Managers do things right Leaders do the right things

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A second reason for abandoning the term charisma is that in current usage it implies that the collectivities led by charismatic leaders are highly leader-centered and that the leader is the source of all, or almost all, organizational strategy and inspiration of followers. One popular conception of charismatic leadership is that it is necessarily highly directive and disempowering of followers (Lindholm, 1990). In this paper, I hope to demonstrate the huge potential for value based leadership to be empowering and effective.

The Process and Effects of Value Based Leadership

In this section, an overview of what Value Based leadership is and how it works is presented. There is both theory and empirical evidence to suggest that value based leadership has a substantial effect on organizational performance. Waldman and his associates reported two studies of value based leader behavior as an antecedent to organizational profitability (Waldman, Ramirez & House, 1996; Waldman, Atwater & House, 1996). In these studies value based leadership accounted for between fifteen and twenty five percent of firm profitability over the three years following the time at which value based leadership was assessed. The design of these studies controlled for executive tenure, firm size, environmental turbulence, and prior firm profitability.

The theoretical process by which value-based leadership functions is described in the following paragraphs. Evidence for this process is presented in more detail in later sections in which the specific theories contributing to value based leadership theory is discussed.

Value based leaders infuse collectives, organizations, and work with ideological values by articulating an ideological vision, a vision of a better future to which followers are claimed to have a moral right. By claiming that followers have this right, the values articulated in the vision are rendered ideological - expressions of what is morally right and good. Ideological values are usually, if not always, end values which are intrinsically satisfying in their own right. In contrast to pragmatic values such as material gain, pay, and status, end values cannot be exchanged for other values. Examples of end values are independence, dignity, equality, the right to education and self-determination, beauty, and a world of peace and order. Ideological values theoretically resonate with the deeply held values and emotions of followers.

Acccording to value based leadership theory the visions articulated by this genre of leaders are consistent with the collective identity of the followers, and are emotionally and motivationally arousing. Emotional and motivational arousal induces follower identification with the collective vision and with the collective, results in enhncement of follower self-efficacy and self-worth, and have powerful motivtional effects on followers and on overall orgnizational performance.

Leaders of industrial and government organizations often articulate visions for their organizations. Such visions need not be grandiose. Visions of outstanding leaders in the normal work world can embrace such ideological values as a challenging and rewarding work environment; professional development opportunities; freedom from highly controlling rules and supervision; a fair return to major constituencies; fairness, craftsmanship and integrity; high quality services or products; or respect for organizational members, clients or customers and for the environment in which the organization functions. Whether conceived solely by the leader, by prior members of the collective, or jointly with followers, the articulation of a collective ideological vision by leaders theoretically results in self-sacrifice and effort, above and beyond the call of duty, by organizational members and exceptional synergy among members of the collective.

Follower respect, trust, and self-sacrifice are stimulated by identification with the values inherent in the leader's vision and the leader's demonstration of courage, determination and self-sacrifice in the interest of the organization and the vision. According to this perspective, value based leaders use follower value identifiction, and the respect and trust they earn to motivate high performance and a sense of mission in quest of the collective vision, and to introduce major organizational change. For some individuals, latent values are brought to consciousness as a result of the vision articulated by value based leaders. Also, some individuals change their values to be consistent with those of the leader.

Visions articulated by value based leaders need not be formulated exclusively by a single leader. The collective vision may have been initially conceived by leaders and members of the collective who preceded the current leader. In this case, the leader is one who perpetuates the vision by continuing to communicate it and institutionalizing it through the establishment and maintenance of institutional means such as strategies, policies, norms, rituals, ceremonies, and symbols. Alternatively, organizational visions can be formulated by leaders in conjunction with organizational members.

The effects of the articulation of and emphasis on ideological values are rather profound. Organizational members become aware of ideological values that they share with the leader and as a collective. Members identify with the collective vision and with the organization--thus a high level of collective cohesion is developed. Collaborative interactions among organizational members is enhanced. Individuals experience a sense of collective efficacy and a heightened sense of self-esteem as a result of their cohesion and the leader's expressions of confidence in their ability to attain the vision. Further, motives relevant to the accomplishment of the vision are aroused and organizational members come to judge their self-worth in terms of their contribution to the collective and the attainment of the vision.

The result is strongly internalized member commitment, and intrinsic motivation to contribute to the organization and to the collective vision. Members are more inclined to support changes in technology, structure and strategies introduced by top management, which may result in an organizational culture characterized by values oriented toward teamwork and meeting customers', clients', constituents' and competitive needs. There ensues a marked reduction in intra-organizational conflict and a high degree of team effort and effectiveness. As noted above, members expend effort above and beyond the call of duty, and sacrifice their self-interest in the interest of the organization. As a result, individual motivation, organizational culture, strategy and structure are likely to become aligned with the collective vision.

A reinforcing process may also occur whereby organizational members increase their respect for and confidence in the leader and each other based on the resulting organizational success. As a result, their initial confidence and motivation is further reinforced. Such effects are consistent with the notion of romanticized leadership (Meindl, Ehrlich & Dukerich, 1985). The resulting increased confidence in the leader in turn gives the leader more influence and thus contributes to the leader's ability to further influence organizational performance.

This is an “ideal type” theoretical scenario. Clearly all the aspects of this scenario will not always come to fruition in response to value based leadership. No such claim is made. Rather, it is argued that organizational members will be motivated on the basis of shared internalized values and identification with the leader and the collective, which are far more motivational than alternative bases of motivation.

It is possible that value based leaders may introduce flawed strategies and that the result may be organizational decline or failure rather than improvement and success. It is also possible that the leader may stand for socially undesirable values such as ethnocentrism, racism, persecution, dishonesty, or unfair or illegal competitive practices (Lindholm 1990). Regardless of the strategy or values expressed by the leader, it is argued that a relationship based on value identification between leader and organizational members will result in increased member commitment and motivation, as well as increased organizational cohesion.