Leadership capabilities, management selection – game theoretic modelling

Abstract

This paper lays the foundation for constructing a comprehensive analytical tool for selection of managers on the basis of core leadership capabilities. A game theoretic model, where the key coefficient of the input vector was inferred from the twelve variables of the April² Leadership Enhancement Framework, using a set of structural equations, was adopted to reach the goals of the study. The underlying data for estimation of the coefficient was sampled from the population of graduate management students from a leading South African business school using Likert scale questionnaires. The paper finds highly significant predictive relationships between the key variables of the April² Leadership Enhancement Framework, confirming the theoretical claim of the model that managers with higher levels of development of these twelve characteristics can be regarded as having greater leadership capability. The structural equations revealed that the key coefficient of the main input vector of the game, despite having highly significant explanatory power over the underlying variables, is not generalizable. Further research should focus on improvement of the fit, by sampling from wider populations in order to make the tool applicable across the board. An important implication of the constructed model is that the signalling game of incomplete information, combined with key variables of the Leadership Enhancement Framework, serves as a robust foundation for a further development of an analytical tool for a structured selection of managers on the basis of their core leadership capabilities. It is also a first known attempt to combine psychometric techniques with a game theoretic framework in the context of leadership development.