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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 
                           18 
                                                                                                 www.japmnt.com 
                                                              (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). 
                                                                                                                                                      19 
                                                                            www.japmnt.com 
                 (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 
                 20 
                                                             www.japmnt.com 
                                               (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 
                                                                                                                21 
                                                         www.japmnt.com 
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...View metadata citation and similar papers at core ac uk brought to you by provided ugd academic repository jpmnt journal of process management new technologies international vol no charismatic leadership power using the charisma for better in enterprises prof krume nikoloski phd faculty economics stip republic macedonia e mail edu mk abstract role leader is work with ethical behavior people through his cooperates order achieve perhaps most suitable positions goals organization that aim he has analyzing understand human be capable are critical theory post communication motivate lead other modernistic peoples function consists capability influence individuals different sources any attempt pin it groups on their today s global business down a specific set qualities conditions expressed strong relentless would futile not only market competition technological information about words ideals getting elected advances changing consumer can get things done good making difficult fight small mediu...

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