The Value Based Leadership Theory
The Value Based Leadership Theory
The Value Based Leadership Theory
Managers do things right
Leaders do the right things…
Value Based Leadership Theory
“Leaders are dealers in hope” Bonaparte Napoleon
“We will build a winning tradition” Vince Lombardi to the Green
Consider the above quotations. These statements of leaders reflect
commitment to a value position. In this paper I am going to describe a
brand new theory of leadership, developed by Professor House - the Value
I am deeply interested in the question of leadership, and I do think,
that this question and the existing theories have a long life to live.
A BRIEF HISTORICAL REVIEW
During the period between the mid-seventies and the present time a
number of theories have been introduced into the leadership literature.
I believe these theories are all of a common genre. They attempt to explain how leaders are able to lead organizations to attain outstanding accomplishments such as the founding and growing of successful entrepreneurial firms, corporate turnarounds in the face of overwhelming competition, military victories in the face of superior forces, leadership of successful social movements and movements for independence from colonial rule or political tyranny. They also attempt to explain how certain leaders are able to achieve extraordinary levels of follower motivation, admiration, respect, trust, commitment, dedication, loyalty, and performance.
The dependent variables of earlier theories are follower expectations, satisfaction, and normal levels of performance. The dependent variables of the more recent theories include a number of affective consequences such as followers’ emotional attachment to leaders; followers’ emotional and motivational arousal, and thus enhancement of follower valences and values with respect to the missions articulated by leaders; followers’ trust and confidence in leaders; and values that are of major importance to the followers. These more recent theories also address the effect of leaders on several follower conditions not addressed in earlier theories, such as followers' self-worth and self-efficacy perceptions, and identification with the leader’s vision.
Earlier theories describe leader behavior that are theoretically
instrumental to follower performance and satisfy follower needs for
support, generally referred to as task-and person-oriented leader behaviors
Earlier theories take follower attitudes, values, desires, and preferences as given. The more recent theory claim that leaders can have substantial, if not profound effects on these affective and cognitive states of followers. Accordingly, leaders are claimed to transform both individuals and total organizations by infusing them with moral purpose, thus appealing to ideological values and emotions of organizational members, rather than by offering material incentives and the threat of punishment, or by appealing to pragmatic or instrumental values.
Also, McClelland (1975) introduced a theory intended to explain leader effectiveness as a function of a specific combination of motives referred to as the Leader Motive Profile (LMP). As will be shown below, this theory complements the newer theories referred to above.
Since the early 1980s, more than fifty empirical studies have been
conducted to test the validity of the more recent theories of leadership.
VALUE BASED LEADERSHIP THEORY
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
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,
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,
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.
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.
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.
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.
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 &
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
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 &
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)
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 &
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,
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;
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
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
Achievement motivation is defined as a non-conscious concern for
achieving excellence in accomplishments through one's individual efforts
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
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).
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
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.
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.
Leader Motive Profile Theory
McClelland (1975) argued that the following combination of non-
conscious motives are generic to, and predictive of, leader effectiveness:
high power motivation, moderate achievement motivation, high concern for
the moral exercise of power, and power motivation greater than affiliative
motivation. This combination of motives is referred to by McClelland
According to LMP theory, the power motive is necessary for leaders to be effective because it induces them to engage in social influence behavior, and such behavior is required for effective leadership. Further, when the power motive is higher than the affiliative motive, individuals do not engage in the dysfunctional behaviors usually associated with high affiliation motivation - favoritism, submissiveness, and reluctance to monitor and discipline subordinates. Finally, when high power motivation is coupled with a high concern for moral responsibility, individuals are predicted to engage in the exercise of power in an effective and socially desirable manner. Earlier research, also reviewed by McClelland (1985), suggests that the achievement motive is a better predictor of leader effectiveness and success in entrepreneurial organizations than LMP.
Theoretically the leader motive profile is predictive of managerial
effectiveness under conditions where leaders need to exercise social
influence in the process of making decisions and motivating others to
accept and implement decisions. In formal organizations these conditions
are found at higher levels and in non-technical functions. By contrast, in
smaller technologically based organizations, group leaders can rely on
direct contact with subordinates (rather than delegation through multiple
organizational levels), and technological knowledge to make decisions.
Several studies have demonstrated support for the LMP theory. Winter
Since high LMP leaders have greater power than affiliative motivation it is expected that they will be assertive and at least moderately directive. Further, since they have high responsibility motivation it is expected that thay will have highly internalized idological values - values concerning what is morally right and wrong - and that they will thus stress ideological value orientation, integrity, and fairness, as explained above, both verbally and through personal example.
The Path-Goal Theory of Leadership
The essence of path-goal theory is that leader behaviors will be
effective when such behaviors complement formal organizational practices
and the informal social system by providing direction, clarification,
support and motivational incentives to subordinates, which are not
otherwise provided (House, 1971; House & Mitchell, 1974; House, 1996).
Path-goal theory suggests that either participative or directive
leader behavior can provide psychological structure and direction and
therefore clarify subordinates' role demands. Theoretically, directive
leader behavior will be dysfunctional and participative leader behavior
will be functional when subordinates are highly involved in their work,
perceive themselves as having a high level of task related knowledge,
and/or prefer a high level of autonomy. Meta-analyses of 135 relationships
tested in prior studies provide support for these assertions (Wofford &
Dissonance Theory and Competing Values
According to cognitive dissonance theory, individuals experience
anxiety-inducing cognitive dissonance when their self-evaluative
cognitions, feelings and behavior are in conflict with each other
Equity theory asserts that when individuals perceive the ratio of their contributions to their rewards (intrinsic or extrinsic) to be equal to the ratio of contributions to rewards of others, they will believe that they are treated fairly (Adams, 1963). We expect that under conditions of perceived unfairness followers will feel resentment, be demotivated, will not support and may even resist attempts by leaders to influence them.
Mischel (1973) has argued that the psychological strength of
situations influences the degree to which individual dispositions such as
motives or personality traits are expressed behaviorally. Strong
situations are situations in which there are strong behavioral norms,
strong incentives for specific types of behaviors, and clear expectations
concerning what behaviors are rewarded. According to this argument, in
strong situations, motivational or personality tendencies are constrained
and there will be little behavioral expression of individual dispositions.
Theoretically, in strong psychological situations, leader motives have less influence on leader behavior, and leader behavior has less influence on subordinates and on organizational outcomes than in weak psychological situations. Studies by Monson, Healy and Chernick (1982), Lee, Ashford, and Bobko (1990), and Barrick and Mount (1993) have demonstrated support for Mischel's situational strength argument.
THE VALUE BASED LEADERSHIP THEORY
This theory consists of six axioms and twenty-seven propositions that relate leader behavior, leader motives, and situational variables to leader effectiveness.
The Parsimonious Meta–Proposition of Value Based Leadership
Value based leadership theory is based on the meta–proposition that non-conscious motives and motivation based on strongly internalized values is stronger, more pervasive, and more enduring than motivation based on instrumental calculations of anticipated rewards or motivation based on threat and avoidance of punishment. The axioms and propositions that follow are derived from and can all be explained in terms of this parsimonious meta-proposition.
The Value Based Leader Behavior Syndrome
Behaviors that characterize value based leadership include a) articulation of a challenging vision of a better future to which followers are claimed to have a moral right; b) unusual leader determination, persistence, and self-sacrifice in the interest of the vision and the values inherent in the vision; c) communication of high performance expectations of followers and confidence in their ability to contribute to the collective; d) display of self-confidence, confidence in followers, and confidence in the attainment of the vision; e) display of integrity; f) expressions of concern for the interests of followers and the collective; g) positive evaluation of followers and the collective; h) instrumental and symbolic behaviors that emphasize and reinforce the values inherent in the collective vision; i) role modelling behaviors that set a personal example of the values inherent in the collective vision; j) frame-alignment behaviors--behaviors intended to align followers' attitudes, schemata, and frames with the values of the collective vision; and, k) behaviors that arouse follower motives relevant to the pursuit of the vision. We refer to these behaviors collectively as the value based leader behavior syndrome.
This specification of value based leader behaviors integrates the behaviors specified in prior extensions of the 1976 theory of charismatic leadership as well as behaviors specified in other theories of charismatic, transformational and visionary leadership. House and Shamir (1993) provide the rationale for inclusion of the above behaviors in the theoretical leader behavior syndrome.
Axioms are statements, the validity of which are taken for granted, either because the enjoy substantial empirical evidence or becuse they cannot be tested. Axioms provide a foundation for more specific statements, such as propositions. The axioms stated here provide the foundation for the selection of leader behaviors from among all of the leader behaviors specified in the various theories described above.
Axioms Concerning Human Motivation
These axioms incorporate the extensions of the 1976 theory of
charismatic leadership offered by Shamir, House and Arthur (1993), and
The theory is expressed in the form of twenty-seven propositions which
assert specific ways in which leader motives and behaviors, in conjunction
with situational variables, affect follower motivation and performance and
organizational performance. These propositions are based on the leadership
and psychological theories reviewed above and reflect the extensions of the
Propositions Concerning Leader Behavior and Its Effects
1. The motivational effects of the behaviors of the value based leader
syndrome described above will be heightened follower recognition of shared
values between leaders and followers, heightened arousal of follower
motives, heightened follower self-confidence, generalized self-efficacy and
self-worth, strong follower self-engagement in the pursuit of the
collective vision and in contributing to the collective, and strong
follower identification with the collective and the collective vision. We
refer to these psychological reactions of followers as the value based
motive syndrome .
Propositions Concerning Leader Attributes
3. Self-confidence and a strong conviction in the moral correctness of
one's beliefs will be predictive of proactive leadership. This proposition
is a slight modification of proposition three of the 1976 Theory of
Propositions four through twelve are derived from the motivation theories reviewed earlier.
Propositions Concerning Specific Leader Behaviors
Propositions 13 through 21 are based on the 1996 version of Path Goal
Propositions 22 through 24 are slight revisions of propositions
advanced in the 1976 Theory of Charismatic leadership (House, 1977).
Propositions Concerning Social Context
26. Two necessary conditions for leaders to have the effects specified in
proposition two are that leaders have the opportunity to communicate the
collective vision to potential followers and that the role of followers be
definable in ideological terms that appeal to them. This is a modification
of one of the propositions originally advanced by House (1977).
The hypotheses were tested within the context of a latent structure casual model, using Partial Least Squares Analysis (PLS). This modelling procedure requires that substantive hypotheses be modelled in the form of paths connecting the hypothesized variables. The variables are latent constructs composed of scores on manifest indicators. The The slopes of these relationships are presented in Figure 3. This finding supports the competitive hypothesis 5a which states that LMP will have greater effects in non-entrepreneurial firms than in entrepreneurial firms, and will be discussed below.
In this section we first discuss the implications of the findings with respect to the value based leadership. Next we discuss the implications of the findings for each of the five theories that were integrated in the models tested. We then discuss the more general implications of the study for the discipline of Organizational Behavior.
Value Based Leadership
Thomas (1988), House et al. (1991), and by Waldman, Ramirez and House
Collectively, the findings of the present study help to understand the
phenomena in the "black box." More specifically, the findings show, in
some detail, important relationships between chief executives' motives and
behavior and subordinates' motivation and commitment to their organization.
Implications for Specific Theories
In this section we discuss the implications of the study findings for
each of the theories that are integrated to form the Value Based Theory of
Achievement Motivation Theory
Achievement motivation has a more positive effect on CEMS and all leader behaviors in entrepreneurial firms than in non-entrepreneurial firms. This finding constitutes yet another confirmation of achievement motivation theory concerning the specific conditions under which achievement motivation is predicted to result in high performance.
Moral Responsibility Theory
The bivariate relationships between the moral responsibility disposition and value based leader behavior, leader fairness and CEMS, and the moderating effect of responsibility on the relationships between the power motive, and CEMS, leader charisma, and support/reward behavior all provide support for Moral Responsibility Theory. Moral responsibility motivation is clearly an important disposition that deserves further investigation and attention.
Leader Motive Profile Theory
The positive relationships between LMP and executive value based leader behavior, support/recognition behavior, and directiveness provide support for LMP Theory. These two relationships are consistent with the interpretation that because high LMP leaders have low affiliative motivation they enact social influence in an impersonal and more proactive and assertive manner than low LMP leaders.
The findings are consistent with the propositions that LMP affects
leader behavior, and leader behavior in turn has a positive effect on CEMS.
Path Goal Theory
As predicted by the Path-Goal Theory of Leadership (House, 1996), leader contingent recognition and supportive behaviors are predictive of CEMS, and leader directiveness is more strongly negatively related to CEMS in entrepreneurial firms. Thus Path-Goal theory is provided additional support in the present study.
The major conclusions that can be drawn from the above findings and
discussion are: 1) the value based theory of leadership successfully
integrates five prominent theories of leadership (transformational,
charismatic, visionary, LMP, and path-goal theories) and assertions drawn
broadly from established psychological theories of motivation and behavior;
Beginning with the 1976 theory of charismatic leadership (House,