Follower behavior renders leader behavior endogenous: The simultaneity problem, estimation challenges, and solutions

Abstract

Traditionally, leadership research has focused on unidirectional questions in which leader attributes are considered to determine follower outcomes. However, many phenomena between leaders (x) and followers (y) involve a simultaneous influence process in which x affects y, and y also affects x (i.e., simultaneity). Unfortunately, this simultaneity bias creates endogeneity and is often not properly addressed in the extant leadership literature. In three studies, we demonstrate the challenges of simultaneity bias and present two methodological solutions that can help to correct problems of simultaneity bias. We focus on simultaneity that occurs between follower resistance and leader control. We mathematically demonstrate the simultaneity bias using a simulated dataset and show how this bias can be statistically solved using an instrumental variable estimation approach. Furthermore, we present how the simultaneity bias can be resolved using an experimental design. We discuss how our approach advances theory and methods for leadership research.