The members of a firm must work together on a big joint project. There are many ways the project could be implemented. One obvious procedure is dictatorial: the CEO simply choses her favorite option and demands that everyone follow her orders. This is sometimes called directive or narcissistic leadership. Another procedure is more participative: The CEO asks everyone their opinion and a decision is made. Everyone might vote so the decision is made democratically or at the very least the CEO makes everyone’s opinions into account before making the decision herself.
In an emergency situation where decisions need to be made quickly, dictatorial leadership makes sense. If you are in the middle of capturing Bin Laden, there is no time to mess around with participative leadership. One person gives orders and everyone follows.
But in many other situations, it is wise to ask everyone’s opinions before embarking on a joint project. The obvious rationale is that information is dispersed and communication might help to aggregate information. The less obvious reason (to economists!): If people do not feel they “buy into” the decision, they are not going to work hard. There may be no information to aggregate but the mere fact that everyone votes means that even the minority who voted against the decision feel committed to it.
Cheap Talk 
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May 3, 2011 at 11:48 am
twicker
BTW, the “buy in” works because people have had a chance to have a voice in the decision, to be heard, even if the decision then went against the people. Dependent, of course, on whether the procedure is perceived to be fair or not. Lots of work in the area (e.g., Lind & Tyler, 1988).
As it happens, I just finished up a PhD-level research in leadership class w/Allan. One of his more fascinating experiments was where he had people perform a task, knowing that they would be evaluated at the end. Then, *after* they completed the task, and *after* the evaluation was written (i.e., already determined), but *before* it was presented to them, some subjects were asked to provide input into the process (the control group was not given that opportunity).
Again: remember that the evaluation *had already been determined* by the time people were given voice. Even so, the people who had an opportunity to express an opinion were significantly more likely to express satisfaction with the results than those who had no opportunity to do so.
It’s all about the perception of having some control over one’s environment. In emergencies, this is less important, as long as one has trust in the person giving the commands (the effect is fully mediated by trust). When people know that there’s time to provide input, then they tend to prefer more participative leadership (I say “tend” because, in reality, we’ll put up with a lot of directive leadership/management even outside of emergencies).