The theory is intended to integrate the newer theories and the empirical evidence alluded to above. Value based leadership is defined as a relationship between an individual (leader) and one or more followers based on shared strongly internalized ideological values espoused by the leader and strong follwower identification with these values. Ideological values are values concerning what is morally right and wrong. Such values are expressed in terms of personal moral responsibility, altruism, making significant social contributions to others, concern for honesty, fairness, and meeting obligations to others such as followers, customers, or organizational stakeholders. Value based leadership is asserted to result in: a) exceptionally strong identification of followers with the leader, the collective vision espoused by the leader, and the collective; b) internalized commitment to the vision of the leader and to the collective; c) arousal of follower motives that are relevant to the accomplishment of the collective vision; and d) follower willingness to make substantial self sacrifices and extend effort above and beyond the call of duty.

The title Value Based Leadership Theory has been chosen to reflect the essence of the genre of leadership described by the theory. The 1976 theory of charismatic leadership is a precursor to the value based leadership theory. The title “charismatic leadership” has been chosen because of its cavalier popular connotation. The term charisma is often taken in the colloquial sense, rather than the somewhat technical sense conceived by Max Weber. The word charisma commonly invokes impressions of a person who is charming, attractive, and sometimes macho, flamboyant, and sexually appealing. In contrast, Value Based Leadership is intended to convey the notion of a leader who arouses follower latent values or causes followers to internalize new values. Such value communication can be enacted in a quiet, non-emotionally expressive manner or in a more emotionally expressive manner. Examples of leaders who have communicated values to followers in an emotionally expressive manner are Winston Churchill, Lee Iacocca, Martin Luther King, and John F. Kennedy. Examples of leaders who have communicated values to followers in a less emotionally expressive manner are Mother Teresa, Mahatma Ghandi, and Nelson Mandela.

A second reason for abandoning the term charisma is that in current usage it implies that the collectivities led by charismatic leaders are highly leader-centered and that the leader is the source of all, or almost all, organizational strategy and inspiration of followers. One popular conception of charismatic leadership is that it is necessarily highly directive and disempowering of followers (Lindholm, 1990). In this paper, I hope to demonstrate the huge potential for value based leadership to be empowering and effective.

The Process and Effects of Value Based Leadership

In this section, an overview of what Value Based leadership is and how it works is presented. There is both theory and empirical evidence to suggest that value based leadership has a substantial effect on organizational performance. Waldman and his associates reported two studies of value based leader behavior as an antecedent to organizational profitability (Waldman, Ramirez & House, 1996; Waldman, Atwater & House, 1996). In these studies value based leadership accounted for between fifteen and twenty five percent of firm profitability over the three years following the time at which value based leadership was assessed. The design of these studies controlled for executive tenure, firm size, environmental turbulence, and prior firm profitability.

The theoretical process by which value-based leadership functions is described in the following paragraphs. Evidence for this process is presented in more detail in later sections in which the specific theories contributing to value based leadership theory is discussed.

Value based leaders infuse collectives, organizations, and work with ideological values by articulating an ideological vision, a vision of a better future to which followers are claimed to have a moral right. By claiming that followers have this right, the values articulated in the vision are rendered ideological - expressions of what is morally right and good. Ideological values are usually, if not always, end values which are intrinsically satisfying in their own right. In contrast to pragmatic values such as material gain, pay, and status, end values cannot be exchanged for other values. Examples of end values are independence, dignity, equality, the right to education and self-determination, beauty, and a world of peace and order. Ideological values theoretically resonate with the deeply held values and emotions of followers.

Acccording to value based leadership theory the visions articulated by this genre of leaders are consistent with the collective identity of the followers, and are emotionally and motivationally arousing. Emotional and motivational arousal induces follower identification with the collective vision and with the collective, results in enhncement of follower self-efficacy and self-worth, and have powerful motivtional effects on followers and on overall orgnizational performance.

Leaders of industrial and government organizations often articulate visions for their organizations. Such visions need not be grandiose. Visions of outstanding leaders in the normal work world can embrace such ideological values as a challenging and rewarding work environment; professional development opportunities; freedom from highly controlling rules and supervision; a fair return to major constituencies; fairness, craftsmanship and integrity; high quality services or products; or respect for organizational members, clients or customers and for the environment in which the organization functions. Whether conceived solely by the leader, by prior members of the collective, or jointly with followers, the articulation of a collective ideological vision by leaders theoretically results in self-sacrifice and effort, above and beyond the call of duty, by organizational members and exceptional synergy among members of the collective.

Follower respect, trust, and self-sacrifice are stimulated by identification with the values inherent in the leader's vision and the leader's demonstration of courage, determination and self-sacrifice in the interest of the organization and the vision. According to this perspective, value based leaders use follower value identifiction, and the respect and trust they earn to motivate high performance and a sense of mission in quest of the collective vision, and to introduce major organizational change. For some individuals, latent values are brought to consciousness as a result of the vision articulated by value based leaders. Also, some individuals change their values to be consistent with those of the leader.

Visions articulated by value based leaders need not be formulated exclusively by a single leader. The collective vision may have been initially conceived by leaders and members of the collective who preceded the current leader. In this case, the leader is one who perpetuates the vision by continuing to communicate it and institutionalizing it through the establishment and maintenance of institutional means such as strategies, policies, norms, rituals, ceremonies, and symbols. Alternatively, organizational visions can be formulated by leaders in conjunction with organizational members.

The effects of the articulation of and emphasis on ideological values are rather profound. Organizational members become aware of ideological values that they share with the leader and as a collective. Members identify with the collective vision and with the organization--thus a high level of collective cohesion is developed. Collaborative interactions among organizational members is enhanced. Individuals experience a sense of collective efficacy and a heightened sense of self-esteem as a result of their cohesion and the leader's expressions of confidence in their ability to attain the vision. Further, motives relevant to the accomplishment of the vision are aroused and organizational members come to judge their self-worth in terms of their contribution to the collective and the attainment of the vision.

The result is strongly internalized member commitment, and intrinsic motivation to contribute to the organization and to the collective vision. Members are more inclined to support changes in technology, structure and strategies introduced by top management, which may result in an organizational culture characterized by values oriented toward teamwork and meeting customers', clients', constituents' and competitive needs. There ensues a marked reduction in intra-organizational conflict and a high degree of team effort and effectiveness. As noted above, members expend effort above and beyond the call of duty, and sacrifice their self-interest in the interest of the organization. As a result, individual motivation, organizational culture, strategy and structure are likely to become aligned with the collective vision.

A reinforcing process may also occur whereby organizational members increase their respect for and confidence in the leader and each other based on the resulting organizational success. As a result, their initial confidence and motivation is further reinforced. Such effects are consistent with the notion of romanticized leadership (Meindl, Ehrlich & Dukerich, 1985). The resulting increased confidence in the leader in turn gives the leader more influence and thus contributes to the leader's ability to further influence organizational performance.

This is an “ideal type” theoretical scenario. Clearly all the aspects of this scenario will not always come to fruition in response to value based leadership. No such claim is made. Rather, it is argued that organizational members will be motivated on the basis of shared internalized values and identification with the leader and the collective, which are far more motivational than alternative bases of motivation.

It is possible that value based leaders may introduce flawed strategies and that the result may be organizational decline or failure rather than improvement and success. It is also possible that the leader may stand for socially undesirable values such as ethnocentrism, racism, persecution, dishonesty, or unfair or illegal competitive practices (Lindholm 1990). Regardless of the strategy or values expressed by the leader, it is argued that a relationship based on value identification between leader and organizational members will result in increased member commitment and motivation, as well as increased organizational cohesion.

EMPIRICAL EVIDENCE

There is extensive empirical evidence with respect to the effects of behaviors specified by value based leadership theory. Charismatic, visionary, and transformational theories of leadership are precursors of the leader behaviors specified by value based leadership theory. Tests of these theories have been based on various operationalizations that qualify as measures of value based leadership including interviews (Howell & Higgins, 1990), laboratory experimentation (Howell & Frost, 1989; Kirkpatrick & Locke, 1996), questionnaires (Lowe, Kroeck & Sivasubramaniam, 1995), and quantified archival data (House, Spangler & Woycke, 1991). In all of these tests, the leader behavior measured consists of articulating an organizational vision and behaving in ways that reinforce the values inherent in the vision, thus qualifying as indirect evidence relevant to the effects of value based leadership. Space limitations prevent a detailed review of the evidence. However, Bass and Avolio (1993), House and Shamir (1993), Lowe et al,. (1995), and Yukl (1994), present overviews of these studies. With surprising consistency these empirical studies have demonstrated consistently that value based leader behavior predicts unusual levels of leader effectiveness directed toward enhancing organizational performance.

Support for the effects of value based leadership is illustrated by a recent meta-analysis of the charisma subscale of the Bass and Avolio (1989) Multifacet Leadership Questionnaire (MLQ). The MLQ charisma subscale describes relationships between subordinates and superiors. Superiors who receive high scores on this scale are described by subordinates as having an exciting vision of the future for the organization they lead, and being exceptionally motivational, trustworthy, and deserving of respect. 

Support for the theoretical main effects of value based leader behavior has been demonstrated at several levels of analysis including dyads, small informal groups, major departments of complex organizations, overall performance of educational and profit making organizations, and nation states. The evidence is derived from a wide variety of samples including military officers, educational administrators, middle managers, subjects in laboratory experiments and management simulations, US presidents and chief executive officers of Fortune 500 firms (Bass & Avolio, 1993; House & Shamir, 1993; Waldman, Ramirez & House, 1996).

The evidence shows that the effects of value based leader behavior are rather widely generalizable in the United States and that they may well generalize across cultures. For instance, studies based on the charisma scale of the MLQ have demonstrated similar findings in India (Periera, 1987), Singapore (Koh, Terborg & Steers, 1991), The Netherlands (Koene, Pennings & Schreuder, 1991), China, Germany, and Japan (Bass, 1997).

In summary, the studies based on various operationalizations of value based leadership clearly show that this genre of leadership results in a high level of follower motivation and commitment and well-above-average organizational performance, especially under conditions of crises or uncertainty (Pillai & Meindl, 1991; House, Spangler, & Woycke, 1995; Waldman, Ramirez & House, 1996; Waldman, Atwater & House, 1996).

NEWLY INTEGRATED THEORIES

The value based theory of leadership integrates the precursor theories discussed above with a number of assertions advanced in several psychological theories of motivation and behavior. Following is a brief review of the psychological theories that are integrated into the Value Based Leadership Theory.

McClelland's Theories of Non-conscious Motivation

According to this theory, the motivational aspects of human beings can be understood in terms of four non-conscious motives in various combinations (McClelland, 1985). These motives are the achievement, power, affiliation, and social responsibility motives. McClelland has developed a theory of entrepreneural effectiveness based on the role of achievement motivation, and a more general theory of leader effectiveness consisting of theoretical assertions concerning the optimum combination of the above four motives for effective leadership. This theory is entitled the Leader Motive Profile Theory (LMP). In the following sections we discuss the four motives discussed by McClelland and the LMP theory.

Achievement Motivation

Achievement motivation is defined as a non-conscious concern for achieving excellence in accomplishments through one's individual efforts (McClelland, Atkinson, Clark, & Lowell, 1958). Achievement motivated individuals set challenging goals for themselves, assume personal responsibility for goal accomplishment, are highly persistent in the pursuit of goals, take calculated risks to achieve goals and actively collect and use information for feedback purposes. Achievement motivation is theoretically predicted to contribute to effective entrepreneurship (McClelland, 1985) and effective leadership of small task oriented groups (House et al., 1991). Litwin and Stringer (1968) demonstrated experimentally that small groups led by managers who enacted achievement oriented and arousing behaviors were more effective than groups with managers who did not.

In management positions at higher levels in organizations, and particularly in organizational settings where technical requirements are few and impact on others is of fundamental importance, managerial effectiveness depends on the extent to which managers delegate effectively and motivate and co-ordinate others. Theoretically, high achievement motivated managers are strongly inclined to be personally involved in performing the work of their organization and are reluctant to delegate authority and responsibility. Therefore, high achievement motivation is expected to predict poor performance of high-level executives in large organizations. House et al. (1991) found that achievement motivation of U.S. presidents was significantly inversely related to archival measures of U.S. presidential effectiveness.

Affiliative Motivation

Affiliative motivation is defined as a non-conscious concern for establishing, maintaining, and restoring close personal relationships with others. Individuals with high affiliative motivation tend to be non-assertive, submissive, and dependent on others (McClelland, 1985).  Theoretically, highly affiliative motivated managers are reluctant to monitor the behavior of subordinates, to convey negative feedback to subordinates even when required, or to discipline subordinates for ethical transgressions or violations of organizational policies. Highly affiliative motivated managers are also theoretically expected to manage on the basis of personal relationships with subordinates and therefore show favoritism toward some. House et al. (1991) found that the affiliative motive was significantly negatively correlated with U.S. presidential charismatic leadership and archival measures of U.S. presidential effectiveness.

Power Motivation

Power motivation is defined as a non-conscious concern for acquiring status and having an impact on others. Individuals with high power motivation tend to enjoy asserting social influence, being persuasive, drawing attention to themselves, and having an impact on their immediate environment including the people with whom they interact. Theoretically, if enacted in a socially constructive manner, high power motivation should result in effective managerial performance in high level positions (McClelland, 1975; 1985). However, unless constrained by a responsibility disposition, power motivated managers will exercise power in an impetuously aggressive manner for self aggrandizing purposes to the detriment of their subordinates and organizations.

High power motivation induces highly competitive behavior. Therefore, when unconstrained by moral inhibition, power motivation is theoretically predictive of leader effectiveness when the role demands of leaders require strong individual competitiveness, aggressiveness, manipulative exploitive behavior, or the exercise of substantial political influence. The power motive was found by House et al. (1991) to significantly predict presidential charismatic behavior and archival measures of presidential effectiveness.

Responsibility Disposition

According to McClelland, individuals who have a high concern for the moral exercise of power will use power in an altruistic and collectively-oriented manner. Indicators of high concern for responsibility are expressions of concern about meeting moral standards and obligations to others, concern for others, concern about consequences of one’s own action, and critical self judgment.

Winter and Barenbaum (1985) developed and validated a measure of concern for moral responsibility, which they label the responsibility disposition1. The measure is based on quantitative content analysis of narrative text material. Winter (1991) demonstrated that the responsibility disposition, in combination with high power and low affiliative motivation, was predictive of managerial success over a sixteen-year interval.

The responsibility motive should be predictive of leader integrity and leaders' concern for the consequences of their own actions on others. Leaders with high responsibility disposition are expected to stress the importance of keeping one's word, honesty, fairness, and socially responsible behavior. Thus, we expect the responsibility disposition to be associated with value based leader behavior, supportive leader behavior, fairness, follower trust and respect for the leader and commitment to the leader’s vision, and consequently organizational effectiveness.