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The literature on charismatic leadership in organizations has neglected the organizational context in which such leadership is embedded. The purpose of this article is to enrich and refine charismatic leadership theory by linking it to its organizational context. We argue that while charismatic leadership principles and processes potentially apply across a wide variety of situations, the emergence and effectiveness of such leadership may be facilitated by some contexts and inhibited by others. We develop and present a series of propositions linking contextual variable to the emergence and effectiveness of charismatic leadership. Among the contextual variable we examine are the organizational environment, life-cycle stage, technology, tasks, goals, structure, and culture, as well as the leader’s level in the organization and the circumstances surrounding his or her appointment.

The empirical literature on charismatic or transformational leadership demonstrates that such leadership has profound effects on followers. However, while several versions of charismatic leadership theory predict such effects, none of them explains the process by which these effects are achieved. In this paper we seek to advance leadership theory by addressing this fundamental problem. We offer a self-concept based motivational theory to explain the process by which charismatic leader behaviors cause profound transformational effects on followers. The theory presents the argument that charismatic leadership has its effects by strongly engaging followers’ self-concepts in the interest of the mission articulated by the leader. We derive from this theory testable propositions about (a) the behavior of charismatic leaders and their effects on followers, (b) the role of followers’ values and orientations in the charismatic relationship, and (c) some of the organizational conditions that favor the emergence and effectiveness of charismatic leaders.

This chapter on Mumford and Hunter's chapter “Innovation in Organizations: A Multi-Level Perspective on Creativity” (this volume) describes both its contributions and limitations to the development of a cross-level theory of innovation. To resolve some of the cross-level paradoxes highlighted by Mumford and Hunter, we propose five variables that operate at multiple levels including trust, social identity, mental models, networks, and time, and formulate some new multi-level propositions. Future directions for innovation theory development and research are also discussed.

Jay Barney is a Professor of Management and holds the Bank One Chair for Excellence in Corporate Strategy at the Max M. Fisher College of Business, The Ohio State University. He received his undergraduate degree from Brigham Young University, and his master's and doctorate from Yale University. He taught at the Anderson Graduate School of Management at UCLA and Texas A&M University before joining the faculty at Ohio State in 1994, where Professor Barney teaches organizational strategy and policy to MBA and Ph.D. students.

1. INNOVATION IN ORGANIZATIONS: A MULTI-LEVEL PERSPECTIVE ON CREATIVITY

In their articles on “Innovation in Organizations: A Multi-Level Perspective on Creativity,” Robert Sternberg, along with Jane Howell and Kathleen Boies, broach a critical question bearing on the nature of creativity in organizational settings. Why is creativity in organizations so difficult even though organizations say they want creativity? In the present chapter, we examine some likely sources of this paradox and the ways one might go about resolving this paradox. Subsequently, we discuss directions for future research.