Leaders emerge in any business setting, and leadership is a vital ingredient in shaping and motivating employees within an organization. The type of leadership trait he or she imposes will reflect on how employees respond. The concept of leadership is a process by which one person influences the thoughts, attitudes, and behaviors of others. Sounds like a hefty task doesn’t it? Well, let’s start by further examining the characteristics of a leader. In an organization, leaders define the direction and vision of the firm. They lead by example, and encourage others to follow their vision. They bring out the best in every individual, and also have the ability to bring everyone together when needed. “The success of any organization relies heavily on rather it is piloted by a skillful and influential leader.”[1]
There are several types of leaders as classified by two well-known business theorists. Max Weber (1948) classifies leaders as Bureaucratic, Traditional, and Charismatic, whereas Sir MacGregor Burns (1978) classifies leaders as Transformation and Transactional. In this blog, I will focus on charismatic and transformational leaders because these types of leaders share similar traits and characteristics. They are also emerging in business and politics, and are most prevalent in our generation (cue President Obama speech and Steve Jobs Keynote).
Charismatic leadership can yield desirable results. They’re able to motivate employees to give extra output than what is expected from them otherwise. They heighten morale and ensure employees are socially responsible. “These individuals are courageous, value driven, lifelong learners, believe in people, and have the ability to deal with complexity, ambiguity, and uncertainty.”[2] In a way, these individuals sound unreal, but realistically the transformation process requires a lifelong commitment to learning about yourself and others. The ability to possess and exhibit all of these qualities is rare, but in most cases an individual can evolve and progress into a charismatic leader. They are susceptible to imperfections but what makes them exceptional is how they remedy their mistakes. Their charismatic personality is what attracts people to follow them. In addition, “their attraction is based on personality, warmth, caring, energy, commitment, or common values.”[3] Reputation will also continue to play a vital role for these leaders. Their power source and recognition is based on how they are perceived in their business community. Lastly, a leader’s ability to communicate in a commanding and compelling way will dictate his/her influence over others. Many charismatic leaders have the power of eloquence and the gift of speech, i.e. Martin Luther King. With the gift of speech, a charismatic leader can inspire and convince employees. Their general optimistic and positive nature will draw employees to them.
Although having a charismatic leader can be a powerful resource for an organization, there are some evident pitfalls. In a recent blog I have discovered, the author identifies the potential for such leaders to engage in self-aggrandizing behavior. Employees will develop over-dependence and rely on the decisions of the leader. The author states, “ This misperception of the boss’s role results in fiduciary distortions that negatively influence everything from corporate governance and the relationship between the board and management to employee self-perception and declining productivity resulting from a passive over-dependence on the singular figure of the charismatic boss.”[4] The author’s take seems to be a bit extreme, but there is some level of truth. Employees may develop a halo effect towards the leader to which people will begin to blindly follow. This will also likely diminish the identity of the employees and inflate the ego of the leader.
The biggest challenge for anyone in a leadership role will be to find the perfect balance between having a charismatic personality and the ability to focus on the main objectives of the firm. Charisma will be able to help you gain influence, but it’s the result which will matter most.
Check out the Tedtalk video below on how great leaders inspire and feel free leave me any comments.
Ray Lam 
Everything in your post defines what a leader should be and the necessary traits to be just that. I do have to disagree that “employees will develop over-dependence and rely on the decisions of the leader.” It is true that followers will tend to heavily weight their leaders decision of more importance as compared to others. It seems as though it takes it to the “extreme”. People will listen, however, should a leader in anyway act or say something that is unethical, or say something one off, most people will be turned off. Also, I believe even if a charismatic leader gains a lot of followers, individual beliefs and values may differ even if you respect them. In my opinion, I believe leaders need to be able to “give and take”, fostering trust to allow followers to voice their opinion and not always value the opinion of their leader, even though it may be valuable. Agree?
Great comment.
But I will have to disagree on the point that a lot of the leaders welcome opinions from their employees instead they want them to buy into their vision. Listening to the employees is hard when the leader has a clear vision in their mind. Even though, a lot of the employees might contribute but depends on the leader whether to take that view point or not. I believe leaders need to have a stand at something because they got the experience and the skills to make any important decisions. A leader is like a foundation for the business. If the foundation is not laid out strong, the business won’t be strong. Therefore, I believe that leaders should be able to take contributions but implement the ones that are right.
Overall, a very good post about how a leader needs to be.
Hey Jas,
I think what I meant was once a leader has established their vision or foundation, they should value the opinions of their employees. This is important because the employees are at the front line of any business, therefore they are the first individuals who notices the changes needed. I do agree that a leader must create a strong foundation but must not neglect the views of their employees. Although leaders possess the experience and skills, this may not be enough to contribute to the success of an organization. The ability to manage the people within to work cohesively and create a positive organizational culture will be instrumental.
Thanks for your comment Jas. Cheers.
I concur with your last statement, that leaders need to be able to “give and take”. As I’ve mentioned, charisma can help employees feel a sense of openness, and encourage employees to be involved. In return a great leader must also be a great listener, and value the input of his/her followers. We’ve also mentioned in class that charismatic leaders are more likely to be concern with both employees and results. I think the most important aspect of leadership is for an individual in power to be able to strike that balance between the ability to motivate and inspire and yet be able to manage and maximize output.
As for your first point, the reason I agreed with the author to some extent is because of the case of Enron. Enron had be lead by some charismatic individuals. They were visionaries and employees were largely draw to them by the potential they saw in their company and for most part money (reward). The type of “hype” and promises Enron executives made to its employees almost brainwashed them. Employees believed their leader’s decisions because they were seeing results. They didn’t question the anomalies and questionable business practices because they were rewarded lavishly. Charisma can be a powerful weapon but sometimes could be used for all the wrong reasons. It’s difficult sometimes for employees at certain levels to see the true intentions of a charismatic leader.
Thanks for your excellent input Kevin.
Cheers.
Ray, great article on leadership and even better discussion with the comments.
I initially was thinking the same thing while reading your blog; how would I define a successful leader? Charismatic leaders are great because they have this innate ability to speak to the public and develop followers/friends. However, how they use this charismatic power is just as critical to their success as a leader. If you define a leader by charisma/popularity, great leaders would be people like Hitler and Obama (note: Hitler was a politician who began a party, developed a following, and was voted majority power in Germany pre-WWII). Enron’s leaders were more deceptive or two-faced knowing what they were doing yet treating others like everything was normal. Politicians are leaders of their respective parties but some tend to be greatly unpopular with the public.
What I am implying is that one has to be cautious of charisma. A leaders results may be overlooked if you like and/or admire that individual. As we can see in the US, Obama is becoming less popular as the his leadership traits are being focused on more than his charisma during the campaign.
In conclusion, I agree with you. Charismatic leaders are crucial to a company, but (ethical) results are the more important factor of a good leader within a business.
You know what, I have had an experience of both kinds of managers, ones who consider their employees and the others who don’t. Guess who is more effective, the one who took their employees’ views into consideration. So, I do agree with you that managers should value the opinions of their employees. The challenge is to change the rest who are not taking their staff into effect.
Keep up the good job.
Interesting blog on Charismatic leadership! Charisma is an attractive trait not only in businesses but also in personal lives. We often fall into charismatic personalities and that sometimes influence our decision making.
In my opinion, the type of leadership an organization should have should be based on what kind of objectives or goals the organization is trying to attain, and the people working for the organization. A charismatic leader may not work well in an organization with traditional structure and managers and employees who are so accustomed to the old ways of thinking and ways of doing things.
One thing I learn in many of my business classes is that there is no sure answer to anything. I am starting to develop this belief that there are always more than one answer and the correct answer is always “it depends” because there are always so many factors to consider before you can be sure the answer is correct!
Thanks for the comment Jen.
Its amazing how much of leadership is embedded in one’s personality. It seems to me that a lot of the characteristics that you mention you can generally picture someone you personally know with those characteristics.I think that’s quite key to being a leader as well, as different people have different qualities and using them to lead is part of the ongoing leadership question. Does that mean anybody and everybody has the ability to be a great leader though. I think different people have to work at it at different levels, because much of it is ingrained in personality.