundbreaking study is turning heads in the business world by showing the dark side of leadership: some leaders abuse their authority and undermine team collaboration.

My colleague Stephen Rosenbaum from Hult International Business School, along with Stephan Billinger from the University of Southern Denmark, have unveiled findings that challenge long-held beliefs about the role of managers in fostering worker cooperation. Their study, published in the Journal of Behavioural and Experimental Economics and presented to the United Nations’ International Labour Organization, is causing ripples across industries.

The study used a meta-analysis of economic experiments based on the public goods game (PGG), a model that mirrors real-world team dynamics. In this setting, participants decide whether to contribute to a collective fund or keep resources for themselves. The twist? The introduction of managers and workers, with managers wielding tools like rewards, punishments, monitoring, and information distribution.

Leaders Hurt Cooperation

The most startling revelation? The effects of traditional leadership mechanisms are not as enduring as once thought. While managers initially boost worker cooperation, this influence wanes over time. This discovery challenges the conventional approach of relying heavily on managerial oversight for team productivity.

The research delves into the “dark side of leadership,” revealing how managerial presence can often be more of a hindrance than a help. This includes increased managerial opportunism – where managers prioritize personal gains over team success – leading to a breakdown in trust and diminished effort from workers.

The Unexpected Benefits of Punishment

Contrary to popular belief, the study found that punishment, when used judiciously, can have a beneficial impact. Unlike other leadership tools, punishment maintained and even increased group contributions over time. This finding suggests a need for a nuanced understanding of punishment in the workplace.

The study delivers a bold call to action for today’s business leaders. It advocates for a reevaluation of traditional organizational structures that overemphasize managerial authority. Instead, it suggests a more balanced approach, understanding worker motivation beyond just monetary incentives and recognizing the potential pitfalls of unchecked managerial power.

As the business landscape continues to evolve, this study serves as a crucial reminder of the need for innovative leadership strategies. The findings highlight the importance of adaptability, trust-building, and a deeper understanding of the human elements in the workplace.