What Choices Do Employees Have When Facing Destructive Leaders, and What Are the Odds of a Good Outcome for the Employees? A Systemic Perspective

Abstract

The destructive leadership evolution model derives from the centuries-old Gresham’s Law, and it states that “bad” leaders drive out “good” leaders, but “good” leaders cannot drive out “bad” leaders when “bad” leaders are allowed to operate with impunity. Employees will therefore face a choice between becoming a colluder, a conformer, or a leaver unless top management successfully resolves the situation. This paper analyzes the situation from the employees’ perspective using Gresham’s Law as the starting point. The principal advantage of using Gresham’s Law lies in its systemic perspective: it treats corporations as complex adaptive systems and therefore makes explicit the conditions under which particular outcomes are likely to arise. The analysis itself consists of using a random choice model and Monte Carlo simulations. The study is therefore exploratory in nature, and it demonstrates that the probability of averting destructive leadership tendencies remains low unless top management intervenes deliberately. These results align with empirical results of other researchers, indicating that managers are not any more effective at curbing destructive leaders than can be predicted by a simple random choice model. Consequently, the model suggests that for most employees a rational course of action is to exit the organization except where other compelling considerations outweigh the costs of staying.