Strategic Management: Formulation and Implementation

Charisma Leadership Theory

Charismatic leadership theory is an extension of attribution theory. This theory emphasizes the ability of the leader to communicate new vision of organizations to followers.

Although the charismatic concept or charisma goes as far back as the ancient Greeks and is cited in the Bible, its modern development is attributed to the work of Robert House.

Robert House, based on research findings from a variety of social disciplines that analysis of political and religious leaders, suggests that charismatic leaders are characterized by selfconfidence and confidence in subordinates, high expectations for subordinates, ideological vision, and the use of personal example.

Followers of charismatic leaders identify with the leader and the mission of the leader, exhibit extreme loyalty to and confidence in the leader, emulate the leader's values and behavior, and derive selfesteem from the relationship with the leader.

Although several variations on this model can be identified, I shall restrict my analysis to the general process.

A number of researchers have begun to explore the differences between transactional and transformational leaders.

Transactional leader
Transactional leaders motivate employees by appealing to selfinterest. That is, transactional leaders treat leadership as an exchange that is a "transaction" relationship between themself and their employees.
Transformational leader
A transformational leader is one who inspires trust, confidence, admiration, and loyalty from his followers. As a result, followers are motivated to exert high levels of effort out of a sense of personal loyalty to the leader, if not the organization.

Transactional leader sees his role as discovering the important needs and desires of subordinates, and then establishing contingencies of rewards or punishments in a way that permits people to meet their needs. Transformational leadership, on the other hand, does accept subordinates as they are. He "transforms" the needs and goals of subordinates.