Seminar

At the Helm, Kirk or Spock? Why Even Wholly Rational Actors May Favor and Respond to Charismatic Leaders

Benjamin E. Hermalin (University of California - Berkeley)

March 17, 2014, 14:00–15:30

Room MF 323

Industrial Organization seminar

Abstract

Leaders are often able to reach at least some followers at an emotional level. But many followers could be rational and recognize a leader’s emotional appeals are likely hiding vital information. Despite such rational pessimism, this paper shows that wholly rational followers will nevertheless work harder when they hear an emotional appeal from a more charismatic leader than a less charismatic one. Further, they will often prefer a more charismatic leader— one more inclined to make emotional appeals—to a less charismatic one. Although conditions exist such that an organization as a whole does better with a more rather than less charismatic leader, more charisma is not always good: more charismatic leaders face greater temptation to substitute charm for substantive actions, to the organization’s detriment. The paper, thus, offers insights into the mixed assessment of charisma in the empirical and management literatures. Keywords: leadership, charisma, identity