Business, organization theory, and the current challenge of neocharisma

• Author: Michela Betta
• DOI: http://doi.org/10.1111/basr.12171
• Date: 01 June 2019
• Published date: 01 June 2019

Bus Soc Rev. 2019;124:261–281.

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INTRODUCTION

The main objective of this article is to point to the need for new ways of conceptualizing organizations

within organization theory as a result of the intensive drive for innovation that is taking place in today's

society, including the economy. The intensive drive comes from firms as well as from governments

(Gottfredson & Aspinall, 2005; Mulgan, 2016), particularly in the form of strong incentives that can

take many forms (Johnson & Kwak, 2012; Shiller, 2013) and cause a variety of issues (Gottfredson &

DOI: 10.1111/basr.12171

ORIGINAL ARTICLE

Business, organization theory, and the current

challenge of neocharisma

MichelaBetta

© 2019 W. Michael Hoffman Center for Business Ethics at Bentley University. Published by Wiley Periodicals, Inc., 350 Main Street, Malden,

MA 02148, USA, and 9600 Garsington Road, Oxford OX4 2DQ, UK.

Swinburne University of Technology,

Melbourne, Australia

Correspondence

Michela Betta, Swinburne University

of Technology, John Street, Melbourne

Hawthorn, VIC 3122 Australia.

Email: mbetta@swin.edu.au

Abstract

An argument is made in this article that there exists a trend

in today's society toward a phenomenon that can tentatively

be called neocharisma and that this trend poses important

challenges to organization theory and the modern organi-

zation. This phenomenon, it is suggested, is expressed in

today's intense pressure for innovation, something that

makes it imperative to develop a distinction between con-

structive and destructive innovation. Organization theory

has some difficulty in handling innovations, radical change,

and irrationality, as a review of the literature shows. In order

to better understand a phenomenon such as neocharisma, it

is proposed that organizations be seen as embedded in soci-

ety in a typology based on Max Weber's four types of social

order (tradition, instrumental rationality, value rationality,

and charisma). The article ends with a comparison between

charisma and neocharisma, a discussion of what differenti-

ates constructive from destructive innovations, and sugges-

tions for future research related to neocharisma.

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BETTA

Aspinall, 2005). It should not come as a surprise that there are incentives for innovation because inno-

vation is at the core of the liberal tradition to “advocate a democracy of curiosity” in which intellectual

diversity, innovation, and growth flourish (Moore, 1998, p. 167). It seems, though, that the democracy

of curiosity is being neglected in current organization theory, in particular when it is linked to inno-

vation. Indifference toward innovation and the new organizations it calls upon, has prompted some

to question the purpose of today's organization scholarship (Davis, 2015), or the ability of organiza-

tion scholars to understand emerging organizations and innovations in today's business and society

(Starback, 2016), with others suggesting that organization theory is no longer able to anticipate trends

(Barley, 2016). It is a different story in newspapers and magazines where the fascination with innova-

tion features prominently. One of the consequences of the lack of a critical analysis of innovation from

an organizational theory perspective is that innovation has been glorified.

When glorification occurs, little effort is made to distinguish between innovations that are con-

structive and those that are destructive. The tendency is, instead, to view all innovations as good

(see Baumol, 1990, 2002; Fonseca, 2016; Khessina, Gocalo, & Krause, 2018;Sveiby, Gripenberg,

& Segercrantz, 2012; on how the idea of disruption has been invested with positive meaning see

Christensen, Raynor, & McDonald, 2015). Some of the problems that current forms of organization

theory have in handling destructive innovations and the culture of radical innovation will be discussed.

It will then be suggested that it becomes easier to deal with the challenge that these new forces pose if

organizations are viewed as embedded and integrated into societal macro orders of the Weberian kind.

Weber's four types of social orders are introduced, with special emphasis on the charismatic order. It

is pointed out that charisma is profoundly irrational in nature and blinds its followers from understand-

ing its potentially destructive nature. But while the charismatic order, according to Weber, eventually

loses strength through routinization or exposure to everyday tasks and economic activities, this is not

what is happening today. Instead, innovation and change are strongly encouraged in the economy.

To conceptualize the phenomenon that has just been described, the concept of neocharisma is

introduced. As opposed to traditional charisma, this type of charisma thrives in everyday life and

in the economy. And while Max Weber defined charisma as the “extraordinary [ausseralltäglich]”

attraction that certain individuals exert on others (Weber, 1978, p. 24), neocharisma can provisionally

be defined as the tendency of the individual to view oneself as creative and innovative. As a phenom-

enon, neocharisma is anchored in the individual but is mainly important for its social or collective

impact, just like charisma. A full discussion of the similarities and differences between neocharisma

and Weber's picture of classical charisma comes toward the end of this article. Thus, the main contri-

bution made through this article is to point to some developments in business and society that cannot

be explained with the old notion of charisma.

Because both charisma and neocharisma can be described as irrational in nature, it is also import-

ant to state what is meant by irrationality. Traditionally this term is simply seen as the opposite of what

is rational, namely as the opposite of what is reasonable and logical (for an elaborate discussion, see

e.g., Brubaker, 1984). In this case, however, it is important to argue, along the lines of Weber, that

what is rational or irrational also depends on the goal that is involved: “a thing is never irrational in

itself, but only from a particular point of view” (Weber, 1930, p. 194 n.9). The goal or a particular

point of view in the present case is the level of integration in the economy and society, and how this

influences an organization and its goals. With charisma, we have a phenomenon that challenges the

integration of society through a collective outburst of irrationality, but only momentarily. With neo-

charisma, in contrast, we have a phenomenon in which innovative action counters integration through

the inability of the actors to distinguish between constructive and destructive innovations. As a phe-

nomenon, neocharisma is persistent, rather than inflammatory, but potentially also more effective for

this very reason.