University / Organisation : University of Lausanne

Paper or project ? project

Title : Charismatic Leadership and Clarity in Relational Contracts

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Abstract : Relational contracts, which are informal agreements based on trust that are self-enforcing, play a crucial role in organizational settings. These contracts constitute an equilibrium in repeated games, there is no interest for parties to deviate. For these contracts to succeed, two key elements are necessary: credibility and clarity. While credibility—whether parties can trust each other’s promises—has been well-studied, clarity—whether both parties have a mutual understanding of the promises made—remains underexplored. This research explores whether using charismatic leadership tactics—using compelling language and symbolism—can enhance clarity in relational contracts. Specifically, it examines whether storytelling-driven leadership can strengthen not only normative consensus (i.e., shared understanding), but also consistency in normative behavior—and ultimately support equilibration (i.e., consistent beliefs and actions). Through two laboratory experiments, this study will (1) test whether an external charismatic leader can promote equilibration in a scenario-based context, and (2) examine whether participants themselves can harness charismatic communication to formulate stronger agreements that yield better outcomes without external guidance. This research aims to provide new insights into how charisma—symbolic and emotionally charged messaging—can foster salience and thus more effective and resilient implementation of relational contracts