Do brains of managers with different leadership styles function differently in making rational managerial and financial decisions? (2016)

“…investigators are using functional neuroimaging to explore ways brain emotion reactions influence financial decision making.

United Arab Emirates University press release
EurekaAlert! 13 April 2016

Dr Ahmed Abdel-Maksoud, UAEU; with Professor Hassan HassabElnaby, Professor Haitham Elsamaloty, Dr Xin Wang, Dr Amal Said, all University of Toledo

Researchers from United Arab Emirates University and the University of Toledo are investigating whether the brains of managers with different leadership styles function differently when making rational managerial and financial decisions.

They are considering two dimensions of leadership style: ‘structure’ and ‘measure’:

• Structure – how managers use performance indicators, eg. in a rigid or lenient way. It in turn consists of two structures: ‘initiating’ and ‘consideration’. A manager strong on initiating will direct subordinates with clear performance targets; a manager strong on ‘consideration’ promotes them by creating supportive relationships
• Measure – how managers use performance measures. It consists of ‘objective’ and ‘subjective’ performance measures. Objective refers to the way managers use quantitative measures linked with targets, while subjective refers to the use of qualitative measures.

The team is using functional neuro-imaging to … investigate empirically whether brain activations vary for managers with different leadership styles; how manager’s leadership styles affect their use of performance measures (eg. in a rigid or lenient way); and whether misalignment between the leadership style of managers and their subordinates is related to various brain activations.

The study will also investigate how brain emotion reactions influence financial decision making, particularly in situations such as proximity to debt covenant violation and managing earnings in response to that.

…”We argue that this … is contingent upon managers’ leadership style and question how leadership style could influence the rationality of such decisions.”

Read the full press release here: Do brains of managers with different leadership styles function differently