Charisma and charismatic leadership in organizations

Abstract

Max Weber coined the concept of charisma in the XIX century by developing it from the Greek 'the gift of grace'. Weberian charismatic authority, alongside traditional authority and legal-rational authority is a sociological construct with broad implications for organizations. This chapter discusses the settings and contexts in which charisma finds itself in organizations and its influence on organizational leadership. By using a narrative literature review, this chapter provides a detailed overview of charisma and charismatic leadership and implications from the perspectives of the classic Weberian sociology and management scholarship. It is argued that charismatic leadership is more effective in organizations operating in chaotic economic and legal environments such as those found in countries transitioning from one form of economy to another. For example, post-Soviet states fall into this category. Second, charismatic leadership impacts organizational decision-making in the companies operating in highly competitive markets and seeking to disrupt the industry. For instance, leaders of tech/media start-ups and media companies such as Elon Musk and Steve Jobs can be described as charismatic. Third, charismatic leadership is found to be impactful in film, art, and media companies not only due to the creative nature of the businesses mentioned above but also because many companies in these fields are project-based. Charisma is a temporary phenomenon, according to Weber. Further studies are proposed to examine the features of charismatic leadership in specific contexts. Given the disruptive nature of work on the global scale, it is argued that more studies into charismatic leadership will shed light on how companies are managed, how leaders' decision-making practices are perceived by employees, and how these practices manifest themselves in different economic and cultural settings.