Heroes or Villains? Corruption and the Charismatic Leader

Article excerpt

We extend current research about corporate corruption and charismatic leadership by developing a multidimensional model involving stakeholder pressures, environmental factors, charismatic leaders', and their followers. Specifically, we propose that stakeholder pressures place strong demands" on leaders of organizations, increasing the motive for, and likelihood of corrupt practices. Furthermore, opportunity for corruption increases due to specific environmental factors, and through charismatic leaders' ability to create facades and influence followers to participate in, enable, or hide wrongdoing. We examine the implications of the "dark side" of charismatic leadership, that is, a "villain" charismatic leader concept rather than focusing on the "heroic" capabilities often studied in leadership research, and answer the call for studies that incorporate situational context (e.g., environmental pressures) into leadership research (Conger, 1999).

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Corruption is not new. Indeed, tales of the powerful and charismatic abusing their positions for organizational and personal gain are as old as recorded history. Despite the long trail of deceit, lies, and greed, however, corporate corruption appears to grasp the public's attention in waves, reaching a crescendo at different periods and then fading into the background. Now appears to be one of those times of "mass appeal," so to speak. Names like Tyco, Enron, and WorldCom dot the airwaves, as do now-familiar faces of notorious leaders like Kozlowski, Ebbers, and Stewart. Public airings of grievances have illuminated what scholars have known for years--that corporate corruption is not victimless. Instead, it is a "societal problem whose magnitude is difficult to overestimate", incurring a cost to society far greater than that of ordinary crime. (Szwajkowski, 1985, p.559)

While corporate corruption may not be a novel topic among researchers, the study of the interaction of stakeholder pressures, environmental variables, charismatic leadership, and follower attributes on organizational corruption, is. We extend current research about corporate corruption and charismatic leadership by developing a multidimensional model involving these four constructs. Our proposed model examines the direct relationship between stakeholder pressures and corporate corruption, as well as the moderating influence of environmental factors and charismatic leadership's "dark side," i.e., the leader's control over followers and ability to manipulate stakeholder demands and decouple organizational practices. Further, this paper answers the call from researchers to look at charismatic leadership from a systems perspective (Yukl, 1999), as well as to incorporate situational context into leadership research (Conger, 1999).

In the pages that follow, we set the stage for this model by first providing a general overview of research in corporate corruption. We then turn to a description of charismatic leadership, including leader, situational, and follower characteristics. Included in this discussion is a description of the "dark side" of charisma, and how charismatic leaders and followers may provide for the increased likelihood of corrupt behavior. Armed with this theoretical support, we develop a multidimensional model of organizational corruption, eventually developing propositions guided by our ideas and the reviewed literature.

Our framework of corruption is guided by Coleman's (1987) general theory of organizational crime; that is, crime occurs when both motive and opportunity exist. We frame our paper around this general theory, relating pieces of our model that increase both motive and opportunity for corruption. Following Coleman, we posit a direct relationship between increased stakeholder pressures and corporate corruption; that is, stakeholder demands act as a motive for individuals to engage in corrupt behavior (i.e., a reason to commit unethical or corrupt acts). …