Free Riding in Team Projects : The Role of the Leadership Style

Many knowledge-intensive projects, such as new product development and research and development, involve a team of workers who jointly work to achieve an uncertain outcome within a finite deadline. Because of the joint-production nature of work, such teams are often prone to free riding. In this paper, we consider the role of the leadership style on free-riding in teams and characterize which leadership style is the most efficient depending on the project characteristics. We consider the following extreme styles of leadership: Autocratic leaders unilaterally control the effort level of every other team member through tight monitoring, whereas democratic leaders give the team members considerable autonomy to choose their individual effort levels. We find that no leadership style dominates in general. In particular, autocratic leadership is preferred when the project has a high reward, when the deadline is tight, and when efforts are more substitutable, and democratic leadership is preferred otherwise. Our work highlights that, besides financial incentives, free-riding can be moderated by such organizational levers as leadership style