Leadership Charisma and Modern Organizations

In this blog-post I discuss about the modern leadership and provide my opinion what type of leaders are appreciated in modern organizations.

Leadership can be described as a behavior where a person, called as leader, directs some other person’s or people’s as behavior. Leadership pursues an outcome where one or more people can operate better and more efficient than without leadership guidance. Mary Parker Follett (1868–1933) defined leadership as “the art of getting things done through people”.  The principles of leadership have shifted within time, as there has been a significant increase in human intellectual development as well as the structure of organizations have become more complex which also has required different leadership. Before the industrial revolution and before base foundation of modern day organization, people acquired skills through apprenticeship and so they did not need people to teach them how to plan, organize and control. However, after modern pioneers like Adam Smith, Frederick Taylor and Elton Mayo, the structure and definition of modern day companies has changed. Along with this change, have the theories changed as well. Leaders traditionally were mainly interested in preserving legal status, quality of performance and motivating employees by providing basic intrinsic rewards. However, we are now living in a post-modern era where among the traditionally appreciated attributes, leaders are required to possess charismatic behavior in their leadership methods.

In modern days, charismatic leaders are actually appreciated more than qualified leaders. This might be due to the introduction of public stock markets, the necessity of charismatic and confident leaders is remarkable. Charismatic leaders are capable of providing confidence for stockholders, but also are capable to extract extraordinary performance levels from its staff.  An example of a charismatic leader, could be Steve Jobs, co-founder of Apple whose charisma in product annunciation events was well-known throughout the world. Therefore, each time Apple had a new product annunciation, the company’s stock price always had a significant increase. Furthermore, Steve Jobs was known to be rather eccentrically strict with the employees but was also able to motivate people through his charisma in a way that they often exceeded their expectations. However, there are also certain factors which make charismatic leadership troubling. Majority of the academic literature appear to not yield any support for the positive linkage between charismatic leaders and organizational behavior. In fact, a Harvard Business Review article “The Curse of the Superstar” claims that this misguided view of charismatic leaders are all-powerful is the reason why modern business leaders tenure as CEO is shorter than before.

As my blog-debate proposes, there are many pros and cons for the usage of charismatic leaders. It is clear that the modern society needs them. However, it is important to acknowledge that an organization cannot only rely on charisma, they also need competence. The importance of competence is nowadays even more important than before, as companies grow in size and become more complex as they operate globally as well. Therefore, a leader equipped with a balance of several competence factors is a good leader in a modern day company.

 

https://hbr.org/2002/09/the-curse-of-the-superstar-ceo

Is Modern Society Embracing More Intrinsic Motives Than Extrinsic?

This blog-post aims to address how the modern society addresses motivation, as it used to be driven more by extrinsic motives but now intrinsic rewards are gaining more prominence.

Motivation can be defined as one’s direction to comply with certain behavior which pursues a person’s needs, desires and eventually actions. Motives allow us to pursue certain kind of behavior in which the outcome might satisfy one’s requirements for happiness. Whether it was the action to bring safety for your family or the action to do something altruistic for the society, the original idea for completing these actions are originated from motives. Similarly to our lecture on motivation, I also find it relevant for dividing motivation into two different theories; intrinsic motivation and extrinsic motivation.

I believe that almost every person exhibit both kinds of motivational traits during their lifetime. However, it seems that intrinsic rewards are becoming more trendy as well as consistent and long-lasting for explaining motivational background, i.e. the increasing popularity of exhibitions like Ted Talk. In developed countries, the average income has been increasing, leading to situation where extrinsic rewards are continuously approaching the maximum point in the utility curve, and in place intrinsic rewards are providing more desirable basis for selecting education and careers. Furthermore, as the culture has moved towards a more autonomous one, we are more prone to pursue our own passions and dreams, rather than relying on the pressure obtained from our parents. This further supports of the modern society actually pursuing intrinsic goals (Hagger, Rentzelas and Chatzisarantis (2014). But what does this mean for the rewarding systems in modern jobs?

Wages all over the world are continuously increasing, and thus I believe that extrinsic rewards are reaching their limits when it comes to providing sufficient motives for employees. This phenomenon will bring more emphasis for companies to use intrinsic rewards for motivating employees. This is already seen in companies like Google or Boston Consulting Group; Google allows employees to have a paid day where they are allowed to innovate or pursue their own desired projects, BCG has included a lot of probono opportunities for employees in which they are able to participate in altruistic voluntary work, for instance allowing employees to be involved in projects related to humanitarian work in developing countries. These kinds of companies are the trend setters for future and are constantly being ranked by highly regarded business magazines as the most preferable places to work. However, certain occupations which do not require any sort of education, are low-paying jobs and where one’s marginal productivity is small, might pose a profitability problem for companies. It is interesting to see whether companies operating in industries possessing these attributes will be able to offer employees intrinsic motives as well.

These challenges are becoming very prominent, as the new generation consists of significantly higher proportion of educated people requirements for more sophisticated intrinsic reward systems are becoming higher. With these remarks, future research on efficient intrinsic compensation systems are needed in order to find efficient incentive systems to keep employees motivated.

 

 

Hagger, M. S., Rentzelas, P., & Chatzisarantis, N. L. (2014). Effects of individualist and collectivist group norms and choice on intrinsic motivation. Motivation and Emotion, 38(2), 215-223.