MGMT3021 Leadership

Week 5
Charismatic and Transformational Leadership

Famous Leader Analysis Assignment – 40%

- Due: 9am Mon 16 Sept (week 7)
- 3,000 words excluding the reference list
- Task:
1. Select a leader
2. Select one leadership theory or concept
3. Evaluate the leader using the theory / concept
4. Discuss ethical considerations
5. Evaluate the theory / concept

Case Study: Two Streams of Research

1. Famous leader
- At least 3 separate sources eg biographies, detailed analytical articles, filmed
biographies or documentaries – not written / prepared by the leader
2. Leadership Theory or Concept
- Extensive research about theory / concept – use suggested journals on Wattle
- Credible academic journals

- Identify the definition that you will be using in the report

Case Study: Criteria

1. Meets Basic requirements e.g. word limit, referencing
2. Critical Analysis
3. Evidence
4. Presentation and Structure

Charismatic Leadership

Charisma

- “followers' perceptions that the charismatic leader possesses extraordinary abilities

that exceed any regular expectation for a leader”
Components of Charisma

- Idealized influence (attributions)‐ Justifying the mission by appealing to values that

distinguish right from wrong and engaging in emotional displays.
- Idealized influence (behaviors) ‐ Communicating in symbolic ways to make the
message clear and vivid, and also symbolizing and embodying the moral unity of the
collective per se.
- Inspirational motivation / vision ‐ Demonstrating conviction and passion for the
mission.

Personalized and socialized charismatic leadership

Predictors of Charisma – Personality

+ Conscientiousness
+ Openness to Experiences
+ Extraversion
‐ Neuroticism

Agreeableness – predicted to be unrelated BUT related to Idealized Influence

Predictors of Charisma

+ Cognitive ability
+ Female (very small)*
+ Age – idealized influence

Charismatic Leadership Outcomes

- Task performance
- Group/Firm performance
- Organizational citizenship behaviors

Charismatic Leadership is Risky

- Charisma may not be a beneficial attribute for CEOs

- CEO performance predicted by past performance, not charisma (Angle, Nagarajan,
Sonnenfeld & Srinivasam, 2006)

The Dark Side of Charisma

- Being in awe of the leader reduces good suggestions by followers

- Desire for leader acceptance inhibits criticism by followers
- Adoration by followers creates delusions of leader infallibility
- Excessive confidence and optimism blind the leader to real dangers
 - Denial of problems and failures reduces org. learning
- Risky, grandiose projects are more likely to fail
- Taking complete credit for successes alienates some key followers
- Impulsive, non‐traditional behavior creates enemies as well as believers
- Dependence on the leader inhibits development of competent successors
- Failure to develop successors creates an eventual leadership crisis

Positive and Negative Charismatic Leaders

- Negative – personalized power orientation

o Devotion to themselves rather than ideals
o Dominate and subjugate followers by keeping them weak and dependent
o Centralized authority
o Rewards and punishment used to manipulate and control
o Self‐glorification and maintaining power rather than the welfare of the
followers

- Positive – socialized power orientation

o Devotion to ideology rather than themselves
o Internalization rather than personal identification
o Authority is delegated
o Self‐sacrifice and leading by example are used to communicate commitment
to values and mission, not to glorify the leader
o Rewards used to reinforce behavior consistent with mission

Jim Jones
- Vision: create economic and social equality
- Followers – poor, low education levels, low self‐esteem
- Obsessed with power
- Jonestown – 913 followers suicided, including 276 children
- https://www.youtube.com/watch?annotation_id=annotation_233774
119&feature=iv&src_vid=jpWr45bKWpE&v=SDKjQy‐NXLw

Transformational Leadership

- Mistake to study leadership without studying followership

- Moral leadership – fundamental needs, aspirations and values of followers
- Two types of leadership – transactional and transformational

Inspiring followers to believe in or identify with the leader's vision beyond their own self‐
interest

- Transmission Leadership – legitimate authority

- Transactional Leadership:
o Motivates followers by appealing to their self‐interest and exchanging
benefits e.g. contingent reward
- Transformational Leadership:
 o Appeals to the moral values of followers
o Raises consciousness about ethical issues
o Mobilises followers to reform institutions

Leader Behaviors – 4Is

- Idealized influence – setting an example – “the leader emphasizes the importance of

having a collective sense of mission”
- Individualized consideration – support to followers – “the leaders spends times
teaching and coaching”
- Inspirational motivation – communicating inspiring vision – “the leader articulates a
compelling vision of the future”
- Intellectual stimulation – empowering followers to innovate – “the leader gets
others to look at problems from different angles”

Transactional Leadership
- Contingent reward
- Active management by exception e.g. punishment
- Passive management by exception – finding mistakes / enforcing rules

Influencing Processes

- Transformational Leadership
o Internalization – increase perception of followers that task objectives are
consistent with values and interests
o Personal identification / charisma (not sufficient on its own)
- Transactional Leadership
o Instrumental compliance

Facilitating Conditions
- Considered to be effective in any situation
- More important in dynamic, unstable environment
- More likely when leaders are encouraged and empowered to be innovative / flexible

Performance Outcomes

Increased:
- employee satisfaction (Podsakoff MacKenzie, Moorman, & Fetter, 1990)
- organizational commitment (Bycio, Hackett, & Allen, 1995)
- satisfaction with supervision (Podsakoff et al., 1990),
- extra effort (Seltzer & Bass,1990),
- organizational citizenship (Podsakoff, MacKenzie, Paine, & Bachrach, 2000;
- Ng, 2017),
- Task performance (Yammarino, Spangler, & Bass, 1993; Ng, 2017)
- Innovative behavior (Ng, 2017)
Decreased: turnover intention (Bycio et al., 1995),
Transformational Leader?
Steinwart & Ziegler, 2014:
- “Creative”, “visionary”, “passionate”, “innovator”
- Absent: empowering and interactive e.g. binary view of people – “the best” or
“totally shitty” / “enlightened” or “an asshole”
- Industry v. People
- Psuedotransformational Leader? exploitation and selfconcern e.g. stock option
distribution:

“Whatever you give him [Kottke], I will match it.” Jobs’ response was,
“Okay. I will give him zero.”

Transformational Leader

- Fought for equal rights and the end of apartheid in South Africa
- Spent 27 years in prison (role model)
- Vision “I have cherished the ideal of a democratic and free society in which all
persons, will live together in harmony and with equal opportunities” (inspirational
motivation)
- African National Congress / multiracial consultation (intellectual stimulation)
- Known as a warm and caring person (Individualized consideration)

Charismatic and Transformational Leadership

- Charismatic leadership is a subset of TL

- Differences
o TL – Individualized consideration
o TL – Intellectual stimulation
o CL – followers are dependent on the leader for guidance and inspiration
o CL – more rare, likely to be visionary and emerge as entrepreneurs
o CL – often polarize people

Theoretical Strengths
- View leadership as a process
- Provide an explanation for the exceptional influence some leaders have over
followers
- Recognize the importance of emotions
- Include more variables – traits, behaviors, influencing processes, situation

Theoretical Weaknesses
- Antecedents – inconsistent results
- How? (although Ng, 2017 an important paper)
- Change?
 - Situational variables

Key Takeaways:
Charismatic & Transformational Leadership

- Helps to explain how leaders influence followers

- Incorporates a range of variables: traits, behaviors, influencing processes, followers,
performance outcomes
- Perceptions of charisma result from an interactive process between leader,
followers, situation
- Charismatic leaders can have enormous influence; however consequences are not
always beneficial
- Transformational leaders – charisma important, focus on developing people also
important. A range of positive outcomes.

Transformational more about the follower and motivating and empowering the follower
Charismatic can be an autocratic leader focus on value and vision