When Values Backfire 1 Running head: LEADERSHIP, VALUES, AND HYPOCRISY ATTRIBUTION When Values Backfire: Leadership, Attribution, and Disenchantment in a Values-Driven Organization

Theory on charismatic leaders suggests that shared values play an important role in promoting employee effort and organizational performance. This article proposes a theoretical model to identify conditions under which charismatic leadership and values inadvertently give rise to employee disenchantment, despite the good intentions of leaders and followers. The model integrates findings from a qualitative longitudinal study of a small advertising firm with prior research to develop new theory on unintended negative consequences of charismatic leadership. We propose that employee sensemaking triggered by strong organizational values can increase the risk of attributions of leader hypocrisy, which lead to employee disenchantment in a process we call the hypocrisy attribution dynamic. Value expansion, organizational tenure, and perceived benefit/harm are proposed to moderate the hypocrisy attribution dynamic, increasing the chances of negative sensemaking about leaders’ behavior. This research sheds light on mechanisms through which charismatic leadership and values achieve their effects, and suggests that value expansion may be a double-edged sword—heightening followers’ experience of meaning at work but also increasing the risk of subsequent disenchantment.