The Effect of Charismatic Leadership on Leader Centrality and Team Performance

Abstract

This study investigates how team leaders’ charismatic leadership affects their teams’ work performance. Drawing from social capital theory and the literature on social networks, we posit that team leaders’ charismatic leadership has a positive indirect effect on team performance via their centrality in the whole organizational influence network. We further identify informal leaders at the organizational level as a critical boundary condition under which charismatic leadership’s influence in the organizational network and its effectiveness in boosting team performance via leaders’ central positions are amplified. We tested our overall model using time-lagged, multi-source data collected from 150 insurance sales teams in two major provinces in China. The results lend support to our propositions. Our study contributes to the literature by illuminating a unique influence process that charismatic leadership shapes leaders’ central positions in the organization network and in turn their team performance.