Ability, Openness, and Managerial Decision Making

Impact of the ability and the degree of openness of a manager on decision making is studied. Whether a more able manager increases or decreases the effort of a subordinate depends on the relative quality of information. Greater openness is a two-edged sword: it increases the likelihood that more information will be employed, but it reduces the manager’s incentive to expend effort on obtaining better information. A more open manager is more desirable when the position is relatively more important or the prior information is not very accurate.