A longitudinal study of the effects of charismatic leadership and organizational culture on objective and perceived corporate performance

We investigated the combined effects of charismatic leadership and organizational culture on perceived and objective company performance using a longitudinal design. Employees (N=1214) in 46 branches of a large Dutch bank rated branch management on charismatic leadership, organizational culture in terms of work practices, as well as perceived organizational performance. Objective performance data were collected twice, two years apart. The split sample technique attenuated common source bias. Results of structural equation modeling, in which Time 1 financial performance measures were controlled, revealed that charisma increased financial performance; however culture did not do so. Culture and charisma were significantly related to perceived performance, and culture and charisma were interrelated. A longer time interval may be necessary before the effects of culture on financial performance become apparent. The findings are discussed against the backdrop of the value of intangible resources.