Charismatic leadership, environmental dynamism, and performance

Abstract

Most studies relating charismatic leadership to performance have limitations concerning selection of criterion measures and investigation of moderators. Therefore, this study examines relationships between charismatic leadership and multiple performance outcomes under different levels of environmental dynamism (i.e., level of environmental uncertainty, degree of technological change) and per type of Chief Executive Officer (firm owner versus managing director). Results revealed that charismatic leadership was positively related to common-source and multi-source perceptual performance outcomes (i.e., subordinates' positive work attitude) and to organization profitability, but unrelated to organization liquidity and solvency. The relationship between charismatic leadership and perceptual performance was stronger under conditions of environmental uncertainty than under conditions of environmental certainty. Furthermore, charismatic leadership was more strongly related to organization profitability for firm owners than for managing directors who do not own their firm. The results are discussed and several potentially fruitful avenues for future research on charismatic leadership and employee as well as organizational performance are presented.

Linking the Big Five‐Factors of personality to charismatic and transactional leadership; perceived dynamic work environment as a moderator

“…For example, Waldman et al (2001) found that the relationship between CEO charismatic leadership and firm financial performance was positive, but this only held when environmental conditions were uncertain and changeable. Also, De Hoogh et al (2004b) found that the relationship between charismatic leadership and subordinates' positive work attitude to be stronger in such uncertain, unpredictable environments. As stated, we see a dynamic environment as a relatively uncertain situation, characterized by a high degree of challenge and great opportunities for change.…”

“…Other researchers have investigated slightly different concepts in relation to charismatic leadership, for example environmental uncertainty (cf. De Hoogh et al, 2004b;Flynn & Staw, 2004;Waldman et al, 2001) crisis (cf. Pillai, 1996;Pillai & Meindl, 1991) and technological change (cf.…”

The interactive effects of belongingness and charisma on helping and compliance.

“…They display self-confidence and are able to inspire followers to transcend their own self-interest for the sake of the collective (e.g., Bass, 1985;House, 1977House, , 1996Shamir, House, & Arthur, 1993). Meta-analyses have shown that charismatic leadership correlates positively with a wide range of variables (e.g., Fuller, Patterson, Hester, & Stringer, 1996;Lowe, Kroeck, & Sivasubramaniam, 1996), including organizational commitment (e.g., Bycio, Hackett, & Allen, 1995), personal identification (Shamir, Zakay, Breinin, & Popper, 1998), and firm profitability (e.g., De Hoogh et al, 2004;Waldman et al, 2001). Previous research has also suggested that charismatic leadership elicits OCB from followers.…”

“…For example, De Hoogh et al (2004) found that the relationship between charismatic leadership and subordinates' positive work attitude was stronger in uncertain, unpredictable environments. In such a context, charismatic leaders can more easily generate appeal for their vision (Trice & Beyer, 1986;Waldman et al, 2001).…”

“…Our main aim in the current study was to expand existing literature by testing potential interactive effects of charisma and belongingness on helping and compliance. Several studies recently have suggested that the impact of charismatic leadership on followers is stronger in more challenging situations (e.g., De Hoogh et al, 2004;Waldman, Ramirez, House, & Puranam, 2001). In line with this, we expected that charismatic leadership would have stronger effects on helping and compliance when people feel less connected to the group.…”