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John Antonakis and Christian Zehnder, University of Lausanne; Giovanna d'Adda, University of Birmingham; and Roberto Weber, Universität Zürich
"Just Words? Just Speeches?" On The Economic Value of Charismatic Leadership
Despite the importance attributed to leadership in many economic, organizational and political contexts, the topic has received little attention in the economic discipline. In other fields, however, extensive research documents important characteristics of effective leaders, including the ability to influence followers through "charismatic" communication. Antonakis, d'Adda, Weber, and Zehnder report a field experiment that examines whether charisma in the form of a stylistically different motivation speech can induce costly effort among workers, and therefore generate higher output for a firm. In their experiment temporary workers have to prepare envelopes for a fundraising campaign conducted on behalf of a hospital. Workers are exposed to speeches that differ in the number of charismatic elements, as well as to varying financial incentives. The authors observe that workers who are given a charismatic speech increase their output on average by about 17% relative to the workers who listen to the standard speech. This performance effect of charisma is statistically significant and comparable in size to the positive effect of performance pay.