The Dark Sides of Charismatic Leadership

How organizations can deal with it

Essay from the year 2008 in the subject Business economics - Business Management, Corporate Governance, grade: 1,8, European Business School - International University Schloß Reichartshausen Oestrich-Winkel, course: Management & Leadership, language: English, abstract: In recent years insolvencies of German companies have dramatically increased. Were it around 33 000 companies in 2003 who were filed for insolvency, more than double that amount (68 898 companies) became bankrupt in 2005 (Statistisches Bundesamt, 2006, p. 352), and one can only imagine the aftermath the financial crisis will have on companies worldwide. The reasons are manifold: recession, international competitive pressures, and high production costs. However, seldom the very leaders of these organizations admit to their responsibility in company failures. Many of these leaders are charismatic leaders. On the one hand they possess substantial skill sets vital for organizations, especially in times of crisis and uncertainty, and on the other hand they can be detrimental for a company when using their skills in a wrong way. This is often referred to as the 'dark side' of charismatic leadership. The essay tries to analyse ways, in which organizations are able to take advantage of the charismatic leader, without having to deal with the dark side to a large extent.