How Corporate Boards Choose Charismatic Leaders

Often the board of directors is not an effective auditor for recruiting and monitoring the actions of charismatic leaders. Greve (2004) pointed to Khurana’s (2002) work on the irrational search for charismatic CEOs. Board of directors of major corporations believe strongly in the ability of a CEO to rescue a troubled firm. This irrational enthusiasm stems from: 1. Directors taking cues from securities analysts and business journals prompting directors to believe that a celebrity CEO can turn around a company’s low performance, 2. Directors evaluating CEOs based on past performance and viewing social traits characterized as charisma as a panacea, and 3. Directors and analysts being complicit in choosing a CEO based on these preconceived notions of CEO value. Invariably, there is no voice of reason between directors and analysts in auditing and objectively searching for a CEO with the best overall fit within a company’s corporate culture. Once a board sets its sights on a specific CEO, analysts follow suit. Greve’s reported that this favoritism toward charismatic CEOs has impact on organizational development. First, by choosing a CEO based on past performance or celebrity status before searching inside the company for qualified candidates causes low morale within the company. Second, directors operate from a position of weakness in contractual negotiations with a highly sought-after CEO. Inflated expectations of the new CEO is a recipe for failure when expectations do not materialize based on high expectations, risky strategic decisions, and the exorbitant power of the new CEO. Corporate challenges may be more complex than originally defined or take longer to solve than anticipated.

References

Greve, H. (2004 May). Searching for a corporate savior: The irrational quest for charismatic ceos reviewed work(s). American Journal of Sociology, 109(6), 1542-1544.

Khurana, R. (2002). Searching for a corporate savior: The irrational quest for charismatic ceos. Princeton, N.J.: Princeton University Press.

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Charismatic Leaders Spark Innovation Within Followers

Michaelis, Stegmaier, and Sonntag (2009) said that charismatic leadership is related to innovation implementation behavior and plays a significant role in followers demonstrating behavior characterized as innovative. Second, this innovative-oriented environment allows followers to create a greater trust for the leader, particularly as it relates to the opportunity for followers to be change agents in that environment. Third, followers had to feel trust in the innovative aspirations of top managers as well as immediate managers. It was more important for followers to trust in top management because top management is where the fundamental changes within an organization take place. If top management was not committed to change initiatives, it logically follows that trust in immediate managers would be limited.


References

Michaelis, B., Stegmaier, R., and Sonntag, K. (2009 Dec.). Affective commitment to change and innovation implementation behavior: The role of charismatic leadership and employees’ trust in top management. Journal of Change Management, 9(4), 399-417.

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Charismatic Leaders Develop Disciples to Influence Organizational Development

Galvin, Balkundi, and Waldman (2010) discussed the ability of charismatic leaders to develop disciples or surrogates within an organization. The authors said these surrogates promote, defend, and model behavior after the charismatic leader. Charismatic leaders identify and train surrogates, either formally or informally, which allows charismatic leaders to have influence in distant areas within an organization. Surrogates create networks, social processes, and flow information within the organization. These networks serve as means for the charismatic leader to influence an organization by dispersing information. Although a rouge surrogate could harm a networked system by sending information oppositional to the goals of the charismatic leader, the authors note that surrogates are selected to occupy their positions based on the supportive behavior they exhibit in line with the desires of the charismatic leader.


References

Galvin, B., Balkundi, P., and Waldman, D.A. (2010 Jul.). Spreading the word: The role of surrogates in charismatic leadership. Academy of Management Review, 35(3), 477-494.

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Environments for Charismatic Leadership

Shamir and Howell (1999) spoke about the environmental conditions best suited and most ill-suited for charismatic leaders. Shamir and Howell said charismatic leaders are more likely to emerge in weak or uncertain environments where performance is difficult to measure, because emotions run high and individuals are easier to influence in their desire for things to return to normal. Conversely, charismatic leaders are ill-suited when environmental conditions are strong or stable, because individuals are more certain and rational requiring more transactional rewards for increased productivity. The determination of whether environmental conditions are weak or strong is purely subjective and decided by employees.


References

Shamir, B., and Howell, J.M. (1999 Summer). Organizational and contextual influences on the emergence and effectiveness of charismatic leadership. Leadership Quarterly, 10(2), 257.

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The Transactional Nature of Charismatic Leadership

Often researchers who view charismatic leaders as expert manipulators do not investigate the transactional relationship between the charismatic leader and followers. Kallis (2006) discussed the impact of leaders and followers who benefited within the German and Italian military under Adolf Hitler and Benito Mussolini. To suggest that the German and Italian citizenry followed the dictates of Hitler and Mussolini out of fear would undermine the strengths of the charismatic leadership model. Although each man articulated and exemplified an ideal for his respective country, a transactional relationship existed between the leaders and followers. Followers supported Hitler and Mussolini, because these leaders instilled the self-respect and integrity within their followers lost in World War I. Both leaders represented the glory and esteem that their fellow countrymen saw within themselves. Kallis suggested that this intangible exchange created an unqualified psychological contract between the leaders and followers. In essence, if Hitler and Mussolini could restore their respective countries to greatness, they could garner continual support from constituents. Loyalty among followers grew incrementally as the charisma of the two leaders created a mythology of future prosperity. Hitler and Mussolini became prophets and messiahs to their followers.


References

Kallis, A. (2006, June). Fascism, ‘charisma’ and ‘charismatisation’: Weber’s model of ‘charismatic domination’ and interwar European fascism. Totalitarian Movements & Political Religion, 7(1), 25-43.

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The Charismatic Leader's Speaking Style

DeVries, Bakker-Pieper, and Oostenveld (2010) noted the dynamics of charismatic leader’s communication style. They submitted that a charismatic leader’s communication style is characterized as assured, supportive, argumentative, precise, and verbally non-aggressive. These authors also found that expressiveness was not believed to be related to charismatic leadership. DeVries, Bakker-Pieper, and Oostenveld said that expressiveness is not a necessary trait for charismatic leaders to reach their goals. Mahatma Gandhi is an example of a less expressive charismatic leader, yet effective. In addition, preciseness of a charismatic leader’s communication style had a significant effect on the leader’s performance and satisfaction by subordinates. A charismatic leader’s preciseness, together with the leader’s supportiveness, lent greatly to enhancing subordinates knowledge collecting from the leader.

References

DeVries, R., Bakker-Pieper, A., and Oostenveld, W. (2010 Sep.). Leadership=communication? The relations of leaders’ communication styles with leadership styles, knowledge sharing and leadership outcomes. Journal of Business & Psychology, 25(3), 367-380.

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Charismatic Leadership Versus Transformational Leadership

Researchers disagree about charismatic leadership and transformational leadership being synonymous or two distinct leadership models. Den Hartog, House, Hanges, Ruiz-Quintanilla, and Dorfman (1999) stated in their study that several attributes reflecting charismatic/transformational leadership are universally endorsed as contributing to outstanding leadership. These attributes include: motive arouser, foresight, encouraging, communicative, trustworthy, dynamic, positive, confidence builder, and motivational.

However, Yukl (1999) drew a distinction between the two leadership models. Yukl stressed that transformational leaders seem more likely to take initiatives that empower followers and make followers partners in an endeavor. Contrarily, charismatic leaders seem more likely to emphasize the need for radical organizational changes that can be accomplished if followers place their trust in the charismatic leader’s abilities. The core behavior, motivation, and traits make transformational and charismatic leadership unlikely to occur at the same time.

Dubrin (2010) noted that a key component of transformational leadership is the leader’s ability to inspire people and make major changes within an organization. Although charismatic leaders are inspirational, they do not bring about major changes within an organization (Dubrin, 2010). Johnson (2012) argued that charismatic leadership and transformational leadership were not interchangeable terms. Johnson suggested that charismatic leadership is more individual or personality centered in that followers had emotional ties to the leader that approached idol worship. The transformational leader encouraged followers to be independent of leadership; whereas the charismatic leader encouraged followers to rely on the leader.

Johnson postulated that transformational leaders raise the morality of both leaders and followers and serve as a model for ideal behavior. On the other hand, charismatic leadership is more results focused. Johnson believed emphatically that transformational leaders are charismatic, but that charismatic leaders are not necessarily transformational. Charismatic leaders are more concerned about what works as opposed to what is right. Johnson appeared not to disagree that charismatic leaders affect organizational development, but inherently believed that the moral barometer within charismatic leaders is ethically skewed toward achieving successful results at any cost. Johnson appeared suspicious of the charismatic leader’s motives and seemed to suggest that impure thoughts produce impure results.

References

Den Hartog, D.N., House, R.J., Hanges, P.J., Ruiz-Quintanilla, S.A., and Dorfman, P.W. (1999 Summer). Culture specific and cross culturally generalizable implicit leadership theories: are attributes of charismatic/transformational leadership universally endorsed? Leadership Quarterly, 10(2), 219.

Dubrin, A. J. (2010). Leadership: research, findings, and skills, 6th edition. Ohio: South-Western Centage Learning.

Johnson, C.E. (2012). Meeting the ethical challenges of leadership: Casting light or shadow, 4th ed. Thousand Oaks, CA: SAGE Publications, Inc.

Yukl. G. (1999 Summer). An evaluation of conceptual weaknesses in transformational and charismatic leadership theories. Leadership Quarterly, 10(2), 285.

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