The missing link? Investigating organizational identity strength and transformational leadership climate as mechanisms that connect CEO charisma with firm performance

Item Type Journal paper
Abstract In this paper, we suggest that CEO charisma is related to firm performance via its effect on two important mediators. First, charismatic CEOs are expected to raise the transformational leadership climate within an organization. Second, both CEO charisma and transformational leadership climate are proposed to increase a firm's organizational identity strength, which in turn, relates positively to firm performance. We tested these propositions on a sample of 150 German companies (20,639 employees) with a three-path mediation model at the organizational level of analysis, utilizing four independent data sources. To test the assumed relationships, we used structural equation modeling and applied bootstrapping. Our study helps open the black box of organizational leadership and organizational performance by demonstrating top-level leadership's (CEO charisma) cascading effect on the TFL climate throughout the organization and by showing that OIDS mediates both leadership levels' relationships with firm performance. Further, our study is the first to investigate and demonstrate the relationship between OIDS and performance at the organizational level of analysis.
Authors Böhm, Stephan A.; Dwertmann, David J. G.; Bruch, Heike & Shamir, Boas
Journal or Publication Title The Leadership Quarterly
Language English
Keywords Organizational identity strength, CEO Charisma, Transformational leadership climate, Firm performance
Subjects business studies
HSG Classification contribution to scientific community
Refereed Yes
Date 1 April 2015
Publisher Elsevier Science
Place of Publication Amsterdam
Volume 26
Number 2
Page Range 156-171
Number of Pages 16
ISSN 1048-9843
ISSN-Digital 1873-3409
Publisher DOI https://doi.org/10.1016/j.leaqua.2014.07.012
Depositing User Prof. Dr. Stephan Alexander Böhm
Date Deposited 01 Aug 2014 00:50
Last Modified 20 Jul 2022 17:21
URI: https://www.alexandria.unisg.ch/publications/233499

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Böhm, Stephan A.; Dwertmann, David J. G.; Bruch, Heike & Shamir, Boas (2015) The missing link? Investigating organizational identity strength and transformational leadership climate as mechanisms that connect CEO charisma with firm performance. The Leadership Quarterly, 26 (2). 156-171. ISSN 1048-9843

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https://www.alexandria.unisg.ch/id/eprint/233499
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