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Executive Overview Charismatic business leaders are often heralded as corporate heroes by orchestrating turnarounds, launching new enterprises, engaging in organizational renewal or change, and obtaining extraordinary performance from individuals. The effectiveness of these leaders may be interpreted by executives as an unqualified recommendation for such leadership in their organizations. However the risks involved in charismatic leadership are at least as large as the promises. What is missing from current discussions about charisma is consideration of its darker side. In this article we focus on a paradox that emerges whenever one discusses leaders such as Robert Campeau, Max DePree, Lee Iacocca, Ross Johnson, Ralph Larsen, and Michael Milken: why are some charismatic leaders destructive, while others are beneficial to followers, organizations, and even entire societies? Drawing on the results from an interview study as well as the popular management literature, we describe the qualities and values that differentiate ethical and unethical charismatic leaders. We also examine the impact ethical and unethical charismatic leaders have on followers and how organizations can develop ethical charismatic leaders.
Howell et al. (Fri,) studied this question.