Charismatic Leadership Theory

Charismatic Leadership TheoryT

he Charismatic Leadership Theory (CRL) is a theory about leadership developed by Michael E. Porter and Joseph E. Slater in a series of books beginning with Managing the New Dynamics of Competition: Strategies for Success (Porter and Slater, 1984).

Their original inspiration was a discussion between Porter and Marcel Bénabou about the leadership styles of Richard Nixon, John F. Kennedy, and Nikita Khrushchev.

They made the mistake of using the word “chaos” to refer to these different leadership styles.

The book “Managing the New Dynamics of Competition: Strategies for Success” by Porter and Slater was first published in 1984, and in it, Porter and Slater introduced the original term “charismatic leadership”, in the context of four facets of leadership.

There is a fundamental tension in the theory between the two ways of taking a long view of competition: e.g., by putting together a series of competitive advantages, and by developing a strategy to achieve world domination, according to the latter.

More recent works by Porter have tended to place greater emphasis on the former strategy.

One of Porter and Slater’s major ideas is that successful companies must create a distinctive product or service to capture a meaningful market share in a new industry.

The “core competencies” of the “pioneers” (leaders) of a new industry are important for understanding the competitive dynamics of an industry.

Champions (or early pioneers) act as “ideal entrepreneurs”, building and managing the initial stages of the industry.

There are two primary forces that propel the initial competitive dynamics of a new industry:

According to Porter and Slater, since the initial stages of a new industry are difficult, entrepreneurship requires qualities beyond traditional business success.

The concept of competitive advantage is central to the book.

According to the authors, the concept of competitive advantage is closely related to the concept of life cycle management.

CFOs (Chief Financial Officers) in large corporations must be able to establish the appropriate business model and rationalize cash allocation at all levels of the organization.

In order to do this effectively, they need to understand how to create a competitive advantage for the corporation in terms of cash flow.

Porter and Slater differentiate between:

The “circuit model” of competition was developed by Michael Porter and Joseph Slater and developed further by others, including Gerald B. Cutler, in the latter part of the 1980s.

Each competitor has a “circuit”, which connects to the “crossover points” of that competitor’s “circuit”.

Closest to the “crossover points” are the “criteria for success”.

An organization that satisfies the criteria for success is identified as “having an essential competitive advantage”, which may be improved by exploiting a product, service, or geographic position.

A competitor that successfully exploits the criterion for success through innovation is referred to as a “competitor”, not a “victim” or “suspect”.

The main concept of strategy in Porter and Slater’s model is “delegating authority” or “reciprocity”.

In this model, the successful organization is able to foster cooperation and give, give and give authority to its key “pioneers”, without any limit on how much authority is given to the pioneers.

As a result of this, the innovators grow their authority and capture more market share.

The introduction of innovation and competition further the “power base” that defines the fundamental competitive advantage of the organization.

This power base defines the value of the organization and how others perceive it.

At each moment of competitive advantage, the “strength” of the power base increases.

This power base is accumulated during the competitive advantage phase, or during the monopoly phase, but is generally spread thin across the organization.

Porter and Slater maintain that the key to success is to be able to “delegate authority to early, strong pioneers”, which is when they achieve the greatest authority.

The pioneers are those key innovators that have the ability to create the most value for the organization and must be able to quickly assess the situation and act with sufficient authority.

The model is used in a number of “pioneer” firms, most famously Amazon.

The governing principle in this model is reciprocity, which Porter and Slater call “the exchange of resources”.

When a pioneer has an “intellectual asset”, which may be a new idea or a new technique, it must share the asset with someone else.

Someone must receive the idea in return for his/her use of the idea.

Porter and Slater define this as “delegating authority” or “reciprocity”.

Delegating authority to early, strong pioneers improves the organization’s power base because it enables the organization to grow quickly, seizing market share.

As a result, the organization can achieve the highest returns for its capital.

Also, the more pioneers are effective, the more the organization has to invest in each of them, making it increasingly likely that someone will break through and become a powerful pioneer, further increasing the advantage for the organization.

However, reciprocity is not absolute.

The organization has the ability to withhold authority and to “clawback” it when it believes that the pioneer has misused its authority.

To do this, the organization must have clearly defined authority.

They will need to define the authority of each individual pioneer, including the degree of authority that the pioneer has over those below him/her, and define a quantifiable measure of quality.

The innovation of these pioneers and their subsequent innovativeness is therefore important for the “legitimation” of their authority.

When trying to optimize innovation, the organization must be very clear about who has the power and how that power is distributed among individuals.

Also, the organization needs to have a mechanism to mitigate challenges from other organizations, including:

In the strategy of several prominent organizations, reciprocity is “shared”: it is shared between all individuals and groups within the organization, as well as between the organization and external organizations.

The main organization that is described as a “competitor” in the late 1970s Bell System, where the “experts” who made the key decisions were senior executives who had built the “old organization”, and the managers of the new organization were “insiders”.

Cultural companies are seen as having an equal power base, with power only divided by competence.

This is distinct from the “autarchic” model of innovation, in which the power base is shared among a few key innovators who are experts.

The differentiation is based on the “non-expert” group’s ability to fulfill the social and personal goals of the “expert” group.

The most famous organization that is differentiated from the autarchic model of innovation is McDonald’s, where power is shared between many non-expert managers who interact in a “commonsense” manner.

Diversity is also important in this model.

Venture capitalists (VCs) invest in diversity.

They tend to invest in firms that show high levels of performance and demonstrate a willingness to look outside the organization to attract and recruit innovators.

Other organizations have tried to solve the problem of reciprocity by formalizing the process.

At first blush, this looks like a good idea.

But innovation theorists such as Porter and Slater argued that the institution of a “reciprocal authority” system is inherently ambiguous, and this ambiguity leads to poor performance.

A better solution is to devise a unique system for the entire organization to follow.

The genius of Amazon is that it has formalized an organization-wide innovation system.

The key innovation of the organization is based on process, which is then optimized through the use of formal processes.

Since innovation is done in teams, the organization has a unique process for coordinating all the processes that are needed for a given innovation.

Then it relies on general-purpose (rather than restricted) roles for individuals, to take the place of functional roles.

What is Charisma in Leadership?

“Charisma is the ability to get others to do what you want them to do or become as you desire them to be.”

Charm and presence go hand-in-hand. Charisma is a powerful tool in making other people feel comfortable and at ease around you. By putting on a person’s aura, you are able to understand their emotional state and therefore be able to interact with them.

Your presence can make people feel accepted and heard. Your presence, your presence of yourself as a person, makes people happy. The more comfortable and outgoing you are, the more confident they will feel around you. If you’re shy, most people won’t take the time to interact with you.

There are other things you can do that increase your ability to read people’s moods. Hugs are very calming and get others’ energy up. The opposite of that is strong body language that sends a message that you are angry or have something to say, which shuts down the person you’re with.

Final Thoughts on Charismatic Leadership Theory

There are multipl of leadership styles and theories. Charisma or the concept of being charismatic allows the leader to influence people by their charisma. Nevertheless, for some it may be easy, others it may come to them harder were training or developing will be needed. 

Do you want to learn more about charisma? Check out these Best Books on Charisma.

This page may contain affiliate links. This website may contain content that comes from Amazon. This website and its pages are not intended to constitute legal, financial, or tax advice. The information on this website and its pages are not intended to constitute investment advice and all content are the views and opinions of the author(s), contributors, or administrators. Please read our disclaimer for more info.

Wealth Mindset Books - Sale
How do I Become a Successful Business Coach?

How do I Become a Successful Business Coach?

ecoming a business coach is a challenging and rewarding career. As a business coach, you help other professionals grow their businesses. It’s a role that requires extensive knowledge of the industry and strong listening skills. Business coaching...

read more
What is an Entrepreneur Coach?

What is an Entrepreneur Coach?

n entrepreneur coach is someone who works specifically with entrepreneurs to help them achieve their business goals. An entrepreneur coach does this by looking at an individual’s strengths and weaknesses and then devising a plan for how the...

read more
Do Companies Hire Coaches?

Do Companies Hire Coaches?

oaching is a trust-based relationship between two people who want to help each other grow. Coaches offer guidance, accountability, and insight that can be difficult to get from friends, family, or colleagues. But do companies hire coaches? Yes!...

read more
What is a Small Business Coach?

What is a Small Business Coach?

s a new CEO, you’re stepping into a role you’ve never played before. You are the leader of an organization with its own culture and set of people who expect you to know everything. But so much of what you know is as a former employee in your...

read more
How Much is a CEO Coach?

How Much is a CEO Coach?

s a new CEO, you’re stepping into a role you’ve never played before. You are the leader of an organization with its own culture and set of people who expect you to know everything. But so much of what you know is as a former employee in your...

read more
What are the 3 Types of Coaching Styles?

What are the 3 Types of Coaching Styles?

here are various coaching styles one can adopt as a coach. While each of these has its own merits, and when used at the right time and in the right context, they all have the potential to be effective in different situations. Coaching is not a...

read more
How do Business Coaches Make Money?

How do Business Coaches Make Money?

usiness coaches are a niche profession that is growing rapidly. Business coaching helps businesses achieve their goals by working one-on-one with company executives to develop solutions tailored to their needs. Coaching sessions focus on strategy,...

read more
What Problems do Business Coaches Solve?

What Problems do Business Coaches Solve?

ou’ve heard it before… You need a coach to help you see the forest instead of the trees. A coach helps you see where you are stuck, or perhaps they will notice your blind spots. A coach is an objective advisor with no ego, that can make you...

read more
What do the Best Business Coaches Do?

What do the Best Business Coaches Do?

re you ready to take your business to the next level? A business coach can help you do that. A coach is someone who has been in your shoes and understands what it takes to succeed. They are a neutral third party with no other agenda than to help...

read more
Is a Business Coach Worth It?

Is a Business Coach Worth It?

s a small business owner, you have more responsibilities than just running your company. From hiring the right team to managing finances and marketing, there are a lot of moving parts. To help manage stressors and avoid burning out, many small...

read more
How Much Should a Business Coach Cost?

How Much Should a Business Coach Cost?

ecoming a successful business owner is hard work. Even the most driven and determined individuals can find it difficult to keep up with all that needs to get done. This is why many small business owners hire coaches to help them stay on track and...

read more
What does a Business Coach Do?

What does a Business Coach Do?

 business coach is someone who helps you succeed by giving you unbiased advice, ongoing accountability, and insight into your personal strengths and weaknesses as an entrepreneur. They’re there to keep you on track and give you a fresh...

read more
What is a Career Development Goal?

What is a Career Development Goal?

hen you’re in a job that doesn’t align with your future career aspirations, it can be hard to figure out what your next steps should be. In fact, many people continue to struggle when it comes to figuring out how to get from point A (their current...

read more
What is Career Development Plan?

What is Career Development Plan?

areer development is the process by which employees grow and reach their potential over time. It can be challenging to maintain peak performance, especially as an employee navigates different projects and milestones in their career. Career...

read more
What is Career Development Stages?

What is Career Development Stages?

areer development is the process by which employees grow and reach their potential over time. It can be challenging to maintain peak performance, especially as an employee navigates different projects and milestones in their career. Career...

read more
What are Career Development Skills?

What are Career Development Skills?

veryone wants to land a job they love and is passionate about. But most people find it challenging to get a job that aligns with their career goals. In fact, the skills gap is one of the biggest issues when it comes to hiring and retaining quality...

read more
What is the Hardest Job on Earth?

What is the Hardest Job on Earth?

verybody has to work at some point in their life. It is fair to say that some jobs are harder than others, but which ones exactly? There are many different fields of work, from healthcare and education to sales and construction. Each job will have...

read more
What Easy Jobs Make 100K a Year?

What Easy Jobs Make 100K a Year?

ne of the most common questions about jobs that pay well is “How can I get a job like that?” But what you may not realize is that getting a job like that isn’t always as easy as it seems. Becoming an engineer or a surgeon, for example, takes years...

read more
What is a Fun Career?

What is a Fun Career?

here are so many career options out there, that it can be hard to know where to start. When looking for a new job, you might find yourself asking things like “What kind of career should I have?” or “What is a fun job?” But what exactly makes a...

read more
What Is The Easiest Well-Paying Job?

What Is The Easiest Well-Paying Job?

here are plenty of jobs that pay well, but many of them require extensive training, education, and experience. Unless you have a group of specialized skills or a lot of time to invest in training, it can be difficult to find a well-paying job...

read more
What are Good Careers to Change?

What are Good Careers to Change?

hile there are people who lead happy and fulfilling lives without ever changing their jobs, there are others who feel an itch that needs to be scratched. They may love the work they do, but they’re not satisfied with where they are in their...

read more
What is the Best Career to Retrain For?

What is the Best Career to Retrain For?

ou’ve passed 35 and decided to re-train. But what do you do next? You’re not fresh out of high school, nor are you able to go back to college again. That leaves you with a limited set of options when it comes to retraining. So, what should you do...

read more
How Do I Start a New Career at 35?

How Do I Start a New Career at 35?

eing in your mid-30s and feeling stuck in your career is a very common problem. You might have been waiting for the perfect opportunity to come along, or you might have felt like something was missing from your life for a while. Whatever the case...

read more
What is World Without Waste?

What is World Without Waste?

FDA, or the Council of Fashion Designers of America, is the main organization representing and supporting the fashion industry in the United States. Every year, they host the CFDA Awards. The CFDA Awards are the fashion industry’s top accolade....

read more
Is Zara Greenwashing?

Is Zara Greenwashing?

FDA, or the Council of Fashion Designers of America, is the main organization representing and supporting the fashion industry in the United States. Every year, they host the CFDA Awards. The CFDA Awards are the fashion industry’s top accolade....

read more
Is Greenwashing a Crime?

Is Greenwashing a Crime?

he term “greenwash” refers to the efforts of companies to appear environmentally friendly without actually doing anything to improve the environmental sustainability of their operations. That’s not the sort of thing that a company would want the...

read more
Who Created Greenwashing?

Who Created Greenwashing?

reenwashing is the act of a company marketing itself as environmentally friendly when in reality, it is not. It is often a method used by companies to hide the negative effects their products have on the environment. It’s a deceptive practice that...

read more
Why Do Companies Greenwash?

Why Do Companies Greenwash?

‍he concept of a sustainable lifestyle is all the rage these days. Virtually every article, blog post, and news story you’ll read about sustainable living inevitably touches on the topic of sustainability. And with good reason. A...

read more
Is Eco-Friendly?

Is Eco-Friendly?

he past few years have witnessed a sea change in the global consciousness about the environment. People are now more conscious of the impact of their actions and choices on the environment. At the same time, the green movement has also become a...

read more
Where Can I Read Sustainability?

Where Can I Read Sustainability?

nterest in sustainability is higher than ever. That’s because it is becoming a more common topic of conversation. More people are joining the movement to live more sustainable, green lifestyles. With this increase in interest, you can find almost...

read more
Why is Sustainable Living Important?

Why is Sustainable Living Important?

ccording to the U.S. Environmental Protection Agency, sustainability is the ability to provide for the needs and wants of current and future generations. Living sustainably is a concept that’s gaining more and more popularity and acceptance across...

read more
What are the 4 types of Planning?

What are the 4 types of Planning?

he first step to business success is to decide how to define success for the company. In many cases, businesses aren't clear on what exactly they want to achieve, and this can lead to confusion as well as frustration when goals are not met....

read more
What do you Mean Planning?

What do you Mean Planning?

lanning is all about decisions. There are lots of them, they happen every day, and each one has the potential to affect the future in some way. We should be good at making good decisions and we can't always be good at that. Planning helps us get...

read more
What are Some Types of Systems?

What are Some Types of Systems?

 system is a collection of parts that work together to achieve a common goal. Systems can be physical or open, probabilistic or deterministic, and man-made or natural systems. Best Books on Systems and Planning What is a system? The term ‘system’...

read more
What is a System Selection Report?

What is a System Selection Report?

 system selection report (SSR) is a graphical report that helps you select the best systems for your business. An SSR is a vital tool for system administrators and decision-makers. It provides a snapshot of the state of your system, including the...

read more
What is a System Plan?

What is a System Plan?

 system plan is a critical input to the design phase, which focuses on selecting the right hardware and software components, determining how they will be configured, and identifying security and management requirements. Best Books on Systems and...

read more
What is Sustainability in Farming?

What is Sustainability in Farming?

ustainability is an approach to the environment that seeks to meet human needs without depleting or degrading the environment. It’s a process of caring for and making choices that are sustainable from a human and environmental perspective. The...

read more
What Makes Something Sustainable?

What Makes Something Sustainable?

ustainability is a term used to describe something that is able to provide for its own needs and keep going without compromising the ability of future generations to meet their own needs. That’s a lot to think about! If you want to know if...

read more
What is Towards a Sustainable World?

What is Towards a Sustainable World?

n order to build a sustainable world, it is important to take the right steps. This article will cover those steps and why they are important. It will also cover the importance of sustainability and humanity’s destructive behaviors. Best Books on...

read more
What Makes a Sustainable Future?

What Makes a Sustainable Future?

hat does a sustainable future look like? It's hard to predict the future, but we can make educated guesses. A sustainable future will include a combination of social and environmental factors that are not detrimental to the next generation. Best...

read more
Is Sustainable Living Expensive?

Is Sustainable Living Expensive?

any people think sustainable living is expensive. However, there are many things that can be done to save money while living sustainably. Organic produce and using cloth diapers are two examples that are less expensive than buying the same item in...

read more
What is System Planning?

What is System Planning?

 system plan is a planning tool that helps you understand your business and its parts. By creating a system plan, you can improve efficiency and effectiveness in your business. In addition, a system plan can help you identify potential problems...

read more
What is System Planning in MIS?

What is System Planning in MIS?

n this comprehensive guide, you will learn about the different aspects of system planning in MIS, how it can be used to improve your organization's performance, and how it can be used to understand your data and assets. Best Books on Task...

read more
What is the Role of System Planning?

What is the Role of System Planning?

ask management tools are a type of software used to manage and track tasks. They can be used for any purpose, such as scheduling and tracking work, but they are most commonly used in the business world. Task management tools come in different...

read more
How Do You Track Tasks at Work?

How Do You Track Tasks at Work?

racking tasks at work is a great way to get things done. Not only does it help you stay organized, but it also helps you identify potential problems and solutions early on. In this guide, we’ll discuss the best ways to track tasks and get started....

read more
How Do You Manage a Team Task?

How Do You Manage a Team Task?

Managing a team is one of the most important skills you can have as an entrepreneur. When it comes to managing a team, there are a few things that you should keep in mind. Here are some tips on how to manage a team task successfully: Best Books on...

read more
How Do You Handle Tasks?

How Do You Handle Tasks?

andling tasks better are important for both personal and professional success. It can help you get things done more quickly, and it can help you feel more satisfied with your work. However, there are a few key things to keep in mind when handling...

read more
How do you Approach a Task Manager?

How do you Approach a Task Manager?

o one likes a hassle. That’s why it’s important to find the right task manager before you even start working on your project. Task managers make it simple and efficient for you to complete your projects, without having to worry about tedious or...

read more
What are the 3 Project Control Methods?

What are the 3 Project Control Methods?

n order to achieve great results, it’s important to have a clear goal. Whether it’s getting into shape, increasing your productivity, or becoming more successful in life, setting goals is key. However, setting goals can be difficult. There are so...

read more
Is Wind Energy Sustainable?

Is Wind Energy Sustainable?

ind energy is often touted as a sustainable energy source. It’s efficient and cheap, and it doesn’t produce any emissions. But can wind energy really be sustainable? In this comprehensive guide, we answer the question: Is wind a sustainable energy...

read more
Why Green Energy is Sustainable?

Why Green Energy is Sustainable?

reen energy is sustainable because it’s cost-effective, it emits no pollutants, and it’s environmentally friendly. To be sustainable, green energy needs to be affordable, reliable, and clean. Here are some of the reasons why green energy is a...

read more
What is the Greenest Energy Source?

What is the Greenest Energy Source?

he term “green energy” has become a popular catchphrase, especially in recent years. However, when you actually think about it, most people would probably answer that wind or solar power is the greenest form of energy. After all, these are...

read more
Is Self-Sustaining Energy Possible?

Is Self-Sustaining Energy Possible?

ave you ever heard of self-sustaining energy? It’s a phrase that’s been around for a while, but it recently got a lot of attention because of Tesla’s new car. In order for a car to run on its own power, it needs to be fueled by something other...

read more
What is the Idea of Sustainability?

What is the Idea of Sustainability?

ustainability isn't just a big word that everybody likes to use. It's about making sure you're doing things right in a sustainable way. Starting from a pure eco-systems concept in the 1970s and in the World Conservation Strategy, it transformed...

read more
How Sustainable is Renewable?

How Sustainable is Renewable?

t's a good question as to whether renewable energy is sustainable. In fact, many people don't realize that many of our modern conveniences, like the computer and phone you're reading this on, are powered by fossil fuels. These are often not even...

read more
What is the Cleanest Form of Energy?

What is the Cleanest Form of Energy?

he sources of clean energy are considered to be green power (solar, wind, biomass, and geothermal). While green power is still viewed as clean and renewable, it is not considered to be “pure” in its source – which can pose problems if it is...

read more
How Can Energy be Sustainable?

How Can Energy be Sustainable?

There are so many ways to be energy efficient, but one of the most important ways is to use renewable energy. Renewable energy is the power that comes from natural resources, like water, wind, and solar. It's a more sustainable way to generate...

read more
What is Meant by Sustainable Energy?

What is Meant by Sustainable Energy?

ustainable energy is a growing area of study as we try to understand how to best use our planet's natural resources. This includes energy sources that do not harm our environment and that are still available. Renewable energy is one of the best...

read more
How Do You Manage Daily Tasks?

How Do You Manage Daily Tasks?

asks are a necessary part of our lives, but they can be difficult to manage. If you’re trying to get things done in an efficient and effective way, here are eleven tips to help you manage your tasks better. Best Books on Task Management Find a...

read more
Why is Task Management Important?

Why is Task Management Important?

here are so many demands on our time, and managing them all can be difficult. But task management is a crucial part of any successful business. Without a good task management system, it can be hard to stay organized and ensure that your work is...

read more
How Can You Improve Productivity?

How Can You Improve Productivity?

ask management is really just the ability to identify, organize, and complete tasks, in whatever form they may take. This can include planning and strategizing, tracking and checking tasks, prioritizing and delegating tasks. Beyond the tasks...

read more
What is Total Float?

What is Total Float?

he total float is the amount of work that can be delayed without delaying the project completion date. If the total float extends too far into the future, the project completion date is pushed out beyond the time when the project must be...

read more