understanding pseudo-transformational leadership in the workplace.

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ETHICS, CHARACTER, AND
AUTHENTIC TRANSFORMATIONAL
LEADERSHIP BEHAVIOR
Bernard M. Bass*
Paul Steidlmeier
Binghamton University
The morality of transformational leadership has been sharply questioned, particularly by libertarians,
“grass roots” theorists, and organizational development consultants. This paper argues that
to be truly transformational, leadership must be grounded in moral foundations. The four components
of authentic transformational leadership (idealized influence, inspirational motivation, intellectual
stimulation, and individualized consideration) are contrasted with their counterfeits in
dissembling pseudo-transformational leadership on the basis of (1) the moral character of the
leaders and their concerns for self and others; (2) the ethical values embedded in the leaders’
vision, articulation, and program, which followers can embrace or reject; and (3) the morality of
the processes of social ethical choices and action in which the leaders and followers engage and
collectively pursue.
The literature on transformational leadership is linked to the long-standing literature on virtue
and moral character, as exemplified by Socratic and Confucian typologies. It is related as well
to the major themes of the modern Western ethical agenda: liberty, utility, and distributive justice
Deception, sophistry, and pretense are examined alongside issues of transcendence, agency, trust,
striving for congruence in values, cooperative action, power, persuasion, and corporate governance
to establish the strategic and moral foundations of authentic transformational leadership.
ETHICS, CHARACTER AND AUTHENTIC
TRANSFORMATIONAL LEADERSHIP
Are Bill Gates and Lou Gerstner transformational leaders? What about “chainsaw”
Al Dunlap? For many moral analysts, leadership is a many-headed hydra that
alternately shows the faces of Saddam Hussein and Pol Pot as well as those of
Nelson Mandela and Mother Theresa. The stories that recount the accomplishments
* Direct all correspondence to: Bernard M. Bass, Binghamton University, Binghamton, NY 13902–6015;
email: [email protected].
Leadership Quarterly, 10(2), 181–217.
Copyright Ó 1999 by Elsevier Science Inc.
All rights of reproduction in any form reserved.
ISSN: 1048-9843
182 LEADERSHIP QUARTERLY Vol. 10 No. 2 1999
of such leaders raise moral questions concerning both the character of the leaders
as well as the legitimacy of their programs.
Following Rogers and Farson (1955), Conger and Kanungo (1988, ch. 11) worried
that charismatic leadership (which they defined similarly to transformational leadership)
of self-serving leaders could result in deception and exploitation of followers,
but argued that most leaders pursued both personal and organizational interests.
Subsequently, Conger and Kanungo (1998, ch. 7) reviewed the dark side of charismatic
leaders: narcissicism, authoritarianism, Machiavellianism, flawed vision, a
need for power coupled with lack of activity inhibition and promotion among
followers of dependency, personal identification, and lack of internalization of
values and beliefs. In this article, we attempt to differentiate such leaders from
authentic charismatic and transformational leaders in terms of ethical discussions
of character and authenticity as well as the major themes of the modern Western
ethical agenda: liberty, utility, and (distributive) justice.
The ethics of leadership rests upon three pillars: (1) the moral character of the
leader; (2) the ethical legitimacy of the values embedded in the leaders vision,
articulation, and program which followers either embrace or reject; and (3) the
morality of the processes of social ethical choice and action that leaders and followers
engage in and collectively pursue. Such ethical characteristics of leadership have
been widely acknowledged (Wren, 1998; Kouzes & Posner,1993; Greenleaf, 1977;
Conger & Kanungo, 1998). Transformational leaders set examples to be emulated
by their followers. And as suggested by Burns (1978) and demonstrated by Dukerich,
Nichols, and associates (1990) when leaders are more morally mature, those they
lead display higher moral reasoning. But not all leadership fits the same pattern and
ethical analysis shifts with varying leadership modalities. Two forms of leadership
behavior, transactional and transformational, and their components will be analyzed
here in terms of moral issues.
COMPONENTS OF LEADERSHIP AND RELATED MORAL ISSUES
Moral discourse is normative; it is captured in our language of right/wrong, good/
bad, should/ought, good/evil. While meta-ethical discourse is concerned with a
critical analysis of the foundations of moral judgments—the worldview and ontological
rationale that confers legitimacy upon a set of normative criteria and values—
practical ethical discourse is primarily focused upon two issues (Table 1): analysis
of the moral agent and analysis of types of moral action.
A moral agent is evaluated as praiseworthy or blameworthy in light of three
primary considerations: his or her (1) developmental level of conscience; (2) degree
of effective freedom; and (3) probity of intention. A moral act is evaluated as a
type of behavior no matter who the agent may be. Behavior such as taking property
or breaking a promise is judged to be right or wrong in light three principal components:
(1) the end sought; (2) the means employed; and (3) the consequences.
The pivotal issue in making moral judgments is the legitimacy of the grounding
worldview and beliefs that grounds a set of moral values and criteria. Depending
upon such worldview and beliefs, a religious leader may morally justify a holy war
and a Marxist may justify class warfare and dictatorship of the proletariat. As a
Transformational Leadership Behavior 183
Table 1. Components of Moral Analysis
Moral Agent
Conscience Stage of values development, mediated by personal,
familial, social, spiritual and cultural factors
(Kohlberg, 1981); moral theories of conscientious
objection
Degree of Freedom Responsibility mitigated by factors such as compulsion
or coercion; moral theories of existential freedom
vs determinism
Intention The agent’s goal and anticipated outcomes; moral
theories of maleficence and beneficence and
egoism vs altruism
Moral Action
Ends sought Nobility of purpose of the action and whether it is
aligned with core transcendental values, whether
religious, philosophical, cultural
Means employed Whether the end justifies the means
Consequences Whether the benefits and burdens of an action are
fairly distributed among those affected
result, moral analysis always exhibits a two-fold nature, which combines (1) the
radical critique of underlying worldviews and grounds of moral legitimation and
(2) practical judgments of praiseworthy or blameworthy agents and right and wrong
behavior within a concrete socio-cultural and historical milieu, as well as within
the limitations of socio-historical conscience and freedom. Ethical analysis is further
complicated by the fact that it applies not only to content (taking another’s property
is wrong; telling the truth is good) but to processes (especially those that affect the
freedom and conscience of participants)
Ethical content focuses upon values, which highlight the issue of standards and
criteria of ethical behavior. While cultural relativities surely apply, foundational
moral discourse rests upon polarities found in both moral intention (egoism versus
altruism) and in moral consequences (benefits and costs for self and others). Kanungo
and Mendonca (1996, ch. 3) argue persuasively for the centrality of altruism,
where everyone has moral standing and the interests of “the other” matter. Indeed,
something like the Western human rights tradition, which has grown out of the
defense of the dignity of the individual, mandates a minimal degree of altruism by
safeguarding inalienable human rights not just of self but of all others, even in the
face of majority social choices.
The morality of processes reflect the legitimacy of both influence processes on
the part of leaders and empowerment processes on the part of followers as they
engage in dynamic self-transformation (Kanungo&Mendonca, 1996, ch. 4). Modern
Western ethics has been preoccupied with moral processes, especially the relationship
between the individual, collectivities, (including families, states, business enterprises,
religions and other socio-cultural organizations) and society as a whole. Its
major themes of liberty, utility and distributive justice attempt to specify what
individuals owe each other, what individuals owe to the group and what groups
owe to individuals.
184 LEADERSHIP QUARTERLY Vol. 10 No. 2 1999
The moral analysis of leadership contains all of these dynamics. It provides
critique of both agents and actions. This makes it challenging to morally evaluate
charismatic leaders such as the Ayotollah Khomeini or Mao Zedong in realms of
religion and politics, and Andrew Carnegie or Steve Jobs in the marketplace. There
are clearly many leadership issues and styles that relate to questions ranging from
the legitimacy of their authority and informed consent by followers to conscience,
freedom and intention, and to ends, means and consequences.
There are two distinct but interrelated ideal types of leadership: transactional
and transformational. In what follows we first clarify these concepts and then discuss
ethical problems related with each. We conclude with an examination of Bass’s
proposition (1998a), which is consistent with Burns (1978), that authentic transformational
leadership must rest on a moral foundation of legitimate values. The
opposite is inauthentic or pseudo-transformational leadership, that of leaders who
consciously or unconsciously act in bad faith (Sartre, 1992).
Transformational and Transactional Leadership
Transactional leadership involves contingent reinforcement. Followers are motivated
by the leaders’ promises, praise, and rewards, or they are corrected by negative
feedback, reproof, threats, or disciplinary actions. The leaders react to whether the
followers carry out what the leaders and followers have “transacted” to do. In
contingent rewarding behavior leaders either make assignments or they may consult
with followers about what is to be done in exchange for implicit or explicit rewards
and the desired allocation of resources. When leaders engage in active managementby-
exception, they monitor follower performance and correct followers’ mistakes.
When leaders engage in passive management-by-exception, they wait passively for
followers’ mistakes to be called to their attention before taking corrective action
with negative feedback or reprimands. Laissez-faire leaders avoid leading.
Transformational leadership contains four components: charisma or idealized
influence (attributed or behavioral), inspirational motivation, intellectual stimulation,
and individualized consideration (Bass, 1985, 1998; Bass & Avolio, 1993). Followers
identify with the charismatic leaders’ aspirations and want to emulate the leaders.
Shamir, House, and Arthur (1993), Conger and Kanungo (l988, 1998), Kanungo
and Mendonca (1996) conceive of the same components as all falling under the
category of charismatic leadership.
For the purposes of discussion, we will speak of transformational and transactional
leaders when, in fact, most leaders have a profile of the full range of leadership
that includes both transformational and transactional factors. However, those whom
we call transformational do much more of the transformational than the transactional.
In their defining moments, they are transformational. Those whom we label
as transactional leaders display much more transactional leadership behavior. They
are more likely to have attitudes, beliefs, and values more consistent with transactional
leadership, but they still may be likely to be transformational at times.
Each component of either transactional or transformational leadership has an
ethical dimension. It is the behavior of leaders—including their moral character,
values and programs—that is authentic or inauthentic. Most leaders are likely to
Transformational Leadership Behavior 185
Table 2. Leading Moral Components of Transactional and
Transformational Leadership
Transactional Leadership
Leadership Dynamic Ethical Concern
Task Whether what is being done (the end) and the
means employed to do it are morally legitimate
Reward system Whether sanctions or incentives impair effective
freedom and respect conscience
Intentions Truth telling
Trust Promise keeping
Consequences Egoism vs altruism—whether the legitimate moral
standing and interests of all those affected are
respected
Due process Impartial process of settling conflicts and claims
Transformational Leadership
Idealized influence Whether “puffery” and egoism on part of the leader
predominate and whether s/he is manipulative
or not
Inspirational motivation Whether providing for true empowerment and selfactualization
of followers or not
Intellectual stimulation Whether the leader’s program is open to dynamic
transcendence and spirituality or is closed
propaganda and a “line” to follow
Individualized Whether followers are treated as ends or means,
consideration whether their unique dignity and interests are
respected or not.
display a mixed moral profile; so, when we speak of authentic transformational
leaders or authentic transactional leaders, we are labeling leaders who generally
are more authentic than inauthentic.
Ethical Issues in Transactional Leadership
Both styles of leadership, transformational and transactional, have strong philosophical
underpinnings and ethical components (Table 2). In individualist philosophies,
where leaders and followers each rationally pursue their own self-interests,
it is generally thought that leaders should be transactional. A free contract is often
assumed as a model of transacting between leaders and followers. A contract has
to have moral legitimacy (Donaldson & Dunfee, 1994). The moral legitimacy of
transactional leadership is demanding in many ways. It depends on granting the
same liberty and opportunity to others that one claims for oneself, on telling the
truth, keeping promises, distributing to each what is due, and employing valid
incentives or sanctions. It recognizes pluralism of values and diversity of motivations
(Rawls, 1971).
Ethical Issues in Transformational Leadership
Transactional leadership models are grounded in a worldview of self-interest.
But the exclusive pursuit of self-interest is found wanting by most ethicists (Gini,
186 LEADERSHIP QUARTERLY Vol. 10 No. 2 1999
1995, 1996; Rosenthal & Buchholz, 1995). Authentic transformational leadership
provides a more reasonable and realistic concept of self—a self that is connected
to friends, family, and community whose welfare may be more important to oneself
than one’s own. One’s moral obligations to them are grounded in a broader conception
of individuals within community and related social norms and cultural beliefs.
Although there is plenty of transactional leadership in punishments for transgressions,
authentic transformational leadership is more consistent than transactional
leadership with Judaic-Christian philosophical traditions and discourses on the
leadership of the moral sage that presuppose a trusting community as the central
life context. Nonetheless, it is a matter of modern Western moral concern that
ideals not be imposed, that behavior not be coerced, and that the search for truth
not be stifled. Ethical norms and behavioral ideals should not be imposed but freely
embraced. Motivation should not be reduced to coercion but grow out of authentic
inner commitment. Questioning and creativity should be encouraged. Followers
should not be mere means to self-satisfying ends for the leader but should be
treated as ends in themselves. We label as inauthentic or “pseudo” that kind of
transformational leadership that tramples upon those concerns.
Burns (1978) discussed leadership as transforming, and, on occasion, as transformational.
Both the leader and the led are transformed—sharply changed in performance
and outlook. But transforming others is just one of the effects of the leadership.
Wealso need to examine the behaviors of authentic transformational leadership
and the attributions given to transformational leadership on a moral basis; that is,
the processes of vision articulation and choice are matters of moral concern, not
just the consequences. It is the presence or absence of such a moral foundation of
the leader as a moral agent that grounds the distinction between authentic versus
pseudo-transformational leadership.
Burns (1978), Bass (1985) and Howell and Avolio (1992), among others, have
examined the morality of transformational leadership. For Burns, to be transformational,
the leader had to be morally uplifting. For Bass, in his early work, transformational
leaders could be virtuous or villainous depending on their values. Howell
and Avolio felt that only socialized leaders concerned for the common good can
be truly transformational leaders. Personalized leaders, primarily concerned with
their own self-interests, could not be truly transformational leaders. Publicly, hoever,
and at a distance, they could act as if they were truly transformational although
privately they were more concerned about themselves. O’Connor, Mumford, and
colleagues (1995) showed how such inauthenticity in transformational world class
leaders could result in destructive outcomes.
Critics attribute manipulative, deceptive and other such devious behaviors to socalled
transformational leaders. Martin and Sims (1956) and Bailey (1988) hold
that to succeed, all leaders must be manipulative. But, in fact, it is pseudo-transformational
leaders who are deceptive and manipulative. Authentic transformational
leaders may have to be manipulative at times for what they judge to be the common
good, but manipulation is a frequent practice of pseudo-transformational leaders
and an infrequent practice of authentic transformational leaders. We contrast authentic
and pseudo-transformational leadership in terms of the four components
Transformational Leadership Behavior 187
of transformational leadership already mentioned: idealized influence (or charisma),
inspirational motivation, intellectual stimulation and individualized consideration.
Idealized Influence
If the leadership is transformational, its charisma or idealized influence is envisioning,
confident, and sets high standards for emulation. Recent literature underscores
the spiritual dimensions of such influence (Fairholm, 1998, part V; Kanungo&
Mendonca, 1996, pp. 87ff.) as well as the moral dimensions of the influence process
itself (Kanungo & Mendonca, 1996, pp. 52–56).
A first difference between authentic transformational leadership and pseudotransformational
leadership lies in the values for which they are idealized. For
instance, the authentic leader calls for universal brotherhood; the pseudo-transformational
leader highlights fictitious “we-they” differences in values and argues that
“we” have inherently good values and “they” do not. Bass (1985, pp. 182–5) summed
up the importance of the values held by a transformational leader in determining
his or her actions. The observed behavior might seem the same, but according to
Burns (1978), only if the underlying values were morally uplifting, could the leader
be considered transforming. Bass originally argued that transformational leaders
could wear the black hats of villains or the white hats of heroes depending on
their values. This is mistaken; only those who wear white hats are seen as truly
transformational. Those in black hats are now seen as pseudo-transformational.
That is, while they may be transformational, they are inauthentic as transformational
leaders. They are the false messiahs and tyrants of history.
Pseudo-transformational idealized leaders seek power and position even at the
expense of their followers’ achievements. They indulge in fantasies of power and
success. They may argue that they are doing so for the good of the organization.
Like charismatics, in general, they feel that they honestly know the right answers
to problems which need to be sold through effective impression management.
Sometimes, they even deceive themselves about their competencies. They exhort
their followers to “Trust me!”—but they cannot be trusted. They engage in more
self-displays to get more attention from their followers Their visions are grandiose.
They do not have the same sense of responsibility as do authentic charismaticinspirational
leaders.
Pseudo-transformational idealized leaders may see themselves as honest and
straightforward and supportive of their organization’s mission but their behavior
is inconsistent and unreliable. They have an outer shell of authenticity but an inner
self that is false to the organization’s purposes. They profess strong attachment to
their organization and its people but privately are ready to sacrifice them. Inauthentic
CEOs downsize their organization, increase their own compensation, and weep
crocodile tears for the employees who have lost their jobs.
In addition to what has already been said, Howell and Avolio (1992) point to
the need of authentic transformational leaders to promote ethical policies, procedures
and processes within their organizations. They need to be committed to a
clearly stated, continually-enforced code of ethical conduct which helps establish
acceptable standards. They need to foster an organizational culture with high ethical
188 LEADERSHIP QUARTERLY Vol. 10 No. 2 1999
standards by appropriate recruitment, training and rewards to eventuate in the
internalization in all the organization’s members of shared moral standards.
Inspirational Motivation
The inspirational motivation of transformational leadership provides followers
with challenges and meaning for engaging in shared goals and undertakings. The
inspirational appeals of the authentic transformational leader tend to focus on the
best in people—on harmony, charity and good works; the inspirational appeals of
the pseudo-transformational leader tend to focus on the worst in people—on demonic
plots, conspiracies, unreal dangers, excuses, and insecurities. Kanungo and
Mendonca (1996 pp. 61ff) have linked this to an empowerment process. For them,
empowerment is more than broadening the scope of participation by followers. It
is motivational and enabling, highlighting a new realization and transformation of
the person.
Idealized, inspirational leaders, who are pseudo-transformational, may mislead,
deceive and prevaricate. They can be subtle and speak with a forked tongue, for
instance, offering followers empowerment, yet continuing to treat them as dependent
children (Sankowsky, 1995). They talk about empowerment but actually continue
to seek control (Conger&Kanungo, 1998). Previously, Bass (1985) mistakenly
argued that, although the dynamics might be the same if the leaders had virtuous
or evil ends, the moral differences were a matter of their aims and values, not the
dynamics involved in their influence. But both the dynamics and means-to-ends as
well as the ends are different for authentic and inauthentic transformational leaders.
The authentic are inwardly and outwardly concerned about the good that can be
achieved for the group, organization, or society for which they feel responsible.
The inauthentic and pseudo-transformational may publicly give the same impression
and be idealized by their followers for it, but privately be concerned about the
good they can achieve for themselves. They are captains who sail under false colors.
They are spiritual leaders who are false prophets.
Intellectual Stimulation
The intellectual stimulation of transformational leadership incorporates an open
architecture dynamic into processes of situation evaluation, vision formulation and
patterns of implementation. Such openness has a transcendent and spiritual dimension
and helps followers to question assumptions and to generate more creative
solutions to problems. It is especially suited to the normative side of ethics, where
human probing of the ground of being is both fathomless and endless. To the point,
this dynamic breaks the bonds of organizational and leadership cultures that ignore
fundamental questions such as altruism (Kanungo and Mendonca, 1996, pp. 79ff).
The intellectual stimulation of pseudo-transformational leaders manifests a logic
containing false assumptions to slay the dragons of uncertainty. Pseudo-transformational
leaders overweight authority and underweight reason. They take credit for
others’ ideas but make them scapegoats for failure (Sankowsky, 1995). They substitute
anecdotes for hard evidence. They feed on the ignorance of their followers so
that their followers will accept more ambiguities and inconsistencies opening the
opportunities for the self-enhancement of charlatans:
Transformational Leadership Behavior 189
People like Rush Limbaugh and Louis Farrakhan live well off ignorance. . . .
They are smart, ambitious men with great charisma, who look like giants to
people of minor intellect. They are snake oil salesmen. They are confidence
men who exploit . . . ignorant, scared, angry, frustrated people for personal
gain in the name of doing good for the entire nation or race (Lockman, 1995,
p. 9a).
Authentic transformational leaders persuade others on the merits of the issues.
Pseudo-transformational leaders set and control agenda to manipulate the values
of importance to followers often at the expense of others or even harm to them.
Authentic transformational leaders openly bring about changes in followers’ values
by the merit and relevancy of the leader’s ideas and mission to their followers’
ultimate benefit and satisfaction (Howell, 1988). Pseudo-transformational leaders
may create the impression that they are doing the right things, but will secretly fail
to do so when doing the right things conflict with their own narcissistic interests.
They are less likely to listen to conflicting views and more likely to be intolerant
of the differences of opinion between their followers and themselves (Howell &
Avolio, 1992). They substitute emotional argumentation for rational discourse.
Individualized Consideration
The individualized consideration component of transformational leadership underscores
the necessity of altruism if leadership is to be anything more than authoritarian
control (Kanungo & Mendonca, 1996, pp. 85ff). The transformational leader
treats each follower as an individual and provides coaching, mentoring and growth
opportunities (Bass, 1985). While true transformational leaders are concerned about
developing their followers into leaders, pseudo-transformational leaders are more
concerned about maintaining the dependence of their followers. They exploit the
feelings of their followers to maintain deference from them (Sankowsky, 1995).
Pseudo-transformational leaders will welcome and expect blind obedience. They
will attempt to enhance their personal status by maintaining the personal distance
between themselves and their followers. They encourage fantasy and magic in their
vision of the attractive future while true transformational leaders promote attainable
shared goals. Narcissistic pseudo-transformational leaders manipulate arguments
about political choices with a “twist that achieves the desired responses” (Bass, l989,
p.45). Their style of individualized consideration foments favoritism and competition
among followers in the guise of being helpful. While the authentic individually
considerate leader is concerned about helping followers to become more competent
to provide for a more successful succession, the inauthentic counterpart seeks to
maintain a parent-child relationship.
The difference between authentic and pseudo-transformational leadership is also
seen in that authentic transformational leaders, who may have just as much need for
power as pseudo-transformational leaders, channel the need in socially constructive
ways into the service of others. Pseudo-transformational leaders use power primarily
for self-aggrandizement and are actually contemptuous privately of those they are
supposed to be serving as leaders (Howell and Avolio, 1992). Although this may
not be expressed publicly, privately pseudo-transformational leaders are concerned
190 LEADERSHIP QUARTERLY Vol. 10 No. 2 1999
about their power and gaining more of it. Insiders who work closely with them
know them to be deceptive, domineering, egotistical demagogues while their public
image may be that of saviors. Pseudo-transformational leaders are predisposed
toward self-serving biases. They claim they are right and good; others are wrong
and bad. They are the reason things go well; other persons are the reason for things
going badly. They wear different masks for different occasions, believe themselves
to be high in self-monitoring but are betrayed by their non-verbal contradictory
behavior.
The Moral Spectrum of Transformational Leadership
Transformational leadership traces out a complicated moral spectrum, in which
most leaders combine authentic as well as inauthentic behavior. For example, many
leaders, particularly political leaders who cannot move too far in front of their
followers, walk a fine line of moral probity. In their efforts to accent the positive,
to make inspiring appeals, to maintain the enthusiasm and morale of followers,
they are inauthentic in transformational leadership. They withhold the release of
information. Or they time its release for when it will do the most good. They give
the appearance of confidence even when they are unsure about what they are doing
and what they are telling followers to do. They initiate projects which they personally
oppose and delay implementing them so that the projects never are completed.
They publicly support but privately oppose proposals. They openly compromise
but privately divert the implementation of the compromise (Martin & Sims, 1956;
Bass, 1968). They may have the public image of a saint but privately are deceptive
devils. They may appear to their followers to behave as a transformational leader
but the appearance is deceptive for inwardly they remain more interested in themselves
than their followers. They knowingly focus their followers on fantasies instead
of attainable visions. They engage in shams and pretense. They don’t practice what
they preach. And these masquarades are at the expense of their followers. They
are pseudo-transformational. They are Freud’s (1913) totemic leaders who satisfy
the fantasies of their followers although they appear to direct their followers towards
transcendental purposes, but in fact tend to cater to the self-delusionary interests
of their followers.
In short, while authentic and inauthentic transformational leaders may fail to
exhibit any one of the four components—idealized influence, inspirational motivation,
intellectual stimulation or individualized consideration—the component that
ordinarily is missing in the personalized leadership of the pseudo-transformational
leader is individualized consideration. Thus, many intellectually stimulating, inspirational
leaders such as Hyman Rickover, who transformed the U.S. Navy into the
nuclear age, were known for their self-aggrandizing, inconsiderate, abusive and
abrasive behavior (Polmar&Allen, 1982). Furthermore, instead of earning idealized
influence from their followers, the pseudo-transformational leaders seek to become
the idols (rather than the ideals) of their followers (Howell & Avolio, 1992). The
ethics of transformational leadership are subverted by the pseudo-transformational
leader’s contempt for self and others, by learning to rationalize and justify their
deceptions, and by their feelings of superiority. They see themselves as having
Transformational Leadership Behavior 191
an unconventional but higher morality (Goldberg, 1995). Nevertheless, they are
mistaken. O’Connor, Mumford, and associates. (1995) contrasted the biographies
of 82 world class personalized and socialized charismatic leaders. The socialized
charismatics were rated more highly in their morality than were the personalized,
especially as they behaved during their rise to power.
Leaders are authentically transformational when they increase awareness of
what is right, good, important, and beautiful, when they help to elevate followers’
needs for achievement and self-actualization, when they foster in followers
higher moral maturity, and when they move followers to go beyond their
self-interests for the good of their group, organization, or society. Pseudotransformational
leaders may also motivate and transform their followers,
but, in doing so, they arouse support for special interests at the expense of
others rather than what’s good for the collectivity. They will foster psychodynamic
identification, projection, fantasy, and rationalization as substitutes for
achievement and actualization. They will encourage ‘we-they’ competitiveness
and the pursuit of the leaders’ own self-interests instead of the common good.
They are more likely to foment envy, greed, hate, and conflict rather than
altruism, harmony, and cooperation. In making this distinction between the
authentic transformational and pseudo-transformational leader, it should be
clear that we are describing two ideal types. Most leaders are neither completely
saints nor completely sinners. They are neither completely selfless nor
completely selfish (Bass, 1998a, p. 171).
For example, in an election campaign, the authentic transformational leader
points the public to the societal problems he truly believes need solving. The
inauthentic transformational leader points to the same issues but is personally
uninterested in doing something about them. In an election campaign, the authentic
transactional leader makes promises he thinks he can keep, if elected. But he or
she may be overly optimistic and be unable to keep the promises. An inauthentic
transactional leader knows he is making promises he cannot keep, if elected.
If transformational leadership is authentic and true to self and others, it is characterized
by high moral and ethical standards in each of the dimensions discussed
above. At the same time it aims to develop the leader as a moral person and creates
a moral environment for the organization. In Fairholm’s terms (1998) it is at once
a type of leadership grounded in values, based in trust and rooted in spirituality.
As an ideal moral type, authentic transformational leadership contrasts sharply with
what we term its pseudo or unethical manifestations as well as with conventional
transactional leadership.
The best of leadership is both transformational and transactional. Transformational
leadership augments the effectiveness of transactional leadership; it does not
replace transactional leadership. (Waldman, Bass, & Yammarino, 1990; Kanungo &
Mendonca, 1996, pp. 53ff.). Take the example of Abraham Lincoln. He made many
transactional executive decisions based on his own sense of timing and political
expediency such as delaying the Emancipation Proclamation until after the first
Union victory at Antietem in 1862. Even then, to hold the slave states of Delaware,
192 LEADERSHIP QUARTERLY Vol. 10 No. 2 1999
Maryland, Kentucky and Missouri in the Union, the Proclamation only prohibited
slavery in those 11 states that had seceded. As an authentic transformational leader,
his sense of duty and what he personally thought was right, good and proper,
propelled him into executive decisions unapproved by Congress and unsupported
by public opinion. He suspended Habeas Corpus in 1862 when Washington, D.C.
was almost surrounded by rebel troops. Nevertheless, by his second inauguration
in 1864, he was espousing a generous, forgiving peace settlement “with malice
towards none.”
While transactional leadership manages outcomes and aims for behavioral compliance
independent of the ideals a follower may happen to have, transformational
leadership is predicated upon the inner dynamics of a freely embraced change of
heart in the realm of core values and motivation, upon open-ended intellectual
stimulation and a commitment to treating people as ends not mere means. To bring
about change, authentic transformational leadership fosters the modal values of
honesty, loyalty, and fairness, as well as the end values of justice, equality, and
human rights. But pseudo-transformational leadership endorses perverse modal
values such as favoritism, victimization, and special interests and end values such
as racial superiority, submission, and Social Darwinism (Carey, 1992; Solomon,
1996). It can invent fictitious obstacles, imaginary enemies, and visions that are
chimeras.
Transactional leadership is moral when the truth is told, promises are kept,
negotiations are fair and choices are free (Hollander, 1995). It is immoral when
information harmful to followers is deliberately concealed from them, when bribes
are proffered, when nepotism is practiced, and when authority is abused.
Ethical Criticisms of Transformational Leadership
The concepts of leadership we endorse represent ideal types where transactional
leadership rests upon transformational foundations and transformational leadership
is enlivened and guided by an inner ethical core. Nonetheless, its ethics have
been questioned despite the fact that transformational leadership was conceived
as leadership which involved moral maturity (Kuhnert & Lewis, 1987) and the
moral uplifting of followers (Burns, 1978).
Meta-analytical evidence supports the generalizeable findings that transformational
leadership is more effective, productive, innovative, and satisfying to followers
than is transactional leadership (Lowe, Kroeck & Sivasubrahmaniam, 1996). People’s
implicit theories of leadership are likely to be more transformational than
transactional (Avolio & Bass, 1991) However, its ethics have been questioned. It
has been suggested that transformational leadership: (1) lends itself to amoral
puffery since it makes use of impression management (e.g., Snyder, 1987); (2)
manipulates followers along a primrose path on which they lose more than they
gain (e.g., White & Wooten, 1986); (3) encourages followers to go beyond their
own self-interests for the good of the organization and even emotionally engages
followers irrationally in pursuits of evil ends contrary to the followers’ best interests
(e.g., Stevens, D’Intino,&Victor, 1995); (4) is antithetical to organizational learning
and development involving shared leadership, equality, consensus and participative
Transformational Leadership Behavior 193
decision-making (e.g., McKendall, 1993); (5) lacks the checks and balances of countervailing
interests, influences and power to avoid dictatorship and oppression of
a minority by a majority (e.g., Keeley, 1995); and (6) the distinction between
authentic and pseudo transformational leadership is not applicable across cultures.
Although the criticisms overlap, we analyze them in terms of four broad frameworks:
a) traditional ethics of moral character and virtue as found in Socratic and
Confucian traditions (criticism 1 above); b) the modern Western ethical agenda of
individual liberty, utilitarian social choice, and distributive justice (criticisms 2, 3
and 4 above); c) providing for a balance of power and “due process” in anticipation
of the breakdown in practice of ideal types of leadership and ethics (criticism 5
above); and d) authentic transformational leadership and cultural factors (criticism
6 above).
MORAL CHARACTER, VIRTUE, AND
TRANSFORMATIONAL LEADERSHIP
In leadership, character matters. This is not to deny that evil people can bring about
good things or that good people can lead the way to moral ruin. Rather, leadership
provides a moral compass and, over the long term, both personal development and
the common good are best served by a moral compass that reads true. In this
section we draw some lessons from the traditions of the moral sage and social
prophet which have enjoyed prominence in a wide variety of cultures. Whether
visionary or ascetic, the sage and prophet have also widely been perceived as agents
of change, as well as people to be emulated and as leaders of others, not followers.
To be sure, moral leadership is not to be confused with occupying official positions
of authority. In fact, the sage and prophet often held no official office and inveighed
against the moral corruption of the “principalities and powers.”
An approach to ethics based upon moral character and virtue enjoys an extraordinarily
broad cross-cultural base in terms of the “framing narratives” that guide
ethical discourse in cultural settings as diverse as Western and Confucian traditions.
From Plato’s “philosopher king” to the virtuous Confucian minister of the State,
the “moral sage” and the “superior person” are portrayed as both a font of wisdom
and the embodiment of virtue, whose very presence and being brings about personal
and social transformations.
The moral development of the leader embraces individual, familial and spiritual
dynamics of personality (Kanungo & Mendonca, 1996, pp. 59, 87ff., 98ff.; Fairholm,
1997, part V). The spiritual dimension underscores not only virtuous behavior but
an attitude of openness to the transcendent meaning of human existence. Moral
beliefs concerning a leader’s character are reliably associated with conventional
morality as assessed by Bass (1956) include: being humble, being virtuous, obeying
the dictates of one’s conscience, maintaining old friendships and forming new ones,
being loyal, generous and forgiving, helping others, conforming to custom, and
maintaining good faith.
In what follows we recall the traditions of the ethics of virtue that undergird
both Western and Confucian traditions. We confine ourselves to Plato’s Apology
(Tredennick, 1969) and the Confucian Analects (Xin, 1994). In doing so, we are
194 LEADERSHIP QUARTERLY Vol. 10 No. 2 1999
well aware of the limitations of both Socratic and Confucian thought for the contemporary
world in terms of worldview, social hierarchy and immobility, views of the
human person, ideals of truth and so forth (Whitehead, 1933; deBary, 1991b). Yet,
borrowing from Whitehead that all Western philosophy is but a footnote to Plato,
both Socrates and Confucius imparted root metaphors and framing narratives of
the moral person as a transforming person that have guided philosophical discourse
ever since, both in the West and in the East.
The Virtuous Person as Transformational
Although there are many diverse elements of Chinese moral tradition that are
frequently at odds with each other, there does seem to be some general agreement
that among other things, the moral life rests upon foundations of individual virtue
and that the individually virtuous person transforms others as well as the social
environment (Schwartz, 1985; Lin, Rosemont, & Ames, 1995).
Both Socrates and Confucius have come to epitomize leaders with authentic
idealized influence. There is no doubt that over the centuries they have taken on
heroic dimensions. Their framing narratives underscore a fundamental dynamic of
leadership. Each proposed to his followers the highest ethical standards which they
themselves implemented in their own lives. More important, in terms of authenticity,
each was recognized as a sage and leader by others, not by self-proclamation.
Historically, the central focus of ethical concern in Chinese traditions manifests
a right ordering of personal relationships. Epitomized in Confucius’ “five relations,”
(Taylor & Arbuckle, 1995; Tu, 1985, ch. 3). Chinese ethics emphasizes personal
virtue and specify proper conduct in family, kinship, and friendship relations, as
well as among social equals and between superiors and subordinates in sociopolitical
organizations and institutions. The social and political order has always
been seen as a moral issue and it plays a critical role in realizing humanity’s ethical
destiny (Schwarz, 1985, p. 52; deBary, 1991a). The virtue of ren (human-heartedness,
benevolence, love) and the virtue of yi (righteousness) are the grounding virtues
of the moral life. They express the way (dao) that one existentially embraces. Ren
is the lodestar that permeates every action of the superior person.
The moral person in each tradition would sacrifice anything for the sake of
virtue. For example, the Confucian moral tradition is strikingly clear about the
relation of profits to moral virtue. From the Analects one reads:
Confucius said, “Wealth and honor are what every person desires. But if they
have been obtained in violation of moral principles, they must not be kept.
Poverty and humble station are what every person dislikes. But if they can
be avoided only in violation of moral principles, they must not be avoided.
If a superior person departs from humanity (ren), how can s/he fulfill that
name? A superior person never abandons ren, even for the lapse of a single
meal. In moments of haste, one acts according to it. In times of difficulty or
confusion, one acts according to it” (Analects, 4.5).
In Socratic terms, one finds a striking similarity: the moral person does not “put
money or anything else before virtue” (Apology, 42A).
Transformational Leadership Behavior 195
Both Socrates and Confucius base their approach upon authentic inspirational
motivation. Each proposes a transcendent vision of fulfillment, justice, and peace
based upon the right ordering of relationships. Each is transcendent and grasps the
“beyond in our midst,” a better future. Each transforms by invitation, not by
coercion. Each manifests consistency between word and deed.
The inspiration is simple: virtue is its own reward. The basic scenario of the
moral sage in each tradition emphasizes virtue and moral character. In the days
leading up to his condemnation to death, Socrates was taken up with a single
question: how to be excellent at being human? He sharply criticized the pseudotransformational
sophists—the purveyors of false wisdom—because they did not
know themselves; even worse, they abandoned fidelity to the way of truth. While
pretending to be wise, they were foolish. The Socratic enterprise is grounded in a
relentless pursuit of the truth, in the development of wisdom and the cultivation
of virtue. Indeed, Socrates himself transformed others precisely because of his
fearless commitment to virtue.
For Confucius, the moral sage (shengren) is the key person in bringing about
personal righteousness and social justice. A superior person (jyundz) is a moral
person, who walks the moral way and attempts to practice virtue through selfcultivation.
Both the sage and the superior person live under the restraint of virtue
and aim to transform society accordingly. A superior person is perforce a moral
leader (Analects, 17:3). The common, inferior or small person (xiaoren) either does
not know or does not follow the way and is not a positive moral force.
Even though written texts idealize them, the commitment to authentic intellectual
stimulation of their disciples is notable in each. Both Confucius and Socrates are
memorable for their “ways of proceeding” (methodologies) that were based upon
relentless questioning. For each moral wisdom was the highest prize. It was for his
spirit of inquiry and transformative vision that Socrates was put to death for according
to his words in Plato’s Apology:
. . . it is the greatest good for a man every day to discuss virtue and the other
things about which you hear me talking and examining myself and everybody
else . . . the unexamined life is not worth living for a man (Treddenick, 1969,
36c; emphasis added).
We do not find in either thinker a treatise on commerce and markets. In fact,
they seem to take for granted the institutions of their day together with embedded
social hierarchies. Yet for them, every individual had dignity and moral standing
and this formed the basis for authentic individualized consideration. Each takes the
interests of others seriously and is forgetful of self alone. Each facilitates a common
good for all and a future for individuals that is worth sacrificing for. In both Socrates
and Confucius we discover an almost tutorial or mentoring method that had as its
focus “personal cultivation” as a “superior person” (Confucius) or a true “lover of
wisdom” (Socrates). If individual interests are to be sacrificed, it is only to be done
for the sake of attaining virtue and justice, not for wealth or for possessions or to
serve the leader’s interests.
In today’s world, Socrates and Confucius seem almost hopelessly naive, offering
196 LEADERSHIP QUARTERLY Vol. 10 No. 2 1999
a vision based on the premise that through personal cultivation guided by moral
leaders people will develop strong moral character and embrace virtue above all
other things and, in so doing, will transform themselves and society. Personal virtue
and moral wisdom of the leader provide the checks and balances upon power and
self-aggrandizement! From this simple framework of truth-wisdom-virtue a vision
of the transforming power of the moral sage has flowed down through the ages.
The heart of the moral enterprise is the development of good character, which is
defined by commitment to virtue in all circumstances. This framework was integrated
into Judaic-Christian traditions through personages such as Augustine, Aquinas,
and Maimonides. In Judaic-Christian traditions, the moral sage (saint, holy
person) exercises a transforming influence upon those all those whom s/he contacts.
The moral sage is a leader.
These traditions of the moral sage serve as a root metaphor and framing narrative
of each respective culture’s value systems. In terms of cultural practices, however,
the dynamics vary considerably . In China, for example, the morality of factionalism
and personal networks (guanxi) are highly discussed (Pye, 1995), especially in light
of recent economic reforms (Shanghai Investigative Group, 1995; Zhu & Ye, 1995).
In all of this, based on Chinese sources themselves, it is the moral quality of
leadership that is foremost in people’s minds.
While the tradition of virtue ethics has been less prominent in philosophical
traditions of modern Western rationalism, it remained very much alive in religious
circles (MacIntire, 1981) and recently has found increasing applications to business
ethics (Koehn, 1995; Maitland, 1997). With the renewed emphasis upon leadership
in both strategic management and business ethics, the virtues and moral character
of leaders have taken center stage.
From the literature on transformational leadership, it is clear that there are
many points of congruence between the “authentic moral sage” and the “authentic
transformational leader.” Being a moral leader is more a creative art than science.
Its hallmark is existential practice, where one engenders virtue in self, others and
society though example and virtuous conduct. The “superior person” transforms
relations between people in society to reflect the “way” of the “mandate of heaven.”
What emerges from the above is that a moral person is a superior person precisely
by his or her embrace of the way of virtue. The process of growth in virtue is one
of creative transformation of self (Tu, 1985; deBary, 1991a; 1991b). But this is no
individualist project—it occurs both within and for a fiduciary community. A person
becomes virtuous within a community. A person becomes virtuous for the community—
to “give all people security and peace.” (Xin, 1994, Analects, 14, 42) The true
transformational leader is to be, in Confucian terms, a “superior person.” We
examine this further in light of how a leader deals with impression management.
Sophistry, Pretense, and Impression Management
Impression management is the regulation of information about a vision, the
organization, and the Self. The authentic transformational leader may remain ethical
in using impression management to provide followers with “identity images” of
trustworthiness, credibility, moral worth, innovativeness, esteem, and power (GardTransformational
Leadership Behavior 197
ner&Avolio, 1998, p.40). Conversely, impression management may be the sophistry
and pretense of the pseudo-transformational leader providing self glorification,
“spin” on events, excuses, and the big lie. The criticism of its immorality reads as
if it were directly taken from the Analects and from the Apology!
To foster their influence and esteem among their followers, “transformational”
persons, particularly those leaders who want to bolster their charismatic and inspirational
image, engage in impression management. (Gronn, 1994). Gardner and
Avolio (1998) note that many charismatic leaders orchestrate their presentations
to frame, script and stage their performance. The presentations can be moral,
amoral or immoral. For example, to maintain morale in the face of uncertainties,
without sacrificing their virtuousness, competent leaders may send out messages
to rally support. Evidence may be provided projecting an image of strength and
decisiveness. On the other hand, morality will be tested when incompetent leaders
focus all the attention on their strengths rather than their weaknesses, appeal to
the fantasies of their followers, adopt the values they feel fit the implicit theories
that followers have about ideal leadership, paint a vision of the future that is more
fantasy than reality, and exaggerate the meaningfulness of the followers’ efforts.
They are, in short, the “sophists” and “small persons” whom Socrates and Confucius
condemned. The most telling difference between them and true moral leaders is
that their puffery and self-aggrandizement emanates from them and their handlers,
rather than from acclamation by the people who might choose to emulate them.
There are differences between absolute truth-telling, the shading of facts, and the
big lies; between emotional and intellectual appeals; and between objectivity and
advocacy. The basic moral issues are captured in the virtues of authenticity, integrity,
truthfulness, and credibility. Moral character and virtue are only adequately expressed
in actions and behavior, not mere words. Moral philosophy in every culture
and age has been riddled with falsity and pretense—“false prophets,” “angels of
darkness” who clothe themselves in light, or “sophists”—in short, pseudo-transformational
leaders whose specialty is rationalization of what they do. Nonetheless:
the credibility of the leaders suffers when the truth is stretched. Trust in the
leaders is risked and . . . trust is the single most important variable moderating
the effects of transformational leadership on the performance, attitudes, and
satisfaction of the followers (according to a large-scale survey by Podsakoff,
Niehoff, Moorman, & Fetter (1993). Although distant leaders may be able to
play with the truth longer than can close, immediate leaders . . . the trust so
necessary for authentic transformational leadership is lost when leaders are
caught in lies, when the fantasies fail to materialize, or when hypocrisies and
inconsistencies are exposed (Bass, 1998a, p.173).
When self-promotion and hype are excessive, they can create the impression of
being manipulative, untrustworthy, overzealous and conceited (Gardner & Avolio,
1998). The relentless moral inquiry advocated by both Socrates and Confucius, as
well as much religious tradition easily puncture such balloons.
Impression management is the norm for advertising, publicity agents, and spin
doctors seeking visibility and celebrity status for their clients. Morality may be a
198 LEADERSHIP QUARTERLY Vol. 10 No. 2 1999
matter of what is customary. Hype may be acceptable and controllable by the
availability of full information and the concern for maintaining credibility and trust.
Rhetorical skills which enhance appeals work best for leaders who are at a distance
from their followers rather than close to their followers (Shamir, 1995). Leaders
close to their followers lose trust readily with loss of reputation for not telling the
truth.
Truly transformational leaders, who are seeking the greatest good for the
greatest number without violating individual rights, and are concerned about
doing what is right and honest are likely to avoid stretching the truth or going
beyond the evidence for they want to set an example to followers about the
value of valid and accurate communication in maintaining the mutual trust
of the leaders and their followers (Bass, 1998a, p. 174).
Nonetheless, in a “lesser of two evils” type of argument, when no likely outcome
in a particular situation is morally ideal, and the “second best” seems better than
nothing, there may be instances when a moral leader may find it necessary to
moderate the hard facts of a circumstance. The transformational leader can be
hopeful and optimistic without being deceitful and perfidious. Heifetz (1994) suggests
that it is ethically acceptable to delay telling patients they have a terminal
illness until the physician feels the patients are ready to hear the prognosis.
In trying to cope with the strong isolationist sentiments in 1940 in the United
States and the emergency needs of Britain to keep open the North Atlantic supply
routes being threatened by German successful submarine warfare, President Roosevelt
initiated the “lending” of 50 U.S. Navy destroyers to the British rather than
asking an isolationist Congress to give them the destroyers.
Impression management can also be used defensively to protect the leader’s
and the organization’s image and vision. Ronald Reagan was labeled the “Teflon
President” because of his skill in deflecting criticism (Gardner & Avolio, 1998).
THE MODERN ETHICAL AGENDA OF INDIVIDUAL LIBERTY,
UTILITY AND JUSTICE
To guide moral actions, modern Western ethics marks a change in Western tradition
in its articulation of ethical criteria. While recognizing the moral heritage based
upon faith, modern Western ethics was inspired to large degree by reason and by
science. It has placed emphasis upon rules or principles to be followed in concrete
situations; as a social ethic it has emphasized procedural justice. At one extreme,
this new ethical agenda has assigned the highest value to individual liberty and the
right of the individual both to determine his or her interests and to pursue them.
When a leader appears to arbitrarily or surreptitiously influence the values of
followers or to interfere with individual determination and pursuit of interests, it
is judged morally objectionable. This issue goes to the heart of the dimensions that
we ascribe to an authentic transformational leader. It questions whether it is possible
to have “idealized influence” and “inspirational motivation” without controlling,
dominating and otherwise diminishing the liberty of conscience, free choice and
Transformational Leadership Behavior 199
self-determination of followers. It questions whether leadership that asks for the
dedicated commitment of followers can, in the same breath, truly provide for
individualized consideration of a follower’s interests.
What Constitutes Ethical Leadership for Libertarians
Libertarians such as Robert Nozick (1974) and Ayn Rand (1964) view any form
of leadership that dominates followers as antithetical to core values. They see the
exercise of liberty and free choice by the individual as the heart of the moral
enterprise and the thwarting of such liberty by others as the major moral evil. For
Nozick and Rand, life is inherently social, in the sense that one pursues happiness
while rubbing up against others doing the same. However, their view of society is
atomistic: society is an aggregate of self-contracting individuals who go about life
both determining what is their happiness as well as how to pursue it. Based upon
such a dynamic of liberty, social moral obligations derive only from free valid
contracts and the truthfulness and promises they entail. Transactional leadership
is valid to the extent that is consistent with a morally legitimate contract between
affected individuals. In this view, transformational leadership can only be viewed
with suspicion as a covert exercise at control and domination. Everyone should be
his or her own transforming leader.
Similar themes are sounded in areas of modern existentialist philosophy exemplified
by Camus, Sarte and Marcel (e.g., Sartre, 1992). The heart of the moral project
is to “choose oneself” and claim responsibility for the “self” that one is and for the
relationships one has. To blindly follow others, to embrace their life projects rather
than one’s own, to fail to exercise such freedom is a moral evil. Any form of
leadership that entails abandoning the existential responsibility for one’s self is a
plague.
There is little moral role for leaders in such a context, except to enhance individual
liberty, rights, and self-determination. Unfortunately, a good deal of the leadership
literature is predicated upon the “leader-single follower” model and neglects the
dynamics of “leader-diverse stakeholders.” There are certainly grounds for such a
focus: A leader may be a catalytic agent of a follower’s personal development. The
leader may be inspirational, may set an example to emulate, enhance liberty and
choice, and facilitate the pursuits of one’s interests. However, the moral analysis
of leadership is severely deficient if it is limited to such considerations. The leader
is more than an “enhancer” of individual self-determination and is also more than
the most effective calculator of the “greatest happiness of the greatest number.”
What Constitutes Ethical Leadership in the Human Relations Movement
The Human Relations Movement is at the other extreme of the libertarian
ethical position. It espouses shared values, equality, power sharing, consensus,
and participative decision-making. It sometimes equates individual leadership with
dominant behavior, the power of authority, the giving of directions, the arbitrary
making of decisions, and neglect of followers’ interests (Rost, 1991). We argue that
such a notion of leadership is truncated and neglects the inspirational side of
leadership and the legitimate needs for the power of position, authoritative initia200
LEADERSHIP QUARTERLY Vol. 10 No. 2 1999
tives, and leader and follower responsibilities. In community affairs, the Human
Relations Movement takes the form of “grass roots” democracy. In organizations,
it is seen in much of the theory and practices of Organizational Development (OD).
It is also seen in sensitivity training that features the spontaneous emergence of
the different roles of leadership in initially ambiguous situations. Learning how
to give and receive feedback provides the means for the group to progress. For
organizations to improve themselves, the seeds of reform reside in the values,
interests and capabilities of their members. Organizations could improve if the
members were empowered to try out their ideas and learn from feedback (Bass,
1968). The follower-leader distinction should wither away (Burns, 1998; Rost, 1991).
Meeting the Moral Requirements of Libertarians and Human Relationists
Both libertarian and human relations theories are predicated upon the moral
dignity of each person—“everyone counts for one.” The core values of modern
Western philosophy affirm individual liberty, inviolability of conscience, self-determination,
and choice. Rawls (1971), echoing the tradition of Locke (1960), suggests
that the liberty of individuals be maximized subject only to the condition that there
be similar liberty for all others. Yet there is a notion of the common good that
transcends a mere aggregate of individual goods. And, as all authority derives from
the consent of the governed, the key problem is one of social choice, where the
common good is provided for without infringing upon inalienable individual human
rights. Individual and community exist in a delicate tension (Bellah et al., 1985).
Ethically, this provides the grounds for discussions of civic virtue. We suggest
that it also provides the grounds for the necessity of authentic transformational
leadership. In what follows we discuss these issues on the basis of stakeholder
theory, value congruence, agency and cooperative action.
Stakeholder Theory
It is helpful to place leadership in the context of contemporary stakeholder
theory (Freeman, 1984), where a business firm or social organization is seen as
composed of various constituencies (workers, customers, suppliers, managers, shareholders,
local communities and so forth) all of whom have a legitimate strategic
and moral stake in the organization. Yet they all may have different values and
interests, different resources, and different sets of other stakeholder relationships
deriving from other organizations. The core problem is to achieve the common
good of the organization, while at the same time meeting the needs and safeguarding
the rights of the various stakeholders. To achieve such an outcome, people must
to some extent come together and cooperate on the basis of values, interests, and
social choice. In such a view, the common good is not a mere aggregate of individual
interests or a “greatest happiness” of a majority (Steidlmeier, 1992; pp. 66–71,
97–99, 260–263). It is a truly common good, that is only possible through civic virtue,
cooperative action by all participants. Examples are found in the common goods
of language and culture, of social peace and order and economic welfare. These
are all social as well as individual goods and only attainable through cooperative
action and the exercise of civic virtue.
Transformational Leadership Behavior 201
It is in such an arena that one finds the greatest need for authentic transformational
leadership, for only such leadership can help people develop the common
interests of a community beyond the aggregate interests of its individuals. Authentic
transformational leadership goes beyond the individual leader or follower, the
aggregate of individual interests, or a calculus of greatest utility. Fundamentally,
the authentic transformational leader must forge a path of congruence of values
and interests among stakeholders, while avoiding the pseudo-transformational land
mines of deceit, manipulation, self-aggrandizement, and power abuse. It is clear
that leadership can become exploitative and abusive. In this regard, criticisms
of transformational leadership stem from the human relations and organizational
development literature in management and the individual/community dialectic in
ethics (Bellah et al., 1985).
Achieving Value Congruence
Many find moral fault with transformational leadership when it motivates followers
to go beyond their self-interests for the good of the group or organization. For
Stevens, D’Intino and Victor (1995), transformational leaders influence the values
of the members of an organization so they will adopt the leaders’ values as their
own. This “fundamentally violates the democratic and humanistic values” of Organizational
Development (p. 125). Under such influence, members are induced by the
leadership to eschew their own best interests for the sake of the organization. For
White and Wooten (1986), the democratic and humanistic values of OD conflict
with the organizational values of productivity and efficiency. In dealing with such
value conflicts, the transformational leader redirects the members into pursuing
organizational efficiency instead of the members’ personal needs for income, security,
affiliation, and career development (McKendall, 1993). Transformational leadership
is seen as immoral in the manner that it moves members to sacrifice their
own life plans for the sake the organization’s needs. There is no moral justification
for the vision of the CEO becoming the future to be sought by the employees.
Furthermore, democracy and humanism espoused by OD require that all such
developments result from consensual participative leadership and the “fair settlement
of values conflicts” (Stephens, D’Intino, & Victor, l995, p.135).
For Rost (1991), the achievement of value congruence between the leader and
the led demands consensual decisions, individual rights, and freedom of choice.
Yet free choice narrowly conceived can result in the tragedy of the commons. In
the ethics of Nozick and Rand, the solution is found by negotiating interests in terms
of a contract and then fulfilling that contract. And indeed, “win-win” mathematically
optimal solutions can be calculated (Brams & Taylor, 1996). Nonetheless, free
choice can produce the Abilene Paradox in which each member of a family group
does not want to go to Abilene. With free choice and each member believing he
or she is going along with the wishes of the others, without the leadership to test
for consensus, every member of the family goes to Abilene although no one wanted
to go (Harvey, 1996). Contracts can be skewed in favor of those with more resources,
contacts, and “bargaining power.” People often appreciate leadership that points
the way out of dilemmas whether it comes from others within their own collective
or from external authority. Leaders as divergent in their politics as Mao Zedong
202 LEADERSHIP QUARTERLY Vol. 10 No. 2 1999
and Shimon Peres agreed that the task of leadership is to sense the problems of
their followers and to articulate solutions that satisfied their interests.
Rost (1991), reminiscent of libertarians Nozick and Rand, asks for leader-follower
distinctions be erased to reach true participative democracy. Burns (1998) partially
agrees and would substitute for leaders and followers, initiators, supporters and
opponents. But the counter-arguments are that if everyone in a group is responsible
for its leadership, no one is responsible. Furthermore, if a group is initially leaderless,
the members compete with each other for leadership. One or more leaders emerge
who initiate and propose more than the other members. Followers emerge who
are responsive to the leaders, and non-responsive isolated persons remain who are
passive (Bass, 1954).
If trying to align the values of members of an organization with the good of all
stakeholders is unethical , then it is unethical to contingently reward prison inmates
with time off for good behavior or for transformational teachers to move pupils to
internalize the values of good citizenship for the benefit of society. “Libertarians
would agree that one’s life plans are paramount but they are close to espousing
anarchy as are the OD extremists who charge immorality if the transformational
leader intervenes in the individual follower’s life plans” (Bass, 1998a, p. 179).
With this line of thinking that it is immoral to align the values and behavior of
organizational leaders and followers, it then is unethical to send a soldier into
harm’s way or to require an employee to avoid disclosing trade secrets of the
former employer when the employee transfers to a competing firm. Authentic
transformational leaders achieve value-congruence with followers by sharing with
them what both will regard as right and good. Pseudo-transformational leaders
achieve value-congruence by sharing unrealistic, unattainable, and exploitative expectations.
Thus, we argue that there is much moral justification for authentic transformational
leaders trying to achieve value-congruence between themselves and those
they lead. When such congruence is achieved, both the leaders and the led are
more satisfied emotionally (Meglino, Ravlin, & Adkins, 1989). The leaders are
aided by acculturation processes, for as followers are socialized into an organization,
the congruence increases between their values and the values of the organization
(O’Reilly et al., l991). And the congruence results in leaders being seen by followers
as more considerate, competent, and successful (Weiss, 1978). Additionally, followers
are more satisfied with their assignments (Engelbrecht & Murray, 1993).
Transformational leadership is value-centered. Leader and followers share visions
and values, mutual trust and respect, and unity in diversity (Fairholm, 1991);
however, the moral question remains. Are the followers coerced or unknowingly
seduced into adopting the values of the leadership, or is the emerging congruence
in the values of the leader and the led the result of their mutual influences? For
human relationists, the coming together of the values of the leader and followers
is morally acceptable only if it comes about from participative decision-making
pursuing consensus between leaders and followers. Whether a leader is participative
or directive, however, is not a matter of morality. It is a matter of the naivete´ or
experience of the followers and many other contextual considerations (Hersey &
Blanchard, 1969). In many cases, directive leadership is more appropriate and
Transformational Leadership Behavior 203
acceptable to all concerned (Bass, 1990). Ethically, values may be imparted directively
to followers by authorities whom they respect and trust, and from whom they
want guidance: priests, physicians, parents, and teachers. If the values espoused are
immoral, then the authorities are pseudo-transformational.
Social Utility and the Achievement of the Congruence of Interests:
Transcendence, Agency and Trust
In Western philosophy the notion of utility is often put forward as the proper
ethical goal of social choice, provided that it does not transgress inalienable individual
rights. For all that, it is not easy to specify what the term “utility” means. John
Stuart Mill (1967, p. 900) identified it as the “greatest happiness principle” e.g.
“. . . actions are right in proportion as they tend to promote happiness, wrong as
they tend to produce the reverse of happiness. By happiness is intended pleasure,
and the absence of pain. By unhappiness, pain, and the privation of pleasure.”
Modern parlance is less precise and variously interprets utility to mean achieving
the greatest good, the greatest satisfactions or just majority rule, either for a given
act (to properly separate one’s household trash) or for a given rule (such as affirmative
action) over a short or long term. In simplest terms the rule of utility, as
popularly understood, argues that the consequences of rules or actions are morally
good is they benefit the majority without transgressing inalienable individual rights.
This applies to both individual and social choices. Ideally, social utility is arrived
at through the exercise of liberty: elections in politics, consumer sovereignty in the
marketplace, participation in the workplace.
Problems remain when information is insufficient and outcomes are uncertain.
What one thinks about the adequacy of utility as a moral measure gets back to
what one thinks about human communities—life in groups, organizations, and
societies. In the libertarian view and in much of the literature of business ethics
(Gini, 1996; 1995) and leadership (Rosenthal & Buchholz, 1995), an atomistic view
of collective life prevails. The collective life is constituted by freely contracting
atomistic individuals, who, in order to survive, must pursue their self-interest rationally.
Self-determination is the ideal; each is his or her own leader and, in the
interest of autonomy, as self-sufficient as possible. The common good is seen as
the aggregate of individual goods that yields the greatest utility.
If, however, one views life in community as affording a common good and level
of personal development that is beyond what atomistic individuals can achieve on
their own, then the terminal goals sought are beyond a calculus of utility and better
expressed in terms of enlivening relationships based upon justice and peace and
grounded in trust.
In either case, however, leadership is necessary to forge a common ground. While
an atomistic view would favor transactional leadership, a communitarian view calls
for transformational leadership. How is a common ground to be brought about?
Influential interactions range from “making sense” out of the situation people
face collectively to making cooperative decisions. In such processes, an authentic
transformational leader is one who can facilitate the process and move it along
by articulating ideals and vision, providing inspirational motivation, stimulating
204 LEADERSHIP QUARTERLY Vol. 10 No. 2 1999
intellectual creativity, and ensuring individual consideration within cooperative
actions by the group. Ethics very much concerns interpersonal interactions and
evolves in a complex set of processes mediated through background institutions of
families, schools, media, jurisprudence, religion, and the arts.
Is Aligning Values Unethical?
Shamir, House, and Arthur (1993) explore and explain the role of the leader in the
matching process between individual interests and social choice. They see nothing
immoral in it. But as already noted, Stevens, D’Intino, and Victor (1995) among
others see transformational leaders as subversive, because transformational leaders
encourage members of an organization to go beyond their own self-interests for
the good of the organization. As a consequence, the members lose more than they
gain. Conflicts between leaders and followers are settled to the benefit of the leader
and the detriment of the followers. Followers sacrifice their own interests in order
to conform to the leaders’ vision of what will be best for the organization. Although
Shamir, House, and Arthur (1993) argue that the essence of charismatic leadership
is the matching of the hierarchy of values that are salient within the follower’s selfconcept
to those of the leader, such is regarded as immoral by critics. Indeed, much
of pseudo-transformational leadership talk of empowerment can be bogus (Ciulla,
1996; 1995)
Jackall (1988) conceives of the corporation to be like a medieval fiefdom. The
CEO is a feudal lord who offers his vassal managers and enserfed employees
transactional material benefits and advancement in exchange for their service. In
seeking loyalty and trust from their managers and employees, the CEOs may also
practice pseudo-transformational rather than authentic transformational leadership.
After being asked to forgo personal, family and community interests, the managers
and employees may find themselves out of a job due to the downsizing of the
organization. The CEO may feel morally justified by underscoring that the downsizing
was necessary for the organization’s survival and for the benefit of the remaining
employees and other stakeholders. But the supportive evidence is often missing.
Although, immediate cost reduction is obtained by downsizing, often the expected
long-term benefits to the organization are a chimera (McKinley, Sanchez, & Schick,
1995). Additionally, the costs to employees, their families, and their communities
outweigh the expected gains to the organization. The ethical test comes when
calculating the benefits to senior management and shareholders compared to the
costs to the employees of downsizing as well as the long-term effects on the health
of the organization.
The Significance of Agency
When the process of convergence of values and interests is such a potential
minefield of immorality, how can it be made to work? First, it is important to realize
that modern organizations are characterized by agency (Eisenhardt, 1989) and that
such agency only functions benevolently if there is a solid foundation of moral
trust (Hosmer, 1995). In modern organizations, the ideal of an individual actively
managing all of his or her affairs is archaic. In both political, market, and cultural
institutions, the individual—whom we call the principal—engages another, whether
Transformational Leadership Behavior 205
a congress person, manager, lawyer or confidante—whom we call the agent—to act
to secure his or her interests. The economics and business literature, especially that
of finance, is full of the “agency problem,” how to ensure that the agent does in
fact keep the bargain (Jensen & Meckling, 1976). We argue, by way of extension,
that a leader very often functions as an agent of followers’ interests. This argument
is “by extension,” because the “principal/agent relationship” in this case is often
tacit and informal rather than specified in a written contract. In either case, however,
the principal/agent relationship cannot possibly succeed without trust (Solomon,
1996). As we present the issue here, transformational leaders act as an agent for
various followers in a wide number of capacities. The leaders do this as long as
followers continue to treat them as leaders. If transformational leadership is to be
authentic, it must possess the virtue of trustworthiness. Nowhere is this issue more
to the fore than with the component of individualized consideration.
Distributive Justice
Distributive justice is arguably the most contentious issue in modern ethics.
Skewed opportunity sets and skewed distributions of benefits and costs are at the
heart of conflicts about employee compensation, stockholder returns and executive
compensation, and options and bonuses reaped, whether a company prospers or
not. Even when an outcome is ostensibly “win/win” the proportionate shares often
favor the powerful in a manner not justifiable on the basis of either work or
merit or need. There is probably no greater or more pointed test of authentic
transformational leaders than the shares they take for themselves. There is no doubt
that there are many and grievous distributive injustices and that they are caused by
those in authority who claim to exercise benevolent leadership. The organizational
justice literature has focused more upon wrongdoings and perceived injustices done
to individuals by the organization than on positive steps and facilitating mechanisms
to ensure an ethical environment (Greenberg, 1987, 1990; Sheppard, Lewicki,&
Minton, 1992). But it does underscore the “fairness issue” in terms of the distribution
of benefits and costs, whether they be access and opportunities for career advancement
or concrete goods, services and compensation.
Even though it often appears that individual employee’s interests are sacrificed
in the transforming process for the good of the organization, they do not have to
be. Nor will those interests have to depend on the democratic participation of
followers in each and every detail, as described in the section on agency above.
The truly transformational leader concerned with an ethical philosophy in managing
an organization conceives of the organization’s ultimate criterion of worth as the
extent to which it satisfies all of its stakeholders. In the case of business firms, this
means aligning and balancing the interests of the various stakeholders—owners
and shareholders, managers and employees, suppliers and customers, community
and society. In the case of not-for-profit institutions and social movements, this
means aligning and balancing the interests of the officers and directors, the rankand
file, and the public (Bass, 1952). Additionally, the leadership may need to take
into account constituents’ families, government regulations, technological advances
and future needs.
Also ignored by the overemphasis on grassroots participation is what happens
206 LEADERSHIP QUARTERLY Vol. 10 No. 2 1999
when individual interests outweigh the common good and transformational leadership
is absent. Whenever the same limited resource is freely available to all individuals
apart from the costs and efforts to obtain the resource, what results is the
“tragedy of the commons” (Siebold, 1993). Thus, if the resource—the common—is
public grazing land, each nearby farmer can try to maximize its use in his selfinterest.
Soon the land becomes overgrazed and is able to feed fewer and fewer
animals. Such is what happened to 17th Century Boston farmers. In the 1980s New
England fishing boat owners invested heavily in new, high technology vessels and
proceeded collectively to over-fish the Grand Banks and nearby fishing grounds.
Marine biologists had predicted ten years earlier what would happen. The reproductive
capabilities of the fisheries were seriously depleted. Owners were bankrupted;
the fishing had to come to a near-halt. Missing was transformational leadership
from government executive or legislature, directing the regulation of a more rational
policy. Missing likewise was transformational leadership from within the fishing
industry to voluntarily promote cooperative guidelines for conservation. Authentic
transformational leadership could have stimulated agreements about priorities,
shared values, perceived common goals, and meaningful purposes. The individual
boat owners involved would have been moved to go beyond their self-interests for
the good of the collective.
The fishing tragedy of the commons could have been prevented by leadership
that recognized the problem, envisioned a fair win-win solution to it, then, communicated
and persuaded others about the problem and possible solutions. Also needed
was leadership to develop the required cultural and organizational infrastructure.
Unfortunately, the fishing commons is now all the oceans of the world. Voluntary
conservation at the local level is no longer enough because of the international
poaching by the large factory ships with a global reach. Statesman-like transformational
leadership is needed at a world-wide level to save the declining stocks of fish
in all the oceans for agreements among local traditional fisher-folk, international
factory vessels, conservationists, scientists and governments (Parfit, 1995).
Governance, Directive Leadership and Cooperative Action
As noted earlier, authentic transformational leaders may be directive rather than
participative as they attempt to align individual and organizational interests. if they
grasp the sense of what is needed and can articulate what will align the interests
of their followers and the organization.
There is no one best way to lead in all situations. Few leaders of organizations
and movements give orders and direct without reasons. Many more give orders
with reasons that are often persuasive reasons. Most often, leaders consult with
followers before they, the leaders, decide. Less frequently, they empower followers
through delegation of responsibilities or participate with followers in shared decisions.
Ordinarily followers are more satisfied with consultative or participative
decision-making but the effectiveness of the decisions will depend on how knowledge,
wisdom and expertise are distributed between the leaders and followers (Bass,
Valenzi, et al., 1975).
Hierarchical organization and assembly lines are being modified and replaced
by more fluid teams of members to deal with the changing requirements of new
Transformational Leadership Behavior 207
technologies, markets and work forces. More participation is needed for agreements
about objectives, methods, and values. Neverless, direction from higher authority
is also needed and it does not have to be arbitrary and without reason and explanation.
But members of teams must go beyond their own their self-interests to seek
the objectives of their fluid organizations. Along with its checks and balances,
democratic governance likewise requires that its leaders also go beyond their own
self-interests. Polities are to be guided into control of irrationality and promotion
of the values of logic and rationality Although humans are naturally self-interested,
they are capable of virtue (Locke, 1960). Self-interest instead of interest in the
common good can be countered by transactional controls or by the appeals of
transformational leadership. Either would be morally justified unless it was coerced,
without the consent of the governed or due to blind trust (Adkinson, 1987).
It is clear from the organizational psychology literature that organizational features
(Badaracco & Webb, 1995; Darley, 1994), group processes (Gersick and
Hackman, 1990), and individual cognitive functioning within the context of a job
(Messick and Bazerman, 1996) can all impede business ethics and even morally
disengage the individual (Bandura et al., 1996). The authentic transformational
leader strives to ameliorate such structural impediments with sound ethical practices.
It is not a command function, but, rather, a creative and mediating function that
aims to achieve a true consensus in aligning individual and organizational interests
in addition to other legitimate stakeholder interests. However, the meaning of true
consensus may be misunderstood. In true consensus, the interests of all are fully
considered, but the final decision reached may fail to please everyone completely.
The decision is accepted as the best under the circumstances even if it means some
individual members’ interests may have to be sacrificed. In moving members beyond
their self-interests, rather than being in conflict with the purposes and philosophy
of ethical human relations and organizational development (OD) we believe, to
the contrary, that for the most part, the theory and practices of transformational
leadership are compatible with them.
Organizational Development and Transformational Leadership:
More Alike than Different
Transformational leaders can play important roles in organizational development.
They can make use of process observation and many of the techniques of
OD and improved understanding of group dynamics. But this opens possibilities
of pseudo-transformational behavior. White and Wooten (1986) pointed out that
sometimes data may be misused and misrepresentations occur in the OD process.
Inspirational leaders may oversimplify their messages or use exaggerated emotional
appeals. In both instances, individual interests may be sacrificed for organizational
enhancement.
In assessing the “ethics of authority” we need to recognize the reality of agency
in democratic participative processes and to distinguish between the authoritarian
personality and the directive leader. When it comes to the common good of an
organization, the leader in many ways may be directive as a well-intentioned agent
of the principals.
208 LEADERSHIP QUARTERLY Vol. 10 No. 2 1999
The authoritarian personality is anti-democratic, inflexible, submissive to higher
authority, conventional in thinking, and prefers low risk and highly structured
situations. Directive leaders tell what needs to be done, usually with explanation,
give orders, and make decisions for self and others, but ordinarily give reasons for
the orders and decisions.
Conflicts in values are a continuing occurrence in utilitarian organizations. Which
is more important? Productivity? Safety? Cost Reduction? Efficiency? Employee
and manager well-being? Profitability? Survival? Growth? Some say stockholder
interests are paramount. Others argue that morality requires maximizing the wellbeing
of the employees. Transformational leaders find ways to align those seemingly
conflicting interests. For Graham (1995), transactional leadership is at Kohlberg’s
(1981) “pre-conventional” level of moral development as it emphasizes job requirements
and contracts. Transformational leadership is at Kohlberg’s “post-conventional”
level of moral development as it emphasizes universal principles of justice
and the interests of all stakeholders in the organization (Turner & Barling, 1998).
POWER, PERSUASION, CHECKS AND BALANCES, AND THE MODERN
ETHICAL AGENDA
We have presented authentic transformational leadership as an ideal type. Transformational
leadership, particularly pseudo-transformational leadership may lend itself
to the unchecked abuses of power. It is power abuses that concern us here (Tsou,
1995). Keely (1995) faults transformational leadership for lacking the checks and
balances of transactional leadership. Much of checks and balances argument refers
to macro-social legislative, administrative and judicial checks and balances upon
political power, rather than checks and balances upon power within organizations.
The latter does exist, in theory at least, in terms of (ideally) independent Boards
of Directors, stakeholder proxies, labor unions, the free choice of suppliers, and
consumer sovereignty. Indeed, competitive market theory presupposes that power
is held in check and that oligopolistic or monopolistic forms of power should be
regulated if not eliminated. Furthermore, in complex markets and enterprises where
the managers lead the firm as agents of the principals’ interests, checks and balances
are a problem precisely when markets are dominated by power groups and agents
feel they can ignore the principals’ interests. They may be aided and abetted by
the lack of appropriate auditing and disclosures of revenues and expenses. Exploitative
and abusive bosses remain with us. How can they be controlled or dislodged
particularly if they are also pseudo-transformational? Boards of Directors, government
regulators, and union officials provide possible checks. Boards may force
resignations; regulators may fine; unions may strike. All may sue.
The bigger question is about what protects minority opposition in organizations
and communities when the majority succumbs to the appeals of the transformational
leader. Keeley (l995) looked to James Madison’s contention in the Federalists
Papers that a constitutional government required contending interests to be heard
so that after rational debate, among the contending factions, optimal decisions
could be made. Otherwise, the many factions of society could be controlled by
those in power and would abandon their own best interests if they were coerced
Transformational Leadership Behavior 209
into sharing the same interests. According to Keeley (1995) interpreting Madison,
an unhealthy concentration of power, and dictatorship by the majority at the expense
of the minority, results from transformational leadership which succeeds in convincing
people with truly diverse interests that they share common goals even if they
truly don’t. For Keeley the rules of governance must require the separation of
powers of the executive, the assembly, and the judiciary. Outcomes must depend
on negotiation and the give-and-take of transactional leadership. If only the interests
of the strongest faction dominate, more factional conflict will emerge with less
tolerance for minority views. Rival and opposing interests are best controlled if
purpose and power are separated and transactional negotiations, trade-offs, and
exchanges produce compromises acceptable to all concerned. This is in contrast to
the emphasis of transformational leadership on the sharing in a common vision and
a common purpose.
The all-or-none argument of Keeley misses the point. Madison himself embraced
the overriding importance of the common good and espoused the need to sacrifice
private opinion and private interests to the public good (Wren, 1998). In the politics
of checks and balances, particularly when it comes to marginal moral standards,
transactional negotiations are likely to see much bluffing, withholding information,
manipulating facts, making political alliances and trade-offs, settling past obligations,
delaying implementations, openly compromising but covertly diverting plans,
and timing the release of news. Power is used to weaken opposition and strengthen
support. When authentic transformational leaders see themselves in a win-lose
negotiation, they try to convert it into a win-win joint problem-solving situation or,
if this fails, they become effective transactional negotiators trying wherever possible
to use persuasion rather than power.
For Thomas Jefferson, checks and balances would not be needed if the country
shared common interests. His transformational vision was that of nation of small,
independent farmers and mechanics with common interests who could reach the
right decisions after rational debate. Public education to create an informed citizenry
was required for this to happen. In this vein, J.S. Mill argued strongly for encouraging
free speech to provide the marketplace for ideas in which the best arguments
buttressed by the most compelling evidence and reasoning would prevail (Higgenbottom,
1996).
AUTHENTIC MORAL LEADERSHIP AND CULTURAL RELATIVISM
Evidence is accumulating that some of the variance in leadership theory and behavior
is universal and some is contingent on culture of country and organization
(Bass, 1995, 1997; House et al, 1998) The assertion that authentic transformational
leadership has a moral core raises the dilemma of “what core values” guide both
the leaders and followers: Are some universal? Are others relative to the culture
or expressed differently in different cultures? It can be argued that whether or not
transformational leadership is authentic depends on the culture of the followers
and whether it is judged true or false depends on who does the judging (Schwartz &
Sagiv, 1995).
In terms of ethics, one examines culture in terms of its impact upon the moral
210 LEADERSHIP QUARTERLY Vol. 10 No. 2 1999
agent and perceptions of moral actions. At issue are the moral agent’s development
of conscience, intentions and degrees of effective freedom as well as the ends,
means and consequences of moral actions. With respect to the broad spectrum of
moral values there is more congruence than is commonly assumed. Broadly defined,
“benevolence” is in many ways a universal value as reflected in discussions of
altruism (Kanungo & Mendonca, 1996, ch. 6), as well as in the root metaphors
emanating from Confucian and Socratic traditions. Yet, for example, while friendship
and reciprocity may be universally valued in terms of moral excellence, they
may well play out differently across cultures.
Hofstede (1980,1997) presents a simple framework for analyzing culture in terms
of possibly universal values and practices (which he defines widely as including
rituals, heroes, and symbols). For instance, friendship, love, ownership, work, fairness
in exchange are universal values found in diverse cultures throughout the
world. At the same time the social customs and practices through which they are
realized vary considerably (Clegg & Redding, 1990; Steidlmeier, 1995).
It was this combination of anthropological and socio-cultural diversity together
with the notion of evolution that struck at the heart of natural law ethics and the
notion that universal and eternal moral values undergird all cultures. In today’s
world it is really only religious ethical traditions that assert the validity of universal
moral values as well as practices based on the divine will; even within the great
religious traditions, however, there is hardly full agreement and each is splintered
into schools of thought.
The point is this: for transformational leadership to be “authentic,” it must
incorporate a central core of moral values. Yet the “practices” (in Hofstede’s terms)
of such values are highly culturally relative. Further, even when a set of core values,
such as friendship or honesty, may be found in all cultures their ordering and
relative importance may also vary by culture.
To take an example, what we call “Western culture” is not even philosophically
of one piece. Consider two leaders. The first holds as a core value Mill’s (1967)
principle of utilitarianism—to act in such a way (or to advocate social rules that)
make for the greatest happiness of the greatest number. The second adheres to Kant’s
second formulation of his categorical imperative—never to deal with another person
simply as a means to an end but only as an end in his or her self. (Paton, 1969, pp.
70, 105). On the basis of core values, within western culture itself we end up with
two very different types of transformational and transactional leaders, who would
influence and motivate and deal with followers in radically different ways.
Add in global cultures and the possible numbers of authentic moral configurations
are kaleidoscopic, even when one only deals with broad brush strokes contrasting
“Western” with “Eastern” moral philosophies, or Islam with Buddhism or Christianity.
Nonetheless, it is striking that out of global diversity, Christian Martin Luther
King found inspiration in Hindu Mahatma Gandhi’s philosophy of non-violence,
or that human rights could become the subject of a universal United Nations
declaration.
Rather than simply leading to the affirmation of ethical relativism, such global
diversity of values underscores the need of transformational leaders at all levels of
human society. At the core of all leadership—whether Hillary Clinton’s or Benazir
Transformational Leadership Behavior 211
Bhutto’s—one finds a value core. Second, not all values are congruent with one
another. We see this in modern Western philosophy itself in weighing human rights
against social utility and equity versus efficiency. The conclusion is that by its very
nature, ethics has been and always will be a “dangling conversation” and “unfinished
symphony” as far as its specific content, norms, and practices are concerned. Perhaps
the greatest challenge of leadership is precisely to bridge ethical relativism by
forging a platform of common values and stimulating alignment and congruence
of interests. What is required of the authentic transformational leader is not a
blueprint for all to follow but a sort of Socratic commitment to the process of
searching out moral excellence.
SUMMARY AND CONCLUSIONS
Critics argue that transformational leadership is unethical. They contend that its
rhetoric may appeal to emotions rather than to reason. They contend that it lacks
the checks and balances of democratic discourse and power distribution. They contend
that it violates the principles of the Organization Development (OD) Movement and
that it manipulates followers into ignoring the followers’ own best interests.
The critics fail to consider the positive aspects of inspirational leadership. They
ignore the shortcomings of democratic processes and OD. They fail to distinguish
between transformational and pseudo-transformational leadership. We agree with
Gill Hickman (l996) that rather than being unethical, true transformational leaders
identify the core values and unifying purposes of the organization and its members,
liberate their human potential, and foster pluralistic leadership and effective, satisfied
followers.
Rather than being immoral, transformational leadership has become a necessity
in the post-industrial world of work. As Cascio (1995) has pointed out, the traditional
manufacturing or service job, a fixed bundle of tasks performed by an individual
worker, has been replaced by a manufacturing or service process, completed by a
flexible team with diverse skills, interests and attitudes. As a consequence
. . . today’s networked, interdependent, culturally diverse organizations require
transformational leadership to bring out . . . in followers . . . their creativity,
imagination, and best efforts (Cascio, 1995, p. 930).
Self-aggrandizing, fantasizing, pseudo-transformational leaders can be branded
as immoral. But authentic transformational leaders, as moral agents, expand the
domain of effective freedom, the horizon of conscience and the scope for altruistic
intention. Their actions aim toward noble ends, legitimate means, and fair consequences.
Engaged as they are in the moral uplifting of their followers, in the sharing
of mutually rewarding visions of success, and in enabling and empowering them to
convert the visions into realities, they should be applauded, not chastised.
Acknowledgments: The authors wish to express their appreciation to two anonymous
reviewers and to Professor Joanne Ciulla of the Jepson School of Leadership,
University of Richmond, for her insightful suggestions.
212 LEADERSHIP QUARTERLY Vol. 10 No. 2 1999
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What We Know About Leadership
Robert Hogan
Hogan Assessment Systems
Robert B. Kaiser
Kaplan DeVries Inc.
This article reviews the empirical literature on personality, leadership, and organizational
effectiveness to make 3 major points. First, leadership is a real and vastly
consequential phenomenon, perhaps the single most important issue in the human
sciences. Second, leadership is about the performance of teams, groups, and organizations.
Good leadership promotes effective team and group performance, which in turn
enhances the well-being of the incumbents; bad leadership degrades the quality of life
for everyone associated with it. Third, personality predicts leadership—who we are is
how we lead—and this information can be used to select future leaders or improve the
performance of current incumbents.
A very smart political scientist friend used to
say, “The fundamental question in human affairs
is, who shall rule?” We think the fundamental
question is, “who should rule?” Leadership
is one of the most important topics in the
human sciences and historically one of the more
poorly understood; it is important for two reasons.
First, leadership solves the problem of
how to organize collective effort; consequently,
it is the key to organizational effectiveness.
With good leadership, organizations (governments,
corporations, universities, hospitals,
armies) thrive and prosper. When organizations
succeed, the financial and psychological wellbeing
of the incumbents is enhanced.
Second, and more important from a moral
perspective, bad leaders perpetrate terrible misery
on those subject to their domain. Consider
the career of Foday Sankoh, the former dictator
of Sierra Leone, who died in July 2003. Sankoh
was born in 1937 and grew up in a Sierra Leone
dominated by a small, corrupt urban elite whom
he deeply resented. He joined the Sierra Leonean
army but was sent to prison for 7 years in
1971 for taking part in an attempted coup. After
his release, he went to Libya to train with other
West African revolutionaries; there he met
Charles Taylor (the recently deposed dictator of
Liberia), who became Sankoh’s major ally.
Sankoh founded the Revolutionary United
Front to overthrow the Sierra Leonean government
and take over the country’s diamond
mines.
Sankoh was bright, charming, and charismatic,
and he immediately attracted a large popular
following, especially among the teenage
underclass. He promised to reform education,
health care, and other public services and to
distribute the diamond revenues. Instead, he
used the revenues to buy arms (from Charles
Taylor) and political support. He paid his soldiers
irregularly because he expected them to
live by looting and even by cannibalizing victims
of the army. New recruits were sometimes
required to murder their own parents, which
toughened them and made it hard to return
home. His young recruits, deprived of parenting
and raised in chaos, were notoriously savage
and specialized in amputating appendages,
which they kept in bags. Those with the most
body parts were rewarded. By the end of the
1990s, Sierra Leone was, according to the
United Nations, the poorest country on earth. To
stop the slaughter and ameliorate the misery, the
United Nations, after several false starts, intervened
in 2000. Sankoh was taken captive by an
emboldened mob that had been fired upon by
his bodyguards. He was subsequently indicted
Robert Hogan, Hogan Assessment Systems, Tulsa, Oklahoma;
Robert B. Kaiser, Kaplan DeVries Inc., Greensboro,
North Carolina.
We are grateful for the helpful comments of Roy
Baumeister and John Antonakis on earlier versions of this
article.
Correspondence concerning this article should be addressed
to Robert Hogan, Hogan Assessment Systems, 2622
East 21st Street, Tulsa, OK 74114, or Robert B. Kaiser,
Kaplan DeVries Inc., 1903 G Ashwood Court, Greensboro,
NC 27455. E-mail: [email protected] or
[email protected]
Review of General Psychology Copyright 2005 by the Educational Publishing Foundation
2005, Vol. 9, No. 2, 169–180 1089-2680/05/$12.00 DOI: 10.1037/1089-2680.9.2.169
169
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This article is intended solely for the personal use of the individual user and is not to be disseminated broadly.
by an international court for crimes against humanity.
While in prison, he “lost his mind,” had
a stroke, and died of a pulmonary embolism,
leaving his impoverished country and its mutilated
citizenry finally in peace. Sadly, the moral
to this story—that bad leaders cause much misery—
is all too common.
This article tries to make three points. The
first is that leadership matters; it is hugely consequential
for the success of organizations and
the well-being of employees and citizens. Second,
when conceptualized in the context of human
origins, it becomes clear that leadership is
an adaptive tool for individual and group survival.
We believe that, in essence, leadership
primarily concerns building and maintaining effective
teams: persuading people to give up, for
a while, their selfish pursuits and pursue a common
goal. Our final point is that the personality
of a leader affects the performance of a team:
Who we are determines how we lead.
Conceptualizing Leadership
We first began studying leadership in the
mid-1980s, and we quickly discovered that the
literature contained few defensible generalizations
other than such nuggets as leaders seem to
be somewhat taller and a little bit brighter than
their subordinates (Stogdill, 1948). Since then
we have been assembling a perspective on leadership
that makes sense to us. The following is
a review of our perspective.
Conceptualizing History
There are two major viewp01oints regarding the
principal dynamic in history and human affairs,
and they derive from two distinct causal perspectives.
The first is the tradition represented
by Hegel, Marx, Durkheim, and modern-day
sociologists (and social psychologists, although
they do not realize it); this tradition assumes
that there is a tide running in human affairs, a
tide defined by history or the economy—by
large impersonal forces outside human control—
and individuals are merely floating on the
tide. Many of us have the illusion that we control
our own destiny, but what individual actions
brought about the worldwide depression
of the 1930s that swept the Nazis into power in
Germany? In this Marxist view, people are
merely the creatures of their circumstances.
The second view is represented by Sigmund
Freud, Thomas Carlyle, and Max Weber, who
argued that, from time to time, shrewd, talented,
and charismatic figures emerge in society, captivate
and energize a significant following, and
then change history. Although writers such as
Herbert Marcuse (1969) have tried to integrate
the views of Marx and Freud, the history of
social theory over the past 100 years has been
the dialectic exchange between these two
perspectives.
We adopt the currently out-of-vogue view
that history is the history of social movements
led by individuals, for better or worse (as described
in the preceding). That is, we favor
explanations based on concrete personalities
rather than abstract social forces.
Defining Personality
Personality concerns two major elements: (a)
generalizations about human nature (what people
are like way down deep) and (b) systematic
accounts of individual differences (which differences
are important and how they arise).
With regard to generalizations, the pioneers of
personality psychology (e.g., Freud, Jung,
Adler, Horney, and Erikson) argued that the
most important generalization we can make is
that everyone is somewhat neurotic, which
means that the most important problem in life is
to overcome one’s neurosis. However, that generalization
is contradicted by the data; for example,
the base rate of neuroticism is too low to
be a generalized characteristic (Renaud & Estes,
1961). Moreover, the “good life” involves more
than the absence of pathology (Seligman &
Csikszentmihalyi, 2000).
On the other hand, a review of sociology,
anthropology, and evolutionary psychology
suggests an alternative generalization that, in
fact, is two related generalizations. First, people
always live in groups; we evolved as groupliving
animals. Second, every group has a status
hierarchy; there are people at the bottom, in the
middle, and at the top, and everyone knows who
is where. This suggests that the most important
problems in life concern getting along with
other people and achieving some measure of
status. We refer to these concerns as “getting
170 HOGAN AND KAISER
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along” and “getting ahead,” and individual differences
in these capabilities predict a wide
range of occupational outcomes (see J. Hogan
& Holland, 2003). It is also worth noting that
effective leaders are skilled at building relationships
and acquiring status.
To understand personality, the concept
should be defined from two perspectives: (a)
how a person thinks about him- or herself (i.e.,
a person’s identity) and (b) how others think
about that person (i.e., a person’s reputation). A
person’s identity concerns his or her most
deeply held beliefs, whereas a person’s reputation
is an index of his or her success in life.
Identity is hard to study, and we do not know a
great deal about it. In contrast, reputation is easy
to study and vastly consequential.
Our research indicates that it is important to
distinguish two aspects of reputation, which we
call “the bright side” and “the dark side.” The
bright side concerns the initial impression we
make on others—it reflects our social performance
when we are at our best—for example, in
a job interview or on a first date. The five-factor
model (Wiggins, 1996) is a taxonomy of the
bright side; it reflects how observers perceive
and describe others in the early stages of a
relationship (McAdams, 1995). The dark side
reflects the impression we make on others when
we let our guard down or when we are at our
worst, such as when we are stressed, ill, or
intoxicated. The bright side concerns the person
you meet in an interview; the dark side concerns
the person who actually comes to work. Dark
side tendencies typically coexist with well-developed
social skills that mask or compensate
for them in the short run. Over time, however,
dark side tendencies erode trust and undermine
relationships. Both the bright side and the dark
side of reputation can be studied through observer
descriptions, and most of the major outcomes
in life (jobs, promotions, relationships)
depend on reputation. Moreover, effective leaders
have distinctive reputations (as described
subsequently).
The Leadership Literature
Although the leadership literature is immense,
it can be effectively sorted into two
categories that we call the troubadour tradition
and the academic tradition. The troubadour tradition
is by far the larger and more popular
literature. It consists of such works as Leadership
Secrets of Attila the Hun (Roberts, 1990)
and the self-serving and account-settling memoirs
of former CEOs and politicians. Despite its
popularity, the troubadour tradition is a vast
collection of opinions with very little supporting
evidence; it is entertaining but unreliable.
In contrast, the academic tradition is a collection
of dependable empirical nuggets, but it
is also a collection of decontextualized facts that
do not add up to a persuasive account of leadership.
This is the result of two unfortunate
trends in earlier leadership research. The first
concerns the fact that leadership researchers
have historically ignored personality (Bass,
1990), and they have done so despite evidence
that personality has effects on leadership (see,
for example, Mann’s, 1959, conclusions as
compared with the reanalysis of his data by
Lord, DeVader, & Alliger, 1986). Second, researchers
have routinely defined leadership either
as standing out in a crowd or as occupying
a senior position in an organization. Both definitions
overlook the fundamental essence of
leadership.
Leadership Effectiveness
Leadership is usually defined in terms of the
people who are in charge of organizations and
their units; by definition, such people are leaders.
But reflect for a moment on the skills
needed to successfully negotiate the status hierarchy
of a large bureaucratic organization.
Think about the people who are in charge of the
organization where you work and try to find
examples of real leadership. The people who
rise to the tops of large organizations are distinguished
by hard work, intelligence, ambition,
political skill, and luck but not necessarily by
talent for leadership.
As an alternative way to conceptualize leadership,
think for a moment about human origins.
People evolved as group-living animals, because
there is safety in numbers. Over the 2
million years of human prehistory, the various
hominid groups were in competition for the
control of resources, and the competition was
typically quite savage. For example, when
Genghis Khan invaded Persia, he killed every
inhabitant (de Hartog, 2000). People are natu-
SPECIAL ISSUE: WHAT WE KNOW ABOUT LEADERSHIP 171
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rally selfish and inclined to pursue their shortterm
self-interest. Leadership involves persuading
people to set aside, for a time, their selfish
pursuits and work in support of the communal
interest. In the context of the violent tribal warfare
that characterized most of human history,
leadership was a solution for group survival;
leadership is a collective phenomenon (Avolio,
Sosik, Jung, & Berson, 2003, p. 287).
In our view, then, leadership should be defined
in terms of the ability to build and maintain
a group that performs well relative to its
competition. It follows that leadership should be
evaluated in terms of the performance of the
group over time. Our view is a radical departure
from the conventional wisdom of leadership
research. Most studies define leadership in
terms of emergence—the person in a group of
strangers who exerts the most influence—or in
terms of ratings of an individual “leader” by
more senior “leaders.” Although very few studies
have used indices of group performance as
the criterion for leadership,1 we believe this is
the most appropriate way to define and evaluate
leadership. With this definition in mind, we turn
to a discussion of what we know about
leadership.
What We Know About Leadership
The foregoing is the framework in terms of
which we conceptualize leadership. The remainder
of the article concerns the dependable
facts, what we know about leadership that is
empirically true. We think we can summarize
what we know in terms of seven points.
Competencies
Our first point concerns competency models.
The competency movement began with the
work of David McClelland (1973), a personality
psychologist with practical interests. McClelland’s
model was designed to identify competencies
that were specific to a particular job in a
particular organization, with no intention of
generalizing. The modern enthusiasm for competencies
seems to have taken off after the publication
in 1982 of a book by McClelland’s
colleague, Boyatzis, partly as a result of the
book’s appeal and partly as a result of widespread
dislike of traditional methods of job
analysis as applied to managerial work. The
competency movement spread rapidly and
quickly became chaotic and idiosyncratic. Our
first point is that every existing competency
model can be captured with the domain model
proposed by Hogan and Warrenfeltz (2003).
The model appears in Table 1.
In brief, this model identifies four broad
classes of managerial competencies: (a) intrapersonal
skills (regulating one’s emotions and
easily accommodating to authority), (b) interpersonal
skills (building and maintaining relationships),
(c) business skills (planning, budgeting,
coordinating, and monitoring business activities),
and (d) leadership skills (building and
motivating a high-performance team). We
would like to highlight three points about this
domain model. First, it is developmental: Intrapersonal
skills develop first, probably in the
preteen years; interpersonal skills develop next,
probably during the teenage years; business
skills develop when a person enters the workforce;
and leadership skills develop last. Second,
the model is a hierarchy of increasing
trainability, with intrapersonal skills being hard
to train and leadership skills being the easiest to
train. Third, the model is comprehensive; every
existing competency model can be organized in
terms of these four domains.
In addition to having a taxonomy of competencies,
we also have very good measures of the
key elements in these domains. There is solid
meta-analytic evidence showing that measures
of core self-esteem and measures of integrity
predict occupational performance in the .30–
.50 range (Judge & Bono, 2001; Ones, Viswesvaran,
& Schmidt, 1993). Similarly, measures
of interpersonal skill correlate in the .50 region
with performance in customer service and sales
jobs (Frei & McDaniel, 1998; Vinchur, Schippmann,
Switzer, & Roth, 1998). We can also
predict business skills using measures of cognitive
ability with equally good results (Schmidt
1 For example, in one of the first meta-analyses of leadership,
Lord et al. (1986) remarked that most leadership
researchers “have over generalized results from leadership
perceptions to the topic of leadership effectiveness” (p.
407). Although researchers are beginning to realize the
importance of defining leader effectiveness in terms of team
or unit performance, much work remains to be done on this
topic.
172 HOGAN AND KAISER
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& Hunter, 2004). Finally, we can predict various
aspects of leadership performance with validities
as high as .50 using multivariate regression
equations of normal personality (e.g.,
Hogan & Hogan, 2002; Judge, Bono, Ilies, &
Gerhardt, 2002). All of this means that we have
the assessment tools needed to identify potential
leaders; regrettably, these tools are rarely used
in selecting corporate executives (DeVries,
1993).
Implicit Models of Leadership
Earlier we stated that discussions of personality
should distinguish between identity and
reputation. Our second point is that we now
have a very clear view of the reputational elements
of leadership. Specifically, the literature
on implicit leadership theories suggests the
characteristics people look for in their leaders;
this research also tells us which of the positive
attributes listed by C. Peterson and Seligman
(2004) define effective leaders in the eyes of the
led. In order of importance, the four themes that
appear regularly in this literature—the leadership
virtues—are integrity, decisiveness, competence,
and vision (e.g., Kouzes & Posner,
2002; Lord, Foti, & DeVader, 1984).
Credibility as a leader depends vitally on
perceived integrity: keeping one’s word, fulfilling
one’s promises, not playing favorites, and
not taking advantage of one’s situation. The
most important question we ask of potential
leaders is, “Can we trust you not to abuse the
privilege of authority?” A meta-analysis conducted
by Dirks and Ferrin (2002) showed reliable
correlations between trust in one’s supervisor
and a range of positive leadership outcomes,
including improved job performance,
job satisfaction, and organizational commitment.
Like Caesar’s wife, people in leadership
positions must avoid even the appearance of
impropriety.
In addition, good leaders make good decisions
in a timely way. In times of crisis and
uncertainty, the most effective leaders make
prompt decisions (Vroom & Jago, 1988; Yukl,
1998, chap. 11). Naval historians are astonished
at the quality of Horatio Nelson’s decision making
under the almost unimaginably difficult and
confusing conditions of a sea battle (Pocock,
1987). But decisiveness is also important under
normal conditions. Mintzberg (1973) observed
that managers are involved in decision making
all day long, and the quality of their decisions
accumulates.
Table 1
The Domain Model of Competencies
Domain Definition and sample competencies
Intrapersonal Internalized standards of performance; able to control emotions and
behavior (courage and willingness to take a stand; career
ambition and perseverance; integrity, ethics, and values; core
self-esteem and emotional stability; patience; tolerance of
ambiguity)
Interpersonal Social skill role-taking and role-playing ability; talent for building
and maintaining relationships (political savoir faire, peer and
boss relations, self-presentation and impression management,
listening and negotiating, oral and written communications,
customer focus, approachability)
Business Abilities and technical knowledge needed to plan, budget,
coordinate, and monitor organizational activity (business acumen,
quality decision making, intellectual horsepower,
functional/technical skills, organizing ability, priority setting,
developing effective business strategy)
Leadership Influence and team-building skills (providing direction, support,
and standards for accomplishment; communicating a compelling
vision; caring about, developing, and challenging direct reports;
hiring and staffing strategically; motivating others; building
effective teams; managing diversity)
SPECIAL ISSUE: WHAT WE KNOW ABOUT LEADERSHIP 173
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Good leaders are also competent; they are a
contributing resource for their groups. In huntergatherer
tribes—which are ferociously democratic—
the head man is usually distinguished
from the group by superior hunting ability and a
broader moral perspective (see Boehm, 1999).
Expertise is needed for legitimacy and respect
from the team (French & Raven, 1959); the fact
that colleges and universities are typically led
by failed academics partially explains problems
with faculty morale.
Finally, good leaders are able to project a
vision, to explain to the group the purpose,
meaning, and significance of its key undertakings.
Napoleon noted that “leaders are dealers in
hope”; we would add that vision is their currency.
In addition, vision facilitates team performance
by clarifying roles, goals, and the way
forward (House, 1971). George H. W. Bush is
by all accounts a decent and likable man, but he
is utterly pragmatic in his thinking; before the
1992 election, he complained to his staff that he
did not understand “this vision thing,” which, of
course, is not what people want to hear from
potential leaders.
Good to Great
Most business books are empirical nonsense,
but Collins’s (2001a) book, Good to Great,
seems to be an exception. He and his staff
searched databases for the Fortune 1000 companies
to identify companies that had 15 years
of performance below the average of their business
sector and then 15 years of sustained performance
significantly above the average of
their sector. They found 11 companies that fit
this profile. The next question was, what distinguished
these 11 companies? Their somewhat
reluctant conclusion was that the distinguishing
feature was a new CEO who took charge of the
organization and then improved its performance.
These 11 CEOs all shared the same two characteristics
(above and beyond the four elements
described earlier; Collins, 2001b). First, they
were modest and humble, as opposed to selfdramatizing
and self-promoting. Second, they
were phenomenally, almost preternaturally, persistent.
These findings were a jolt to the business
literature (which had been promoting the
cult of the charismatic CEO), but we think they
make sense in terms of the data provided by
ethnographic studies of leadership (Boehm,
1999). In hunter-gatherer groups, the head man
is modest, self-effacing, competent, and committed
to the collective good. And if he is not,
he gets removed, sometimes quite violently.
Personality and Leadership
In the best study yet published on the links
between personality and leadership, Judge et al.
(2002) conducted a meta-analysis in which they
examined 78 studies of the relationship between
personality and leadership. They organized personality
in terms of the generally accepted taxonomy
of reputation, called the five-factor
model (Wiggins, 1996); this is a taxonomy of
the bright side of personality. The dimensions
of the five-factor model are Extraversion,
Agreeableness, Conscientiousness, Emotional
Stability, and Openness. (Emotional Stability
and Conscientiousness reflect the first element
of the domain model shown in Table 1, intrapersonal
skills; Extraversion and Agreeableness
concern the second domain, interpersonal skills;
and Openness, which is related to vision, anchors
the fourth domain, leadership skills.)
Judge et al. (2002) classified their leadership
criteria in terms of both emergence and effectiveness.
Their results showed that all five dimensions
were related to overall leadership
(emergence and effectiveness combined), with
true correlations of .24 or greater for each, except
for Agreeableness (.08). The multiple R
value for all five dimensions predicting emergence
was .53, and it was .39 for predicting
their criterion of effectiveness (see Hogan &
Hogan, 2002, and Lord et al., 1986, for similarly
strong relationships between leadership
and personality).
Does Leadership Matter?
It is useful to know that personality predicts
indices of leadership effectiveness, but does
leadership actually matter in terms of the performance
of an organization? And, if it does,
then what are the mechanisms? The answer to
the first question is yes; the relevant data come
from studies of the economic utility of senior
managers. For example, Joyce, Nohria, and
Roberson (2003) reported that CEOs account
for about 14% of the variance in firm perfor-
174 HOGAN AND KAISER
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mance. To put this number in perspective, industry
sector accounts for about 19% of that
variance (McGahan & Porter, 1997). In addition,
Barrick, Day, Lord, and Alexander (1991)
showed that, relative to executives with average
performance, high performers provide an additional
$25 million in value to an organization
during their tenure (see also Day & Lord, 1988,
and Thomas, 1988, for evidence regarding the
financial impact of leaders on organizations).
Concerning the question of how leaders influence
the performance of their organizations,
the general model is that leader personality influences
the dynamics and culture of the top
management team, and the characteristics of the
top management team influence the performance
of the organization. Two very interesting
articles provide data to support these themes. In
the first, R. S. Peterson, Smith, Martorana, and
Owens (2003) used data from CEOs of 17 very
large corporations (e.g., IBM, Coca-Cola, Disney,
Xerox, CBS, Chrysler, and General Motors)
to show that CEO personality powerfully
affects the dynamics and culture of the top
management team, with correlations in the .50
range for most hypothesized relationships between
personality and various aspects of team
functioning (e.g., cohesiveness, corruption, and
risk tolerance). Moreover, the characteristics of
the top management team were substantially
correlated with business outcomes such as income
and sales growth, return on investment,
and return on assets.
In the second article, Harter, Schmidt, and
Hayes (2002) reviewed the literature on employee
satisfaction and showed that satisfaction
means, in essence, satisfaction with supervisors.
That is, how employees view their supervisors
is the primary determinant of their overall satisfaction.
Then, in a meta-analysis, including
198,514 employees from 7,939 business units,
they showed that employee engagement and
satisfaction, at the business-unit level, correlated
.37 and .38, respectively, with a composite
index of business-unit performance that included
turnover, customer loyalty, and financial
performance.
Putting these various studies together, we see
that (a) personality predicts leadership style
(who we are determines how we lead), (b) leadership
style predicts employee attitudes and
team functioning, and (c) attitudes and team
functioning predict organizational performance.
This model linking leader personality to organizational
performance is portrayed in Figure 1.
Managerial Incompetence
Although the literature on managerial competence
is sparse and fragmented (but growing),
the literature on managerial incompetence is
remarkably coherent. The problem is very important;
survey after survey shows that 65%–
75% of the employees in any given organization
report that the worst aspect of their job is their
immediate boss. Estimates of the base rate for
managerial incompetence in corporate life
range from 30% to 75%; a recent review reported
the average estimate to be 50% (DeVries
& Kaiser, 2003). Historically, managerial incompetence
has been conceptualized in terms of
not having the characteristics needed for success,
that is, too little of the right stuff. We
believe that failure is related more to having
undesirable qualities than to lacking desirable
ones, that is, having the wrong stuff.
Bentz (1985) pioneered the study of managerial
incompetence with an interview study of
failed managers at Sears; he noted that virtually
all of them had a “personality defect” of some
Figure 1. How leader personality affects organizational performance.
SPECIAL ISSUE: WHAT WE KNOW ABOUT LEADERSHIP 175
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sort. Bentz’s findings were then replicated by
researchers at the Center for Creative Leadership
(McCall & Lombardo, 1983) and others.
Leslie and Van Velsor (1996) summarized the
literature on failed managers in terms of four
themes: (a) poor interpersonal skills (being insensitive,
arrogant, cold, aloof, and overly ambitious),
(b) unable to get work done (betraying
trust, not following through, and being overly
ambitious), (c) unable to build a team, and (d)
unable to make the transition after a promotion.
After reviewing this literature, Hogan and
Hogan (1997) proposed that the standard personality
disorders, as described in the Diagnostic
and Statistical Manual of Mental Disorders
4th edition (DSM–IV; American Psychiatric Association,
1994), provide a taxonomy of the
most important causes of managerial failure.
Personality disorders are not forms of mental
illness; they are dysfunctional interpersonal dispositions
that (a) coexist with talent, ambition,
and good social skills and (b) prevent people
from completing the essential task of leadership:
building a team. These dysfunctional dispositions
are what we described earlier as the
dark side of personality. Hogan and Hogan developed
an inventory of the 11 key dimensions
of the dark side using the DSM–IV Axis II
personality disorders as a guide. The inventory
is intended to predict managerial failure, and
subsequent research shows that it does (Hogan
& Hogan, 2001). This taxonomy is presented in
Table 2.
There are three points to note about these
dark side characteristics. First, they are hard to
detect, for two reasons. On the one hand, they
coexist with well-developed social skills
(Hogan & Hogan, 1997, 2001). On the other
hand, these tendencies, although flawed, are intended
to make a positive impression on others,
and they do in the short run. For example,
people with high scores on the Bold scale (narcissism)
initially seem confident and charismatic.
Over time, however, these features turn
into a sense of entitlement and an inability to
learn from mistakes. Paulhus (1998) reported
that, in an unstructured group task in which the
participants are strangers, narcissism predicts
making a strong initial impression and being
nominated as a leader but subsequently being
rejected by the group as a result of arrogance
and high-handedness. Indeed, Baumeister and
Scher (1988) reported that the distinguishing
feature of most forms of self-defeating behavior
is the pursuit of short-term gains that carry
significant long-term costs (see Table 2 for
other examples of this dynamic).
Second, although high scores on the 11 dark
side dimensions shown in Table 2 are associated
with negative consequences in the long run, low
scores are not necessarily desirable either; this
is what makes personality psychology so interesting.
Low levels of dutifulness suggest problems
with authority; low levels of imaginativeness
suggest lack of vision; low levels of boldness
suggest indecisiveness; and so on.
Optimum performance is associated with more
moderate scores. Kaplan and Kaiser have applied
this reasoning to executive assessment;
their data clearly show that there is an optimal
level for most managerial behaviors (e.g.,
Kaplan & Kaiser, 2003).
The third point concerns how executive selection
decisions are made (Sessa, Kaiser, Taylor,
& Campbell, 1998). Most formal selection
tools are rarely used. Former subordinates—
those who are best able to report on a person’s
talent for leadership—are almost never consulted.
Often new executives are recruited from
outside the organization, making it even more
difficult to evaluate the candidate appropriately.
The most common selection tool is an interview,
and the dark side tendencies are designed
to create favorable immediate impressions; narcissists
and psychopaths excel during interviews.
We speculate that many executives are
hired for the very characteristics that ultimately
lead them to fail.
Organizational Effectiveness
The professional literature in psychology has
very little to say about the determinants of organizational
effectiveness. Perhaps the bestknown
treatment of the subject is provided by
Katz and Kahn (1978). After noting how complicated
the subject is, Katz and Kahn suggested
defining organizational effectiveness idiographically,
in terms of how efficiently an organization
converts its resource inputs into outputs.
This definition is internally consistent but
ignores the fact that organizations are in competition
with one another.
176 HOGAN AND KAISER
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Table 2
Dimensions of Managerial Incompetence
Dimension Axis II disorder Definition Short-term strength(s) Long-term weakness(es)
Excitable Borderline Moody, intense, easily annoyed by people
and projects; fails to follow through
Energetic and enthusiastic Displays outbursts and emotional
volatility
Cautious Avoidant Reluctant to take risks as a result of
being criticized
Makes few mistakes Indecisive and risk averse
Skeptical Paranoid Cynical, mistrusts others’ intentions,
argumentative and combative
Insightful about organizational
politics
Mistrustful, vindictive, litigious
Reserved Schizoid Aloof and uncommunicative, insensitive
to others’ feelings
Tough and resolute under pressure Uncommunicative and
insensitive to morale issues
Leisurely Passive–aggressive Overtly cooperative, privately
procrastinating, stubborn, resentful of
requests for increased performance
Charming with good social skills Displays passive–aggressive
meanness
Bold Narcissistic Excessively self-confident; exhibits
grandiosity and entitlement; unable to
learn from mistakes
Courageous, confident, charismatic Unable to admit mistakes; sense
of entitlement
Mischievous Antisocial/psychopathic Excessively takes risks and tests limits;
bright, manipulative, deceitful, cunning,
and exploitive
Willing to take risks, charming Lies, defies rules and authority,
exploits others
Colorful Histrionic Expressive, animated, and dramatic;
wants to be noticed and the center of
attention
Entertaining, flirtatious, engaging Impulsive, attention seeking;
manages by crisis
Imaginative Schizotypal Acts and thinks in creative but sometimes
odd or eccentric ways
Displays visionary outside-the-box
thinking
Fanciful; displays over-the-top
vision, erratic decision making
Diligent Obsessive–compulsive Meticulous, precise, perfectionistic,
inflexible, intolerant of ambiguity
Hard working; has high standards;
self-sacrificing
Overcontrolling, rigid,
micromanaging
Dutiful Dependent Conforms and is eager to please superiors Team player; considerate; keeps
boss informed
Indecisive, overly concerned
about pleasing superiors
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Our final point does not concern a reliable
empirical generalization about leadership;
rather, it proposes a model for conceptualizing
organizational effectiveness. However, organizational
effectiveness is an organic part of any
discussion of leadership when leadership is seen
as a collective phenomenon, a resource for the
performance and survival of a collectivity. In
our view, organizational effectiveness can be
conceptualized in terms of five components.
The first component of organizational effectiveness
is talented personnel. Other things being
equal, a more talented team will outperform
a less talented team. Talented personnel are
identified through good selection methods and
recruited through good leadership. The second
component of organizational effectiveness is
motivated personnel: people who are willing to
perform to the limits of their ability. Other
things being equal, a motivated team will outperform
a demoralized team. The level of motivation
in a team or organization is directly
related to the performance of management (Harter
et al., 2002).
The third component of organizational effectiveness
is a talented management team, with
talent defined in terms of the domain model
presented in Table 1 (and incompetence defined
in terms of the taxonomy presented in Table 2).
The fourth component is an effective strategy
for outperforming the competition. This is
where many organizations have problems. An
effective strategy depends on systematic research
and a deep knowledge of industry trends.
But business managers do not enjoy research
(otherwise, they would be in the research business),
and people who enjoy research do not
talk frequently with business managers. As a
result, business strategy is often developed on
an ad hoc basis by top management teams (think
about the strategy that has been instituted at
your place of employment and how it was
developed).
The final component of organizational effectiveness
is a set of monitoring systems that will
allow senior leadership to keep track of the
talent level of the staff, the motivational level of
the staff, the performance of the management
group, and the effectiveness of the business
strategy. It is the responsibility of the senior
leadership in an organization to put these five
components in place. Ultimately, then, good
leadership is the key to organizational effectiveness.
Consequently, every organization makes
hiring mistakes, every organization alienates at
least part of its workforce, every organization
has its share of bad managers, many organizations
pay only lip service to strategy formulation,
and many organizations fail to monitor
their own performance in these key areas. Thus,
every organization has its inefficiencies. As
Pericles said to the elders of Athens on the eve
of their cataclysmic war with Sparta, “I care less
about the Spartans’ strategy than I do about our
mistakes.”
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Received June 24, 2004
Accepted September 25, 2004
180 HOGAN AND KAISER
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