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(JPMNT) Journal of Process Management – New Technologies, International
Vol. 3, No.2, 2015.
CHARISMATIC LEADERSHIP AND POWER: USING THE POWER OF
CHARISMA FOR BETTER LEADERSHIP IN THE ENTERPRISES
Prof. KRUME NIKOLOSKI PhD
Faculty of Economics - Stip, Republic of Macedonia
e-mail: krume.nikoloski@ugd.edu.mk
Abstract: The role of the leader is to work with the ethical behavior of the charismatic
people through his cooperates in order to achieve the leader. Perhaps the most suitable positions
goals of the organization. For that aim, he has to for analyzing the power of charismatic
understand the human behavior and to be capable of leader are critical theory and post
communication, in order to motivate the lead other modernistic view of power. Charisma has
peoples. The function of management consists of the
capability to influence the behavior of individuals different sources and any attempt to pin it
and groups on their work. Today's global business down to a specific set of human qualities
conditions expressed through strong and relentless would be futile. And charisma is not only
market competition, technological, information and about words, ideals and getting elected. It
communication advances and changing consumer can get things done and it is good for
behavior, are making difficult the market fight of
small and medium enterprises (SMEs). In such business, particularly in the long term. In a
difficult conditions for business operation, tangible current study, we are looking at more than
resources (financial, technological, physical and 100 firms over seven years to see how a
organizational) are increasingly losing their primacy change in the chief executive affects
compared to the invisible (human resources, company performance. We are finding that
innovation, reputation) ones. Among invisible,
human resources are becoming more important for chief executives who have the capacity to
the survival, growth and development of these be charismatic and who have the capacity
enterprises. In order to be a major source of for self-control when it comes to using their
competitive advantage, human resources need to be power have the highest return on assets and
proactively managed. These points out the need for are also more socially and environmentally
a leader with charisma, knowledge, skills and
abilities in order to lead the employees in achieving responsible. Many studies have shown that
the mission, vision and goals of the enterprise. In the ethical orientation of the leader is
this point of view, charismatic leader is one that has strongly related to follower job satisfaction
influence, inspires, motivates and instills confidence and organizational commitment.
among followers. The charismatic leader, thanks to Charismatic leaders who are high on ethical
the characteristics that he possesses and which differ
him from other leaders, is the key factor for the orientation have better workplace
business success of SME. environments with reduced interpersonal
and workplace deviance. This all makes
Keywords: leader, charisma, power, influence, sense because leaders are role models; how
ethics, competitive advantage, small and medium they act cascades through the organization.
enterprises
Charisma can be harnessed not only for
economic ends; it can also be used to do
1. Introduction well and make organizations places where
individuals can flourish. The more
Charismatic leader use power over turbulent the economic situation, the more
followers, but also his/her followers have individuals want to be led by a leader who
power over the leader. So, this relation is can reassure them, give them hope and
interactive by its nature. The ethics of point the bow in the right direction.
charismatic leader is strongly a question of In this case, leader with charisma
how to use power, i.e. how and in what emerges as an imperative for the
manner. The aims and vehicles of leading competitiveness not only for large, but also
are the main objects, when one evaluates for small and medium enterprises. The
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(JPMNT) Journal of Process Management – New Technologies, International
Vol. 3, No.2, 2015.
challenges brought by globalization require 3. Endowment with the gift of divine
better, faster and more efficient response of grace (Bernard M. Bass).
all enterprises in order to preserve and 4. The process of influencing major
enhance their competitive position. In this changes in the attitudes and
regard, the employees, especially the assumptions of organization
leader, have become a key source of members, and building commitment
competitive advantage for enterprises. The for the organization’s objectives
leader with charisma is the person who has (Gary A. Yukl).
the ability to create a strong belief in his 5. Leadership that has a magnetic
own vision among employees According to effect on people (James M. Kouzes
our research, transformational leadership and Barry Z. Posner).
and transactional leadership based on 6. In combination with individualized
awards and praise have a positive impact on consideration, intellectual
the effectiveness of the enterprise, while stimulation, and inspirational
transactional leadership based on leadership, a component of
preventive corrective measures or transformational leadership
interventions after the occurrence of (Bernard M. Bass, cited in Kenneth
deviations have a negative impact, E. Clark and Miriam B. Clark).
especially in small and medium enterprises.
This suggests the need for a gradual
acceptance and implementation of 3. Charismatic leadership and
transformational and charismatic ethical dimensions
leadership to a greater extent by these
enterprises. In such processes between the
leaders and the led ethics and emotions are
important. Applied business ethics, in its
2. Definitions of charisma and traditional form, seeks to "say and define"
what kind of action Good Business Life is.
charismatic leadership A tricky issue is that different ethical
theories state different criteria, and thus
The study of charisma and the difference give different and occasionally
contradictory solutions to ethical problems.
Applied business ethics can be used in the
views of authors have given charisma role of a guardian in evaluating which kind
different definitions. of charismatic leadership is "good" or
1. A certain quality of an individual "bad", or "right" or "wrong", when studying
its effect on the followers and on society as
personality by virtue of which he or a whole. But values are both born socially
she is set apart from ordinary people and they die socially. There is no objective
and treated as endowed with measure for value, and not only one right
supernatural, superhuman, or at way of defining and explaining charisma.
least specifically exceptional Traditional ethical theories are also rational
powers or qualities (sexist language in the sense that they imply cutting off
changed), ( Max Weber). emotions and the so-called irrational
2. A devotion to the specific and elements of the mind, or in general they do
exceptional sanctity, heroism, or not focus on them. But certainly
exemplary character of an charismatic leadership involving
individual person and of the persuasion and rhetoric between the leaders
normative patterns revealed or is emotionally charged. By contextualizing
ordained by that person (Max it is possible to break the guardianship and
Weber).
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(JPMNT) Journal of Process Management – New Technologies, International
Vol. 3, No.2, 2015.
explore ethical issues in the field by others’ behavior to achieve goals in which
showing the multiplicity and complexity in respect their freedom and point of view
real-life occurrences of charismatic entirely. It enables the group (managers/
leadership employees) to work together in the process
Business ethics is a controversial of development and exchange towards the
issue, although it is seen as a vital part of vision of success and sustainability.
everyday business life. The importance of John Kotter, professor of leadership
ethics has usually been justified by at Harvard business school, has produced a
suggesting that most people want to live in key work identifying the relationship
a society in which justice and charity between modern leadership and the need
prevail. Concern for business ethics is also for power. Entitled power and influence,
a matter of practical life when the economic the book asserts that contemporary
system is considered. The economic pressures are responsible for establishing
systems can endure only if they operate in influencing skills as an imperative for those
such a way that the majority of the people involved in leadership. As a result of the
believe that at least some degree of justice increasing complexity of the social milieu
prevails there. If the system lacks surrounding organizations, internal
legitimacy, it is likely to fail. Conger and relationships have become more diverse,
Kanungo (1998, 213) refer to Thomas and also more interdependent.
Aquinas, according to whom the moral This increase in diversity and
goodness of behaviors should be judged on interdependence has converted many
the basis of the objective act itself, the individual contributor and management
subjective motive of the actor, and the jobs into jobs that demand strong leadership
context in which this act is performed. - that is, jobs that require jobholders to get
Applying this to charismatic leadership, things done through others but do not
there are three ethical dimensions: the provide control over all those others
leader's motives, the leader´s influence (Kotter, 1985). These new jobs thus have
strategies, and the leader's character something of a ‘power gap’ that must be
formation. As further analyzed by Kanungo compensated for by the development of
and Mendonca (1996), charismatic advanced skills of influence and
leadership in its positive form is altruistic, persuasion. These skills will help leaders to
influences in empowering ways, guide a varied set of employees, both
emphasizes vision by changing followers' superiors and subordinates, towards desired
core attitudes, beliefs and values, and goals. In order to achieve one’s goals,
manifests needs that are self- leaders should focus on values because
developmental. In negative forms there are values essentially make a leader by
egoistic interests, control strategies, needs representing what one is leading (Kotter,
for personal power, and emphasis on 1985).
compliance behavior and identification Power and leadership are closely
with the leader, that makes the charismatic related: while an individual can wield
leadership unethical (Takala, 2007). power without being a leader, an individual
cannot be a leader without power. Small-
business managers can improve their
leadership skills by understanding the
sources of power and influence.
According to Northhouse (2010),
4. Power versus influence the concept of power is related to leadership
because it is part of the influence process.
Nevertheless, lleadership, in Leadership is a power relationship that
exists between leaders or followers.
general, means the process of ‘influence’ in
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(JPMNT) Journal of Process Management – New Technologies, International
Vol. 3, No.2, 2015.
Further, powner is often defined as the authority. This is the kind of power that
potential ability of one person to influence enables a supervisor to influence
others to carry out ordersor to do something subordinates with the use of rewards and
they otherwise would not have done. Other punishments, allows a manager to issue
definitions stress that power is the ability to orders and expect them to be obeyed. Hard
achieve goals or outcomes that power power includes legitimate, reward, and
holder’s desire. The achievement of desired coercive power, which are defined largely
outcomes is the basis of the definition used by the organization’s policies and
here. Power is the potential ability of one procedures. However, it is important to
person in an organization to influence other remember that position power and
people to bring about desired outcomes. It leadership is not the same thing. Effective
is the potential to influence others within leaders don’t rely solely on the hard power
the organization with the goal of attaining of their formal position to influence others.
desired outcomes for power holders. Soft power includes expert power and
Potential power is realized through the referent power, which are based on personal
processes of politics and influence. characteristics and interpersonal
Hard power is power that stems relationships more than on a position of
largely from a person’s position of authority.
Table 1
Soft and Hard Power
TYPE OF BEHAVIOR SOURCES EXAMPLES
POWER
Soft Attract and coopt Inherent qualities Charisma
Communications Persuasion,
example
Hard Threaten and induce Threats, intimidation. Promotions,
Hire, fire, demote Payment, rewards compensation
Source: Joseph S. Nye, Jr., (2006), Soft Power, Hard Power and Leadership
In this case, influence refers to the some leaders are stronger in one than the
effect a person’s actions have on the other. Balancing hard and soft leadership
attitudes, values, beliefs, or actions of power requires self-awareness in the leader,
others. Whereas power is the capacity to situational awareness and attention to the
cause a change in a person, influence may needs of others and of the organization. Nye
be thought of as the degree of actual identified two main hard power resources -
change. For example, as a child you may coercion and inducement. The tools of
have had the experience of playing a game those hard power resources include hiring,
you didn’t really want to play because one firing, bullying, buying and bargaining.
person in the group influenced others to do Research has shown that a calculated loss
what he or she wanted. Or you may have of temper can be useful at times as it shakes
changed your college major because of the people out of complacency and provides an
influence of someone important in your life, adrenaline rush. Two other skills are closely
or shifted your beliefs about some social related to hard power - organizational
issue based on the influence of political or capacity and political skill.
religious leaders.
Hard and Soft Leadership Power Organizational capacity refers to the
was noted by Joseph S. Nye of Harvard ability to manage the structures and
University. As with all human behavior, reward systems of the organization to
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