Mgmt 5703 - Charismatic Leadership and Nonprofit Organizational Performance

Charismatic Leadership and Nonprofit Organizational Performance

November 19, 2011

Daniel Brown and Sheryl Smith

Cameron University

MGMT 5703

Organizational Behavior

Dr. Hite

Introduction

Charismatic leadership in nonprofit organizations can be a stimulus for the fulfillment of the organization's mission and vision set forth by the leader and its Board of Directors. Top leaders in nonprofit organizations must exhibit a strong sense of commitment and passion for the mission to ensure that the programs and policies of the organization are implemented and adhered to according to the regulations required by the various funding sources. Most of the revenue received by nonprofit organizations are issued in the form of grants (federal, state, local), and private donations from individual donors and foundations. As a result, it is imperative that the style of leadership demonstrated in nonprofit organizations fits the culture and mission of the agency and the population in which it serves. A charismatic leader can have a profound influence on the level of commitment by mid-level management in accepting the vision. As a result, mid-level management will strive to meet or exceed that high level of commitment by generating resources for the organization through grant revenue that will provide services to those in need thus fulfilling the desired vision of the charismatic leader.

The Leadership structure of most nonprofit organizations consists of a Board of Directors, an Executive Director/CEO and mid-level management. The purpose and existence of most nonprofit organizations is to bring about a change in individuals and society (Drucker, 1990). Charismatic leadership in nonprofit organizations can take an ordinary vision and turn it into an extraordinary vision. "Charismatic's have the imagination to see beyond current realities, to picture the desired future as if it already exists" (Mason, 2004 pg. 19.)

This research will examine the effectiveness of charismatic leadership and the significance it has to the overall performance and sustainability of a nonprofit organization.

Review of Literature

One of the primary roles of an Executive Director/CEO of a nonprofit organization is to be the liaison between the Board of Directors and mid-level management. "The chief executive is often at the center of the organization's information flow and can have an informational advantage over the Board" (Heimovics, Herman, Coughlin, 1993 pg. 420). The Executive Director/CEO is also expected to handle the day-to-day operations of the organization. The ED/CEO is responsible for the smooth operation of programs, the placement of skilled mid-level management in positions that will produce programs that meet or exceed the goals set forth by funding sources and focusing on tasks that fulfill the mission. Drucker (1990) states that, "the first task of the leader is to make sure that everybody sees the mission, hears it, and lives it." A charismatic ED/CEO who possess the passion and formulates a clear vision for the organization and communicates this vision to mid-level management and other staff members will undoubtedly draw them in. Yukl (2010), states that there are certain indicators of charisma that promote the leader-follower relationship, "Followers perceive that the leader's beliefs are correct, they willingly obey the leader, they feel affection toward the leader, they are emotionally involved in the mission of the group or organization, they have high performance goals, and they believe that they can contribute to the success of the mission" (Yukl, 2010 pg. 266).

Charisma is a Greek word meaning gift. A leader having charisma is defined as "one able to instill a sense of value, respect and pride and articulate a vision" (Bertocci, 2009 pg. 43). "Most researchers who study charisma agree it is a collection of personal characteristics, not a style trait. It is probably tied to a person's potential for risk-taking, their ability to tolerate ambiguity and dissonance; their personal appearance and other qualities" (Bertocci, 2009 pg. 43). Charismatic leadership in nonprofit organizations can be the catalyst for the success or failure of the organization's mission and vision. According to (Mason, 2004), "charismatic leaders are plentiful and effective in the nonprofit sector." Charismatic leaders have the capability to draw their followers in by strong articulation, strong influence and magnetism. Mason (2004) states that leaders who have charismatic traits, "elicit energy in the form of time, talent and money". (pg. 19)

The Leadership structure of nonprofit organizations usually consists of a Board of Directors, the Executive Director/CEO and program directors which can be considered mid-level management. An organization's Board of Directors is an integral part of the organization. "Every nonprofit organization has a multitude of constituencies and has to work out the relationships with each of them" (Drucker, 1990, pg.157 ). A charismatic ED/CEO who possess the passion and formulates a clear vision for the organization and communicates this vision to the Board of Directors, mid-level management and other staff members will undoubtedly draw them in. Charismatic leaders are known to be unique and often times their behaviors are mirrored by their subordinates. "Effective leaders embody their organization's values. The leader becomes the ego-ideal, the model for followers, who internalize the beliefs that the leader symbolizes" (Mason, 2004, pg. 20).

Charismatic leaders possess the art of "attraction". They use the skills of persuasion and strong articulation to stimulate a sense of urgency (Yukl, 2010). Therefore, mid-level managers feel the need to work harder to find ways to improve performance and make the organization thrive. Charismatic leaders are known to sacrifice a great deal in order to fulfill the mission of an organization. Because the importance of the vision is so vital to the charismatic leader, they will go to great lengths to encourage followers to do the same. A charismatic ED/CEO with a heightened confidence level and enthusiasm will use these behaviors to influence and raise the commitment level of mid-level management within the organization. As a result of increased commitment, the ED/CEO and mid-level management will be able to work together to gain the skill and