Charismatic leadership,environmental dynamism,and performance

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.