The dark side of charismatic leadership, the impact of leader bottom-line mentality on the relationship between charismatic leadership and organizational citizenship behavior.

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The dark side of charismatic leadership, the impact of leader bottom-line mentality on the relationship between

charismatic leadership and organizational citizenship behavior.

Zeb de Haas 11062819

University of Amsterdam Faculty of Economics and Business

June 25^th, 2021

Supervisor: Dr. Annebel de Hoogh

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Statement of originality

This document is written by Student Zeb de Haas who declares to take full responsibility for the contents of this document.

I declare that the text and the work presented in this document is original and that no sources other than those mentioned in the text and its references have been used in creating it.

The Faculty of Economics and Business is responsible solely for the supervision of completion of the work, not for the contents.

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Abstract

This present thesis seeks to fill this existing research gap on the possible dark side of charismatic leadership on follower consequences. More specifically, this thesis attempts to further clarify the role of leader characteristics, such as bottom-line mentality, in the relationship between charismatic leadership and organizational citizenship behavior. The research is based on 188 leader-follower dyads from various organizational teams collected through the means of a survey. After analyzing the results, the only relationship shown to be significant was between charismatic leadership and LMX. All other relationships were found to be non-significant. Pointing out that leader BLM was not related to LMX in any way.

Neither directly as a main effect nor as a combination with charismatic leadership as a moderating effect. Moreover, it was proposed that the effect of charismatic leadership on OCB is mediated through LMX but that that mediation is moderated by BLM where BLM is moderating the path between charismatic leadership and the mediator of LMX. However, this expected moderated mediation effect was also not found to be present. Furthermore, the research discussed its limitations and presented future research suggestions. Such as, investigating the potential dark side of charismatic leadership on behavioral consequences based on a perspective of social identity theory.

Keywords: Leadership, charismatic leadership, leader bottom-line mentality, leader-member exchange, organizational citizenship behavior, social exchange, moderated mediation.

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1. Introduction

Charismatic leadership theories have made considerable progress in identifying effective leadership. Through a combination of inspirational motivation and idealized influence, charismatic leaders can mesmerize and inspire their followers in fulfilling their goals and perform beyond expectations (Bass, 1997; Bass & Avolio, 1993). Many studies and meta- analysis have found the positive effects of charismatic leadership in relationship to employee outcomes such as promoting followers’ trust (Jung & Avolio, 2000), performance (DeGroot, Kiker, & Cross, 2000; Kirkpatrick & Locke, 1996), work motivation (Choi, 2006), work engagement and organizational citizenship behaviors (Babcock-Roberson & Strickland, 2010).

Meyer and Allen (1997) describe that such organizational citizenship behavior (OCB) as behavior that goes beyond what is stated in this employee’s formal job description.

Additionally, it is found that when organizations possess employees engaging in OCB they are perceived as higher quality organizations, with better customer satisfaction and higher operating efficiency (Podsakoff, Ahearne, & Mackenzie, 1997; Walz & Niehoff, 2000). This illustrates that OCB can be a crucial factor in organizational success. For this reason, the further focus of this research will be on follower behavioral consequences in the form of OCB. More specifically, this study focuses on the relationship between charismatic leadership and employee organizational citizenship behavior.

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The social exchange theory (SET) helps to explain this relationship (Blau, 1964). SET not only plays a critical role in the follower’s development (Kark & Shamir, 2002) but also is expected to influence subsequent follower behaviors (Shamir et al., 1993). One way in which charismatic leadership sets itself apart from different leadership styles is because of the strong emphasis on de development of stronger personal connections between charismatic leaders and their followers (Avolio et al., 1999), this highlights once again the frequency, importance, and influence possibilities of social exchanges in the development of such leader-follower exchange connections. As of now, research on charismatic leadership mainly focused on its positive outcomes, and what always emerges is that charismatic leaders ensure that their followers admire them, respect them, want to be near them and, in general, charismatic leaders, therefore, have good relationships with their employees (Banks et al., 2017). However, there are comparably few studies investigating the potential dark side of charismatic leaders (e.g., Deluga, 1997, 2001; Hogan, Raskin, & Fazzini, 1990; House & Howell, 1992; Paunonen, Lönnqvist, Verkasalo, Leikas, & Nissinen, 2006; Sankowsky, 1995) and even fewer researching the possible negative consequences for the followers of charismatic leaders (e.g., Howell & Shamir, 2005). Since charismatic leaders, through their interactions and exchanges, have the potential to influence the people around them (House, 1977; Shamir, House, & Arthur, 1993) and the current lack of research on the negative consequences of charismatic leadership, it is essential to acquire a more complete understanding of the possible dark side and consequences of charismatic leadership.

Preceding research by Greer et al. (2012) demonstrates that charismatic leaders can indeed have negative effects on follower behavior. It probably depends on the things that these leaders emphasize. Bottom-line mentality (BLM) means pursuing everything for-profit and employee interests do not matter. Or as Greenbaum, Mawritz, and Eissa (2012, p. 344) describe it “one-dimensional thinking that revolves around securing bottom-line outcomes to the neglect of competing priorities”. What if a charismatic leader is characterized by a high degree of BLM? I expect that when charismatic leaders are expressing a high degree of bottom-line mentality this will negatively influence the relationship with their employees. Due to the leaders’ one-dimensional bottom-line focus and the negligence of other meaningful values, like adhering to moral and social norms (Barsky, 2008) it is proposed that followers will perceive the relationship with their leader to be in misbalance and therefore, will be less inclined to reciprocate in the form of expressing organizational citizenship behavior.

So, it could well be that if a charismatic leader is characterized by BLM this will be very much at the expense of the leader-member relationship and thus ultimately at the expense of

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the expressed OCB by the employee. Since this topic is relatively unknown, this study aspires to further investigate the relationship between charismatic leadership, leader-member exchange, organizational citizenship behavior, and the moderating effect of leader bottom-line mentality. Everything together, I expect a moderated mediation effect. In a way that the stronger the BLM of the charismatic leader, this will be at the expense of the relationship with the employee and ultimately the displayed OCB of the employee. To this end, I conducted surveys and collected 188 completed leader-follower dyads in different organizations and can therefore ultimately say something about possible boundary conditions or negative effects of charismatic leadership with OCB.

2. Theoretical framework

2.1 Charismatic leadership

The contemporary conception of charisma is formed by the works of Max Weber. In 1947, Weber used the Greek translation of the word charisma – meaning “divine gift” – to describe the type of leaders who seem to possess certain “gifts” that enables them to lead in refreshing and inspiring ways which are remarkably different from other traditional forms of leadership (e.g., leadership based on the premises of formal authority). Besides the exceptional qualities of an individual’s personality, he also acknowledged the relational basis for charisma that involves the recognizance of the follower. According to Weber, the key to success for charismatic leaders is not whether the leader is an extraordinary person or possesses any exceptional qualities, but rather whether the followers are convinced this is the case.

In the years after many researchers followed upon the works of Weber and attempted to characterize charismatic leadership. House (1977) characterized charismatic leaders as dominant, self-confident, and by setting high expectations for their followers, whilst

expressing confidence in the follower’s ability to meet those expectations. Other researchers complement those characteristics by adding personal charm, attractiveness, persuasive communication, and the ability to create desired future images in front of others (Drory &

Gluskinos, 1980; Gardner & Avolio, 1998; Judge et al., 2009). So, through a combination of inspirational motivation and idealized influence (Bass, 1997; Bass & Avolio, 1993),

charismatic leaders may be able to provide meaning for their followers in a way they can influence their actions and behavior.

Plentiful of preliminary research investigated the behavioral follower consequences of charismatic leadership and found that charismatic leadership can enhance performance (DeGroot, Kiker, & Cross, 2000; Kirkpatrick & Locke, 1996), followers’ trust (Jung &

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Avolio, 2000), work motivation (Choi, 2006), work engagement, and organizational

citizenship behaviors (Babcock-Roberson & Strickland, 2010). The further topic of interest in this research is the last-mentioned follower behavioral consequence, organizational

citizenship behavior (OCB). More specifically, this thesis aspires to gain a deeper

understanding of the behavioral follower consequences of charismatic leadership on OCB.

2.2 Organizational citizenship behavior

Organizational citizenship behavior occurs when an employee performs a behavior that goes beyond what is stated in this employees’ job description (Meyer & Allen, 1997). When measured among employees, OCB is described as an employee carrying out behavior that contributes to the goals of the organization by putting in more effort than essentially is required (Srivastava & Saldanha, 2008). Besides, OCB entails behavior for which no training is provided and includes behavior that is not rewarded when performed or punished for when it is not performed (Organ, 1988). To exemplify, here are some examples from prior research of how an employee can engage in OCB: proposing suggestions when facing a problem, giving interpersonal help to co-workers, volunteering for activities, following rules, and generalized compliance (Barbuto, 2000; Den Hartog, De Hoogh, & Keegan, 2007; Meyer &

Allan, 1997; Podsakoff et al., 2000; Smith et al., 1983).

Many decades ago, OCB already proved to be a key component for organizational survival (Katz, 1964). When OCB is performed by individuals within a group, the quantity and quality of that group’s product output and team effectiveness are increased (Podsakoff, Ahearne, & Mackenzie, 1997). Thus, organizations with employees engaging in OCB are seen as higher quality organizations with better operational efficiency and higher customer satisfaction (Walz & Niehoff, 2000). OCB being an important factor to organizational success, highlights once again why it is so desirable for organizations to have employees engaging in OCB.

According to Organ (1988), there are five different types of OCB. First, consciousness, which includes working hard and adhere to the rules and regulations.

Secondly, sportsmanship, which is working positively in both the good and the bad times.

Thirdly, civic virtue, which is about taking part in the daily life of the organization.

Furthermore, courtesy, which involves respecting your colleagues. And finally, as fifth type, altruism, which means being helpful to others. The present research mainly focuses on the types of OCB that include support and respect for colleagues, thus courtesy and altruism of employees. Nevertheless, no clear distinction between the two is made.

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Rioux and Penner (2001), propose that three familiar motives can result in OCB. First, prosocial values, being helpful and building good relationships with others in the

organization. The motive is called organizational concern. This involves being proud of the organization and caring about the company which in turn increases OCB. The final motive is impression management, trying to make yourself look good in front of others (Bolino, 1999).

Rioux and Penner (2001) finally conclude that the motives prosocial values and organizational concern are most likely to cause and thus predict OCB compared to the impression management motive. However, like the five different types of OCB by Organ (1988), in this research, no clear distinction between the three motives is made.

2.3 Charismatic leadership on organizational citizenship behavior

Through the combination of inspirational motivation, idealized influence (Bass, 1997; Bass &

Avolio, 1993), personal charm, attractiveness, their strong communicative skills, and ability to create a desired future image (Drory & Gluskinos, 1980; Gardner & Avolio, 1998; Judge et al., 2009), charismatic leaders succeed in ensuring that employees work towards the goals of the organization and let the collective interest prevail over the individual. Podsakoff et al.

(1990) see the trust that employees have in their manager as the most important explanatory factor. They cite Yukl (1998), among others, who stated that effective leaders can influence and change the basic norms, values, and attitudes of employees. These can also be collective interests, causing employees to display behavior that goes beyond their interests and that makes them willing to perform more than the organization expects of them as a minimum, for instance, engaging in organizational citizenship behavior. Therefore, the following

expectation has been formulated:

H1: Charismatic leadership (CL) is positively related to organizational citizenship behavior (OCB).

2.4 The perspective of social exchange

In the leadership literature, charismatic leadership is shown to be highly related to transformational leadership (e.g., Avolio, Bass, & Jung, 1999; LePine et al., 2016). Both charismatic leaders, as well as transformational leaders, inspire and motivate their followers with strategic vision (Bass, 1997). Nevertheless, as compared to transformational leadership, charismatic leadership accentuates the development of stronger interpersonal connections between leader and follower (Avolio et al., 1999), which highlights the importance and

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frequency of social exchanges in the establishment of such connections (Blau, 1964). Thus, charismatic leadership and transformational leadership are both vision-oriented (Rowold &

Heinitz, 2007), but the two leadership styles are conceptually distinguished with different influence mechanisms on the follower (Yukl, 1999). More specifically, whereas a charismatic leader influences their followers through the development of social exchange relationships (Blau, 1964), this is not shown to be a characteristic of transformational leadership.

Social exchange theory (SET) is a fusion of multiple conceptual models that share common features rather than a single theory (Cropanzano, Anthony, Daniels, & Hall, 2017;

Cropanzano & Mitchell, 2005). All the theories in the SET family agree on the creation of a series of interactions and transactions between at least two parties (Mitchell, Cropanzano, &

Quisenberry, 2012), in which benefits and resources are traded based on the beliefs of reciprocity and is proposed to foster beneficial ongoing relationships (Gouldner, 1960).

According to Colquitt and his colleagues’ review (2014), SET has become one of the most prominent conceptual paradigms in organizational psychology and for explaining organizational behaviors, including the consequences of leader-follower relationships. In other words, the process of social exchange between the follower and charismatic leader plays a decisive role in the follower’s development (Kark & Shamir, 2002) and is expected to change the follower’s behaviors (Shamir et al., 1993). Thus, it is imperative for leadership research, focusing on charismatic leadership and its consequences, to take a social exchange approach. Therefore, this thesis uses the perspective of the social exchange approach as a foundation to investigate the potential dark side consequences of charismatic leadership.

2.5 The leader-member exchange relationship

A theory that is based more on the relationship between the supervisor and the individual employee and their interaction process is the 'leader-member exchange' (LMX). This is a measure of the quality of the mutual relationship and trust between the leader and the individual employee (Deluga, 1994; Graen & Uhl-Bien, 1995: Green, Anderson & Shivers, 1996). The behavior of both the leader and the employee defines the quality of the

relationship. The LMX theory proposes that a leader approaches each subordinate differently and that the relationship between leader and subordinate evolves over time and that the quality affects attitudes and behaviors, such as mutual trust, loyalty and support, and mutual respect. This interaction process can therefore be seen as ´social exchange´ (Graen & Uhl- Bien, 1995; Gerstner & Day, 1997; Liden, Sparrowe & Wayne, 1997; Sparrowe & Liden, 1997; Yukl, 1998).

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Subsequently, the charismatic leader influences the employee's feelings, norms, and values by, among other things, providing an attractive vision of the future and, as a role model, displaying exemplary behavior in line with this vision (Bass, 1985). These wishes and expectations of the employee are in line with the collective goals and thus an increasingly strong relational bond develops with the employee (LMX) (Deluga, 1992). Employees tend to respond positively to leaders who inspire and motivate (Judge & Piccolo, 2004). Moreover, if employees have received positive treatment in the first place, they would feel urged to

reciprocate the favor by investing more inputs (Adams, 1965). This positive attitude may lead them to invest in a good relationship (Maslyn & Uhl-Bien, 2001). This leads to the following hypothesis:

H2a: CL is positively related to leader member exchange (LMX).

Additionally, there is a good relationship with the employee, managers may appeal to a higher social need of the employee to serve the collective interest above short-term self- interest. In a high-quality LMX, the trust, respect, but also expectations that managers and employees have of each other and themselves are higher (Graen & Uhl-Bien, 1995). OCB is a means by which employees can meet these expectations. Support has been found for the hypothesis that the quality of the relationship has a positive impact on several individuals and organizational outcomes, including employee commitment and the extent to which the

employee is willing to make extra effort to perform (De Vries, Roe & Tailleu 2002; Graen &

Uhl-Bien, 1995). Furthermore, in an extensive meta-analysis, many researchers have shown a positive relationship between LMX and OCB (Truckenbrodt, 2000; Podsakoff, MacKenzie, Paine & Bachrach 2000; Hackett, Farh, Song & Lapierre 2003; Ilies, Nahrgang and Moreson, 2007). Leading to the following hypothesis:

H2b: LMX is positively related to follower organizational citizenship behavior.

Mediation occurs when a relationship between an independent and dependent variable can be fully or partially explained by a mediating variable. In other words, the mediating variable plays an essential role and can help to get a better understanding of the relationship between two variables. A mediating variable is a variable that serves as a mechanism between the relationship of the independent and dependent variables. Thus, the independent variable shapes the mediating variable, and the mediating variable shapes the dependent variable. So, the mediating variable is a dependent variable on the independent predictor variable and an

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independent predictor variable on the outcome variable. In this study, charismatic leadership is the predictor variable, LMX is the mediating variable and OCB is the outcome variable.

Charismatic leadership, through an appealing vision of the future, establishes a working climate in which employees feel motivated, inspired, and supported by their manager. In addition, employees feel encouraged to work towards the presented desired image of the future and can take on new and unforeseen challenges, as well as helping their colleagues to do so (Porter et al., 2003). Moreover, charismatic leadership has a strong focus on personal interactions with the followers, including mutual sharing of information, resulting in a high-quality working relationship. Other characteristics of a high LMX are high levels of respect, loyalty, and mutually experienced obligations. This in turn leads to positive treatment by the supervisor and good task performance by the employee, quid pro quo. Thus, the leader- follower dyad fulfills each other's expectations (Liden & Maslyn, 1998). Therefore, the following is expected for this research:

H2c: LMX mediates the positive relationship between CL and follower OCB.

2.6 The dark side of charismatic leadership

Up until now, most of the research conducted on charismatic leadership has mainly focused on its positive consequences (see Banks et al, 2007, for a review) with comparably few studies investigating the potential dark side of charismatic leaders (House & Howell, 1992;

Paunonen et al., 2006; Sankowsky, 1995) and even fewer addressing the potential negative consequences for the followers of charismatic leaders (Howell & Shamir, 2005). As addressed in the previous chapters, it became evident that, through their interactions and social

exchanges, charismatic leaders can strongly influence the people around them. Therefore, it is essential to gain a fuller understanding of the possible dark side of charismatic leadership, especially regarding the hidden negative consequences for subordinates of charismatic leaders. This present thesis seeks to fill this research gap by investigating a possible dark side leadership trait, namely leader bottom-line mentality.

2.7 Leader bottom-line mentality

A bottom-line mentality (BLM) can be seen as exclusively focusing on one factor that is the decisive factor when one is to be evaluated, this results in all other factors being perceived as irrelevant, and these will therefore be ignored (Wolfe, 1988). According to Wolfe, these bottom-line outcomes often consist of financial performance measures. Leaders that hold a high level of BLM are in such intensified focus on the achievement of one particular outcome

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that they generally tend to neglect all other meaningful values like complying with moral and social norms (Barsky, 2008). It is the omission of other essential factors, such as important processes and values, rather than just the focus on a bottom-line goal that results in high BLM being dysfunctional. The pledge to purely one goal that BLM entails is restraining the

approachability to other goals (Shah, Friedman & Kruglanski, 2002; Barsky, 2008;

Greenbaum et al., 2012).

Prior research on BLM concluded that, that employees commonly perceive the

relationship with their leader who engages in BLM as a low-quality leader-member exchange partner. Which results in the employee withholding the behavior that the leaders high in BLM desire from them (Quade, Mclarty & Bonner, 2019). In addition, other research concluded that if leaders are precarious about their ethical values toward their employees, these

employees consider bottom-line results as critical when ethical guidelines are absent, leading to cheating and unethical pro-leader behavior (Farasat, Azim & Ali, 2019; Mesdaghinia et al., 2019; Trevino & Brown, 2004). Furthermore, Greenbaum et al., (2012), point out that leader BLM is associated with subordinate employee BLM and subsequently results in employees working against each other in favor of themselves, due to the so-called social undermining behavior. This co-worker undermining behavior is in contradiction with the interpersonal help to co-workers resulting from employees engaging in organizational citizenship behavior, as described in the previous chapter on organizational citizenship behavior. In line with the aforementioned and the negative reciprocity beliefs resulting from the misbalance in the social exchange relationship, the following hypothesis is created:

H3: Leader bottom line mentality (BLM) moderates the positive relationship between CL and LMX in such a way that the relationship becomes less positive the higher the bottom-line mentality of the leader.

Combining H2c and H3, we further infer that the mediating effect of LMX may also be influenced by leader BLM. In detail, when leaders display high levels of BLM, charismatic leadership can decrease LMX, which in turn leads to less performed employee OCB. On the contrary, in the case of low-BLM supervisors, charismatic leadership has more impact on LMX, so the impact of charismatic leadership on OCB is more transferred through LMX.

Following the above analysis, this study predicts that leader BLM could moderate the mediation effect of LMX on the impact of charismatic leadership on OCB and proposes the following hypothesis:

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H4: CL is related to OCB via conditional effects such that the interaction between charismatic leader behavior and leader BLM is related to LXM which in turn is related to OCB.

Following the hypotheses, the conceptual model in this study is shown in figure 1.

Figure 1: Conceptual model.

3.

Methodology

3.1 Design

The current research is based on a cross-sectional design where all data was collected through means of surveys. Both leaders and corresponding followers received a different survey and were asked to answer questions about, their demographics, their underlying relationship, and their position in the organization. Each leader-follower combination formed a couple which is called a dyad. Subsequently, each dyad was matched with a unique corresponding code. The leader survey consisted of 67 questions and the follower survey consisted of 85. The survey questions and corresponding references of the variables of interest in this research are added in the appendix.

3.2 Sample

The number of dyads collected in this study was 223. However, for a dyad to be valid both the leader as well as the follower had to complete the survey. Since there were some cases where only the leader or the follower filled in the survey the number of valid dyads remaining for the sample size was 188. When looking at the sample we can conclude that 67% of all respondents in leader positions are male. The leaders have an age range between 20 and 72 years (M = 42.63, SD = 11,62). Of those leaders, 74,5% successfully obtained a bachelor’s

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degree as a minimum level of education (bachelor’s 37,8%, master’s 33,5%, doctorate 3,2%).

When looking at leader tenure it became clear that two out of three (66%) are relatively new as leaders and acquired their leadership position within the past five years.

Of all followers, 54,3% is male and have an age range between 18 and 67 (M = 34,41, SD = 12.03). From those followers, 58,8% successfully obtained a bachelor’s degree as a minimum level of education (bachelor’s 36,7%, master’s 20,2%, doctorate 1,6%). Additionally, almost half (45,7%) of the followers indicated that the relationship with their supervisors started within the past two years. Besides that, only 69 out of 188 (36,7%) followers answered that their work location didn’t change at all because of COVID-19. Meaning that many of the employees had to work completely or partially at home. Given the fact that some of the

followers couldn’t meet their supervisor in person or could only meet very little, this can be of huge impact on the underlying leader-follower relationship and therefore COVID-19

consequences must be considered when examining the results.

3.3 Procedure

In this research, we approached 584 people consisting of 283 leaders and 301 followers. We as a group of six students had the goal to collect 180 completed leader-follower surveys, to be able to reach this number of dyads each student had to collect 30 valid pairs. Within this research, it was allowed that a person could be the leader in one dyad and a follower in another dyad. However, it was prohibited that the leader could act as a leader in multiple dyads. A person was considered a leader when he occupied a leading position in an

organization (e.g., manager or supervisor). A person was considered a follower when he or she occupied a follower position in an organization. As mentioned before, we approached 584 people in total. Given the fact that we had 188 successful dyads, in the end, gives us a success rate of 32.2%.

3.4 Measures

This research includes four main variables. These are charismatic leadership, bottom-line mentality, leader-member exchange, and organizational citizenship behavior. Charismatic leadership and BLM are both leader-rated whereas LMX and OCB were follower-rated.

Independent variable: charismatic leadership. CL was assessed using a five-item scale developed by De Hoogh, Den Hartog and Koopman (2004). Leaders were asked to rate

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the extent to which they engaged in charismatic leader behavior using a seven-point Likert scale ranging from 1 (strongly disagree) to 7 (strongly agree). Typical items included “I’m able to make others enthusiastic about his/her ideas.” And “I have a vision and imagination for the future.” In this study, Cronbach’s alpha for this scale was 0.826.

Dependent variable: Organizational citizenship behavior. OCB was measured using an eight-item scale developed by Lee and Allen (2012). Followers were asked to rate their

organizational citizenship behavior using the seven-point Likert scale (where 1 = strongly disagree and 7 = strongly agree). Sample items included “I am willing to give my time to help others who have work-related problems” and “I assist others with their duties.” The

Cronbach’s alpha for this scale was 0.826.

Mediator variable: leader-member exchange. LMX was measured using a five-item scale adapted by Graen and Uhl-Bien (1995). Respondents were asked to rate the LMX between them and the direct supervisor using a tailored five-point Likert scale for each question. Typical items included “How well does your leader understand your job problems and needs?” and “Do you know where you stand with your leader, and do you usually know how satisfied your leader is with what you do?” In this study, Cronbach’s alpha was 0.793.

Moderator variable: bottom-line mentality. Leader BLM was obtained using a four- item scale developed by Greenbaum et al. (2012). Leaders were asked to rate themselves using a seven-point Likert scale ranging from 1 (strongly disagree) to 7 (strongly agree).

Sample items included “I treat the bottom line as more important than anything else.” And “I am solely concerned with meeting the bottom line.” The Cronbach’s alpha in this study was 0.802.

Control variables. According to previous research, it is advised to control for the effect of personal demographic characteristics (Howel et al., 2015). For this reason, this research included the following six control variables leader gender, leader age, leader tenure, follower gender, follower age, and follower tenure. Age and tenure were both measured in years.

Whereas gender was constructed as follows 1=male and 2=female.

3.5 Analytical Plan

The first step in the analytical strategy process was checking for missing, incomplete, or incorrect values. Since the survey was set up in a way where it was not allowed to leave a question unanswered no unanswered questions were remaining. However, there were two incorrect values. Two people responded that their age was 1975 as opposed to 46. After adjusting there were no missing, incomplete, or incorrect values left. Subsequently, to

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examine the consistency of the measurements the reliabilities were tested. The reliability checks were executed for the following four main variables leader charisma, leader bottom- line mentality, leader-member exchange, and follower organizational citizenship behavior.

The test resulted in a Cronbach’s alpha, which serves as an estimator for internal consistency.

For a variable to have a high level of internal consistency the Cronbach’s alpha should be above 0.7. As indicated in table 1, all variables have a Cronbach’s alpha >.7. To be able to test the direct effect of charismatic leadership on follower OCB, linear regression was

conducted with charismatic leadership being the independent variable (IV) and follower OCB being the outcome variable (OV). Finally, to test both the moderating effect of leader bottom- line mentality onto the effect of charismatic leadership on the leader-member exchange relationship as well as the mediating effect of LMX onto the effect of charismatic leadership on the expressed OCB by the employee, we used the PROCESS macro model 7 by Hayes (2018).

Table 1. Cronbach’s Alpha.

4. Results and analysis

4.1 Descriptive statistics

The means, standard deviation, reliabilities, and inter-correlations among the variables of interest in this study are exhibited in Table 2. As expected, charismatic leadership was positively related to LMX (r = 0.524, p < 0.01). And leader BLM was negatively correlated with OCB (r = -0.158, p < 0.05).

Table 2. Descriptive Statstics and Corelations.

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4.2 Hypothesis testing

To test all the hypotheses, the PROCESS macro model number 4 as well as model number 7 by Hayes (2018) were used. The variables included the independent variable (charismatic leadership), mediator variable (LMX), moderator variable (leader BLM), dependent variable (OCB). Besides, there was controlled for leader gender, leader age, leader tenure, follower gender, follower age, and follower tenure as controlling variables. As was expected, that gender, age, and time spent at the company would affect the ongoing leader-member exchange relationship.

Main effect and mediating effect test. The first hypothesis proposed that charismatic leadership was positively related to OCB. As indicated in table 3, the effect between charismatic leadership and OCB was shown as non-significant. This implies that this study did not prove that charismatic leadership has a positive effect on employee OCB.

According to hypothesis H2a, it was expected that charismatic leadership is positively related to LMX. The results in table 4 indicate that charismatic leadership indeed has a positive significant effect (b =0,3769, p=0,000). However, the results that concerned H2b were less extensive. It was proposed that LMX is positively related to follower organizational citizenship behavior. As opposed to hypothesized, the results in table 3 demonstrate that leader-member exchange does not have a significant relation with OCB (b =0,1418, p=0,1935). For this reason, H2b is not supported as well. After performing an additional model number four analysis from the PROCESS macro v3.5 by Hayes (2018), hypothesis H2c could be tested. As table 3 indicates, there was not only a non-significant b-path, found between LMX and OCB (b =0,1418, p=0,1935). But, following table 5, also a non-significant indirect of charismatic leadership on OCB via LMX (LLCI -0,0238; 0,1391). The effect is non-significant because the zero is included in the bootstrap intervals. This points out, that in this study, we did not find support that LMX is related to OCB. Neither as a direct effect nor as an indirect mediation effect from charismatic leadership on OCB.

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Table 3. Mediation table

Table 4. Moderation table

Table 5. Mediating indirect effect of charismatic leadership on OCB.

Cross-level moderating effect test. In the third hypothesis, H3, it was expected that leader BLM would moderate the positive relationship between CL and LMX in such a way that the relationship becomes less positive the higher the leader BLM. However, table 5 illustrates that there is only a significant positive effect from charismatic leadership on LMX.

This relationship is positive entails the more charismatic the leader the better the LMX relationship. The moderator leader BLM does not affect LMX in any way. Neither directly as a main effect nor as a combination with charismatic leadership as a moderation effect.

Moderated mediation effect test. Considering the fourth and final hypothesis, H4, it was proposed that the effect of charismatic leadership on OCB is mediated through LMX but that that mediation is moderated by leader BLM where leader BLM is moderating the path between charismatic leadership and the mediator of LMX. To test this hypothesis, we made use of the PROCESS macro model 7 by Hayes (2018). We investigated the indirect

relationship of charismatic leadership on OCB through LMX at higher levels (+1 SD) and

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lower levels (-1 SD) of leader BLM, following Bauer et al.’s (2006) method. As the results in table 6 demonstrate, there was no significant moderated mediation effect present in this study.

As opposed to predicted, the index of moderated mediation indicated a bootstrap interval of (,0266;0,171). Since this interval does include a zero there was no significant relationship found. And thus, contradicting our final research hypothesis that CL is related to OCB via conditional effects such that the interaction between charismatic leader behavior and leader BLM is related to LXM which in turn is related to OCB.

Table 6. Index of moderated mediation.

5. Discussion

Based on the perspective of social exchange, the main purpose of this thesis was to gain a fuller understanding of the role played by the charismatic leadership on employees engaging in organizational citizenship behaviour and the moderated mediation roles that leader BLM and LMX have on this relation. However, the results indicate, that the only effect shown to be significant was the relationship between charismatic leadership and LMX. All other

hypotheses were found to be non-significant. So consistent with prior theoretical reasonings in the literature charismatic leadership and LMX indeed show a positive relationship. Like Judge and Piccolo (2004) concluded, employees indeed tend to respond positively to leaders who inspire and motivate. In addition, in line with Maslyn and Uhl-Bien (2001), the positive attitude concerning employees and their urge to reciprocate lead them to invest in a good relationship.

Besides, this present study tried to argue that leader BLM played an important role in predicting OCB following charismatic leadership. Nevertheless, no significant relationship was found. Meaning that when charismatic leaders are engaging in high levels of BLM this would not harm the behavioral employee consequences in the form of expressed OCB.

Earlier research indicated that OCB was found to be a key factor to organizational survival (Katz, 1964), and organizations’ long-term success (Smith et al., 1983). Therefore, knowing

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that leader BLM would not jeopardize employees engaging in OCB is a contribution to the exciting literature.

Furthermore, by taking a social exchange perspective to analyze charismatic leader- follower relationships, this thesis also adds to the existing literature of social exchange by observing potential differences among the parties involved in a social exchange relationship when clarifying their social exchanges. Even though I have found no empirical evidence for the proposed mediating effects of different interpretations of social exchange in the

relationship between charismatic leadership and its behavioral consequences, the awareness of the theoretical phenomenon of different perceptions of social exchange adds to the social exchange literature and grants a starting point for future research on complicated social exchange relationships.

5.1 Managerial implications

As opposed to hypothesized, the only significant effect to be found in this research was the relationship between charismatic leadership and LMX. All other relationships, between the variables of interest, were shown to not be significant. Including the unethical leader behavior of bottom-line mentality. Although the results revealed that leader BLM did not moderate the relationship between charismatic leadership and LMX, organizations still need to be careful and contemplate the ethical value of candidates when recruiting and avert hiring immoral employees. More specifically, to diminish the potentially harmful effects that charismatic leaders may bring, organizations should pay close attention to leaders who engage in high levels of BLM and seek to reduce BLM among leaders. Moreover, it is recommended that organizations should make sure that certain moral principles and basic ethical values are followed during the pursuit of goals when selecting, hiring, and promoting socialization.

Furthermore, training programs should be implemented that can reduce leader BLM. These pieces of training have the potential to improve the morale of leaders, emphasize that ethical standards are not unimportant to bottom-line results, and support high levels of ethical leadership behavior. Which results in, more promising ongoing social exchange relationship between a charismatic leader and his or her subordinate.

5.2 Research limitations and future research suggestions

The first limitation to consider in this research is the way how leader BLM was obtained.

Through the means of a survey, leaders were asked to what extent, they, are engaged in a bottom-line mentality. So, in this case, leader BLM was based on the leader’s perception of

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their own BLM, as opposed to how the followers would perceive this mentality. It could well be that those followers were unaware of the bottom-line mentality their leader holds and therefore did not adjusted their subsequent behavior accordingly. The second limitation to consider is the poor timing, Due to the current COVID-19 pandemic, there were many restrictions present during the past 15 months. As a result of COVID-19, only 69 out of 188 (36.7%), indicated that their work location did not change. Other answers included working completely from home (30.3%) or working partially from home (25.6%). Working from home, and not having direct supervision from your supervisor, could have had a tremendous influence on the leader-follower relationship and the subsequent behavioral employee consequences. Furthermore, considering the research sample, 45,7% of the respondents indicated that the relationship with their leader emerged within the past two years.

Considering that almost half of the relationships in the sample, were not capable of meeting their supervisor, at all or very little, in real life may have had a big influence on their leader- follower relationship as well. Therefore, it is suggested to execute the same research again when there are no COVID-19 restrictions present.

Furthermore, as Bass (1985) and House (1977) once indicated, charismatic leaders are expected to hold advantageous positions compared to their followers due to their status, power, and resources. Thus, it may be possible for these leaders to develop inequitable exchange relationships with the followers that benefit themselves. Therefore, it is

recommended to further investigate the incomparable circumstances between charismatic leaders and their followers.

Finally, this research was based on the perspective of social exchange. Which Colquitt and his colleagues (2014) described as one of the most promising conceptual paradigms in organizational psychology and for explaining organizational behaviors, such as leader- follower relationships. However, the effects of charismatic leadership on follower behaviors can also arise through a social identity a personal identification perspective (Shamir et al., 1993). Under these circumstances, followers of charismatic leaders are more inclined to identify with their leaders and behave in ways that are desirable for their leaders. For instance, followers can see their charismatic leader as a role model and may perceive them as

extraordinary and exceptional (Yukl, 1999) and for this reason, become dependent on the leader, lose their judgment, avoid making decisions and solely rely on the leader’s direction (Kark et al., 2003; Willner, 1984). Therefore, future research could use the logical flow of social identity as a starting point to delve into the relationships between a charismatic leader and the possible dark side behavioral employee consequences.

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6. Conclusion

This research aspired to gain a fuller understanding of the possible dark side of charismatic leadership, especially regarding the hidden negative consequences for subordinates of charismatic leaders. To investigate that impact, the following research question was formulated: How does leader bottom-line mentality impact the relationship between charismatic leadership and organizational citizenship behavior? To ensure a thorough all- compassing answer to this research question, 188 leader-follower dyads from organizational teams were collected through the means of a survey. However, after analyzing the results only a positive significant effect between charismatic leadership and LMX was found. The positive effect implies the more charismatic the leader the better the LMX relationship. As opposed to hypothesized, there were no other significant direct relationships present in this study. In addition, the expected moderated mediation effect, that leader BLM could moderate the mediation effect of LMX on the impact of charismatic leadership on OCB, was also shown to be non-existent. Noteworthy limitations of this thesis included both the way the leader BLM mentality was measured as well as the bad timing of the research, due to COVID-19. Given the fact, that this could have been of a big influence on the results it is recommended to

execute the same research again when there are no COVID-19 restrictions present. Finally, another suggestion for further research is to use the concept of social identity to investigate the potential dark side consequences of charismatic leadership on follower behavior. This research was founded based on the perspective of social exchange. By shifting the focus from a social exchange perspective to research based on the social identity theory, it may help to fill the excising research gap on charismatic leader’s possible dark side consequences. But up until now, the negative effects of a charismatic leaders’ BLM on employee behavioral

consequences, such as OCB, remain to be elucidated.

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8. Appendix

8.1 Survey questions

8.1.1 Charismatic Leadership questions 7-point Likert scale & follower rated.

De Hoogh, A. H. B., Den Hartog, D. N., & Koopman, P. L. (2004). De ontwikkeling van de CLIO: Een vragenlijst voor charismatisch leiderschap in organisaties [The development of the CLIO: A questionnaire for measuring charismatic leadership in organizations]. Gedrag en Organisatie, 17, 354 –382

1. My supervisor can make others enthusiastic about his/her ideas.

2. My supervisor has a vision and imagination of the future.

3. My supervisor displays conviction in his/her ideals, beliefs, and values.

4. My supervisor is always seeking new exciting opportunities for the organization.

5. My supervisor mobilizes a collective sense of mission.

8.1.2 Organizational Citizenship Behaviour questions 7-point Likert scale & leader rated.

Lee, K., & Allen, N. J. (2002). Organizational citizenship behaviour and workplace deviance:

The role of affect and cognitions. Journal of Applied Psychology, 87(1), 131–142.

1. The follower helps others who have been absent.

2. The follower willingly gives his/her time to help others who have work-related problems.

3. The follower adjusts his/her work schedule to accommodate other employees’ requests for time off.

4. The follower goes out of the way to make newer employees feel welcome in the team.

5. The follower shows genuine concern and courtesy toward co-workers, even under the most trying business or personal situations.

6. The follower gives up time to help others who have work or nonwork problems.

7. The follower assists others with their duties.

8. The follower shares personal property with others to help their work.

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8.1.3 Leader Bottom-Line Mentality questions 7-point Likert scale & leader rated.

Greenbaum, R.L., Mawritz, M.B. and Eissa, G. (2012), “Bottom-line mentality as an antecedent of social undermining and the moderating roles of core self-evaluations and conscientiousness”, Journal of Applied Psychology, Vol. 97 No. 2, pp. 343-359.

1. I only care about the business

2. I treat the bottom line as more important than anything else 3. I care more about profits than employee well-being

4. I am solely concerned with meeting the bottom line

8.1.4 Leader-Member Exchange questions 5-point Likert scale & follower rated.

Graen, G. B., & Uhl-Bien, M. (1995). Relationship-based approach to leadership:

Development of leader-member exchange (LMX) theory of leadership over 25 years:

Applying a multi-level multi-domain perspective. The leadership quarterly, 6(2), 219-247.

1. Do you know where you stand with your leader, and do you usually know how satisfied your leader is with what you do?

2. How well does your leader understand your job problems and needs?

3. How well does your leader recognize your potential?

4. Regardless of how much formal authority your leader has built into his or her position, what are the chances that your leader would use his or her power to help you solve problems in your work?

5. Again, regardless of the amount of formal authority your leader has, what are the chances that he or she would “bail you out” at his or her expense?

6. I have enough confidence in my leader that I would defend and justify his or her decision if he or she were not present to do so.

7. How would you characterize your working relationship with your leader?

The dark side of charismatic leadership, the impact of leader bottom-line mentality on the relationship between charismatic leadership and organizational citizenship behavior.