Linking the Big Five-Factors of personality to charismatic and transactional leadership; perceived dynamic work environment as a moderator

ANNEBEL H. B. DE HOOGH^*, DEANNE N. DEN HARTOG^
AND PAUL L, KOOPMAN^
^Department of ^ork and Organizaiional Psychology, Free University, Amsterdam, The Netherlands
^Department of Management. University of Amsterdam Business School. Amsterdam, The Netherlands

Summary

In this multi-source .study we investigated the relationships between the Big Five personality
traits and both charismatic and transactional leadership behavior, and whether dynamism (the
degree that the work environment is deemed dynamic) moderates these relationships. We also
tasted whether dynamism moderates the relationship between leadership behavior and effectiveness.
Personality was measured through self ratings using the NEO-Pl-R. Subordinates
rated their leaders’ behavior, and peers and superiors provided ratings of effectiveness. Consistent
with trait activation theory, resulls showed that perceived dynamic work environment
moderated the relationships of four of the Big Five-Factors with both charismatic and transactional
leadership. Also, charismatic leadership was positively related to perceived effectiveness,
but only in dynamic contexts. Copyright iO 2005 John Wiley & Sons, Ltd.

Introduction

In recent years tbere bas been a resurgence of interest in research on personality traits of effective leaders.
This is partly due to the progress that has been made in the field of charismatic or transformational
leadership theory, which attributes importance to personality in predicting leader behavior and
effectiveness (Bryman, 1992; Den Hartog & Koopman, 2001 ). In addition, this interest can be linked to
tbe emerging consensus regarding tbe five-factor view of personality tbat provided a new framework to
integrate empirical findings (e.g., Digman, 1990; Goldberg, 1990).
Recent work demonstrates that stable individual differences in leadersbip do exist (e.g.. Judge,
Bono, Ilies, & Gerbardt, 2002). However, unambiguous links between tbe five factors and leader

bebavior have been difficult to establisb (e.g., Bono & Judge. 2004; Crant & Bateman, 2000; Judge &
Bono. 2000; Ployhart, Lim, & Cban, 2001). To date there has been little attention in tbe leadership
literature for the principle of trait activation, which holds that personality traits require trait-relevant
situations for their expression. In other words, an individual will bebave in trait-like ways only in tbose
situations that are relevant to tbe given trait (Tett & Burnett. 2003). Drawing on trait activation tbeory.
tbe relationsbip between personality and charismatic and transactional leadersbip may differ depending
on the context and such relationships may only be present in situations in wbich tbese leadersbip
styles encompass viable, trait-relevant responses.
Tbe present study examines the extent to wbich the work environment is dynamic (i.e., cbaracterized
by challenge and opportunities for change) as a possible moderator of the personality-leadership style
relationship. First, we examine tbe five factors of personality in relation to charismatic and transactional
leadersbip and test wbether the extent of dynamism in the work environment moderates these
relationships. Second, we also address tbe relation.ship between leadership and effectiveness and test
for the potential moderating effects of the context in this relationship.

Charismatic and Transactional Leadership


Current researcb and tbeory on leadership strongly emphasizes charismatic or transformational
models of leadership as opposed to what Burns (1978) and Bass (1985) have called transactional
models of leadersbip. Transactional leaders aim to maintain tbe status quo by rewarding subordinates’
efforts and commitment. Cbarismatic or transformational leaders, on the other hand,
are believed to change tbe status quo by infusing work witb meaning so tbat followers” energies
are mobilized to respond quickly and effectively to demands of the environment (e.g.,
Bass, 1985; Bums, 1978; House, 1977; Pawar & Eastman, 1997; Waldman. Ramirez, House, &
Puranam, 2001). Altbough transformational and charismatic leadership models differ
somewhat in the way the components are conceptualized, tbey are often treated as equivalent
(Yulk, 1999). In tbe present study, we will use the terms cbarismatic and transformational leadership
interchangeably.
Aside from the articulation of an attractive vision for the organization and behaving in ways that
reinforce the values inherent in that vision, some authors hold tbat charismatic or transformational
leadership sbould also include empowering behaviors such as, delegation of responsibilities to followers,
enbancing followers’ capacity to think on their own and encourage them to come up with
new and creative ideas (Yukl, 1999; cf. Dvir, Eden, Avolio, & Shamir, 2002; Kark. Shamir, & Cben,
2003). Transactional leaders influence followers through task-focused behaviors; tbey clarify expectancies,
rules and procedures, empbasizing a fair deal with subordinates (Bass, 1985; Bums. 1978;
House. 1996). Charismatic leadersbip is believed to build on and augment tbe impact of transactional
leadersbip and is expected to motivate followers perform beyond expectations (Bass, 1985; Bums,
1978; House, 1977).
Cbarismatic leadership theories have made considerable progress in addressing effective leadership
(Yukl, 1999). Many empirical studies and a number of meta-analyses bave found that charismatic or
transformational leadersbip styles are positively related to perceptual and sometimes even financial
performance measures, and tbat these relationships tend to be stronger than those of transactional
leadersbip (e.g., Bycio, Hackett, & Allen, 1995; Fuller, Patterson, Hester, & Stringer, 1996; Howell
& Avolio, 1993; Judge & Piccolo, 2004; Lowe, Kroeck, & Sivasubramaniam, 1996; Waldman et al,,
2001).

Most researchers concerned with charismatic leadership attribute importance to personality in predicting
leader behavior and effectiveness (Bryman, 1992; Den Hartog & Koopman, 2001; Jacobsen &
House, 2001 ; Judge & Bono, 2000). Over the last decade or so, numerous theoretical models and several
empirical studies have sought to identify personality traits of charismatic and transactional leaders
(e.g., Bono & Judge, 2004; Church & Waclawski, 1998; Crant & Bateman, 2000; De Hoogh et al.,
2005; Hetland & Sandal, 2003; House & Howell, 1992; Howell & Avolio, 1993; Howell & Higgins,
1990; Judge & Bono, 2000; Kuhnert & Lewis, 1987; Ployhart et al., 2001; Ross & Offermann, 1997;
Sosik, Avolio, & Jung, 2002; Sosik & Dworakivsky, 1998). Together these conceptual models and
empirical studies suggest that various personality traits are possible antecedents of charismatic and
transactional leader behavior.

Five-Factor Model of Personality and Leadership
In personality theory, evidence supporting a five-factor view of personality has been accumulating,
which has led to an emerging consensus on the taxonomy (e.g., Digman, 1990; Goldberg, 1990). Current
personality theory holds that the basic structure of personality may consist of five factors, often
labeled: Extraversion, Agreeableness, Conscientiousness, Neuroticism, and Openness to experience
(see e.g., Costa & McCrae, 1992b). All five factors of personality are thought to encompass several
correlated but distinct lower level dimensions or traits. The communality of the specific traits defines
each of the five broad factors. The five factors are found consistently through different research methods
across time, contexts, and cultures (e.g., Digman, 1990; Digman & Shmelyov, 1996; McCrae,
Costa, del Pilar, Rolland, & Parker, 1998) and show evidence of heritage (Jang, McCrae, Angleiter,
Riemann, & Livesley, 1998).
In the early days of personality and leadership research there was no taxonomic structure of personality
to aid theory development and testing. As a resuh, numerous different personality traits were
investigated, making integration of results difficult. Nowadays, the Five-Factor model provides a unified,
comprehensive theoretical framework for comparing and accumulating empirical findings.
Accordingly, Judge and colleagues (2002) used the five-factor mode! as an organizing framework in
their meta-analysis on personality and leadership. The five-factor model explained lópercent of variance
in leader effectiveness, indicating that leader effectiveness can, to some extent, be predicted from
personality traits when these are organized according to the five-factor model.
To date, little is known about how personality affects leadership. Several studies have linked the Big
Five traits to charismatic leadership and transactional leadership. However, results have differed from
study to study (e.g., Crant & Bateman, 2000; Judge & Bono, 2000; Ployhart et al., 2001). For example.
Judge and Bono (2000) studied a sample of participants of a community service leadership program
who had jobs in a variety of industries and found that self-reports of agreeableness and to a lesser
extent extraversion and openness to experience were related to charismatic leadership. Yet, Crant
and Bateman (2000) studied managers of a financial service organization and reported significant
effects for extraversion but not for the other dimensions of the Big Five. Recently, Bono and Judge
(2004) used the five-factor model as an organizing framework in their meta-analysis on personality
and transformational and transactional leadership. Considerable variability in relationships (strength
and direction) was found across studies included in the meta-analysis, which resulted in generally
weak mean validities for the Big Five factors.
These inconsistent findings suggest that the context in which behavior is assessed may play an
important role. A growing stream of research in the personality field suggests that personality

expression in behavior varies by situation type (e.g., Chatman, Caldwell, & O’Reilly, 1999; Tett &
Burnett. 2003; Tett & Guterman, 2000). However, this premise has received little attention in leadership
research to date.

Trait Activation and Charismatic and Transactional Leadership
According to trait activation theory, personality traits require trait-relevant situations for their expression.
In other words, an individual behaves in trait-like ways only in those situations that are relevant to
the given trait. Thus, if one wishes to assess nurturance, one must observe people in situations where
nurturance is a viable response (Tett & Burnett, 2003). Similar points were raised long ago by
researchers such as Murray (1938), Aliport (1966), Bem and Funder (1978) and more recently by
Chatman et al. ( 1999). The deliberate provision of cues for expressing targeted traits can also be recognized
in previous research by McClelland, Atkinson, Clark, and Lowell (1958) using the Thematic
Apperception Test (TAT). Trait activation theory has received direct support in a study by Tett and
Guterman (2000), who showed that correlations between self-report trait measures and trait-relevant
behavioral intentions are stronger in situations providing appropriate cues for trait expression.
Drawing on trait activation tbeory, the relationship of personality with charismatic and transactional
leadership may differ depending on the context in which these leadership styles can be conceived as
viable, trait-relevant responses.
Several authors have argued that charismatic leadership is more likely to emerge in environments
characterized by a high degree of challenge and great opportunities for change, i.e.. dynamic environments
(e.g., Bass, 1985; Conger, 1993; Shamir & Howell, 1999). Shamir and Howell (1999, p. 264),
for example state: ‘Charismatic leaders are more likely to emerge ( . . . ) in environments characterized
by a high degree of change and by great opportunities for change than in stable environments that offer
few inducements for change or opportunities for change.’ Likewise, Bass, and Avolio (1993). suggest
that transformational leaders are more likely to come up in organizations facing rapidly changing technologies
and markets than in organizations operating under routine and stable conditions. Shamir and
Howell (1999, p. 264) note with respect to charismatic leaders that: ‘While perceptions of the environment
as calling for change and the identification of opportunities for change are not fully determined
by environmental conditions, and potentially exist in all circumstances, they are more likely to emerge
in dynamic environments.’ Such dynamic environments offer challenge and opportunities for change,
require new interpretations, novel responses, and different levels of effort and investment. In dynamic
environments subordinates’ self-concepts, values and identities can more readily appeal to and
engaged, because of strong orientation needs (Sbamir & Howell. 1999). In contrast, in stable environments,
leaders have less room to take dramatic and ‘charismatic’ actions, as these environments offer
fewer inducements for change or opportunities for change. Thus, charismatic leadership may be more
likeiy to emerge in a dynamic than in a stable work environment.
There is some empirical evidence providing indirect support for the importance of a dynamic work
environment to the emergence of charismatic leadership. Previous research has found evidence of a
link between charismatic leadership and crisis (House, Spangler, & Woycke, 1991) as well as innovation
(Howell & Higgins, 1990). Furthermore, Pillai and Meindl (1998) showed that having an organic
structure was positively associated with the emergence of charismatic leadership in work units of a
large organization. Such organic structures tend to be flexible and innovative and face turbulent environments.
Thus, environments characterized by a high degree of challenge and great opportunities for
change (i.e., dynamic work envirotunents) may facilitate the emergence of charismatic leadership

more than environments that are more structured, stable, and orderly. Therefore, the extent to which an
environment is perceived to be dynamic may be especially important for studying tbe antecedents of
charismatic leadersbip.
Alternatively, a more stable environment may be more important for studying the antecedents of
transactional leadership. According to Bass (1985) transactional leadersbip is most likely to appear
in more routine, stable environments wbere goals and structures are clear and/or where members work
under formal contracts. Such leadership aims to keep the organization running smoothly and efficiently
by focusing on control by compliance to rules and maintaining stability witbin the organization rather
tban promoting change (Fry, 2003). Transactional leaders may be less likely to emerge in dynamic
circumstances because they tend to be less engaging, choosing to monitor exchange reiationsbips with
employees and maintaining the status quo rather tban focusing on change (Ployhart et al., 2001).
Therefore, tbe degree to which an environment is perceived to be stable may especially be important
for studying tbe antecedents of transactional leadersbip.
The results of a study done by Ploybart and colleagues (2001) among participants of a military
training support tbe idea that the strength of the link between personality and leader behavior may
depend on the context. They found that the effect sizes of the five factor constructs in their relation
to charismatic leadership were stronger for ratings during a two-day assessment exercise than for
ratings done at tbe end of a three months basic training. The two-day assessment exercise was
designed to challenge candidates’ leadership skills through placing them in dynamic and uncertain
situations. Ratings were collected to evaluate leadership skills over a series of challenging military
tasks. Compared to the three-month basic training, which formed a somewhat more stable, formalized
situation that was more predictable to candidates, tbe circumstances during the two-day
assessment were much more dynamic; offering recruits a great extent of challenge. Ployhart and
colleagues concluded from their results that tbe link between personality and charismatic leadership
might be strongest under conditions that call for charismatic leadership, namely more challenging,
dynamic conditions. This proposition has not yet been tested outside the military context. The
present study builds on and extends the research by Ployhart and colleagues (2001). We examine
the relationship between self-ratings of the Big Five-Factors of personality and subordinate ratings
of both charismatic and transactional leadership and we assess dynamic work environment as a
potential moderator of these relationships. Below we present our hypotheses for each of the Big
Five traits.

Big Five traits, dynamic work environment and leadership: hypotheses
Extraversion. Extraverts are social, assertive, active, bold, energetic, and adventurous. Individuals
high on extraversion are dominant in their bebavior and expressive wben interacting with others
(McCrae & Costa, 1987). Such characteristics play an important role in influencing, persuading and
mobilizing others and are argued to be important for charismatic leaders (Bass, 1985; House, 1977). In
line with these suggestions, in their meta-analysis, Bono and Judge (2004) found extraversion to be the
strongest and most consistent personality correlate of charismatic leadership.
In a dynamic work environment, extraversion may be especially important for cbarismatic leadersbip.
since in times of turbulence people tend to long for someone communicating clear sense of direction
(Shamir & Howell, 1999). Turbulence may also provide opportunities for leaders to take forceful
actions, which would be far harder or even unacceptable under steady state circumstances (House
et al., 1991 ). In tine with this, Ployhart and colleagues (2001 ) found that the effect size for extraversion
in explaining charismatic leadership was stronger under conditions of challenge than in a more stable

environment. Thus, we hypothesize that extraversion will be positively related to charismatic leadersbip,
especially so in a dynamic work environment.
Hypothesis I: Extraversion will be positively related to charismatic leadership and this relationship
will be stronger in dynamic than in stable work environments.
Openness to experience. Individuals scoring high on openness to experience are characterized by
traits such as imagination, unconventionality, autonomy, creativity, and divergent thinking (McCrae
& Costa, 1987). Their prowess in esoteric thinking and fantasy as well as deliberation of social values
(McCrae, 1996) may play a role in tbe articulation of an attractive vision, a key behavior for charismatic
leaders. Also, they are creative and divergent thinkers, open to cbange and new experiences
(McCrae & Costa, 1987) and display independence of judgment and autonomy (Woodman, Sawyer,
& Griffin, 1993). This may make them more likely to find new opportunities and to use unconventional
methods to reach organizational goals, behavior that is often seen as relevant to charismatic leaders
(e.g.. Conger & Kanungo, 1994; Conger, Kanungo, Menon, & Mathur, 1997), Empirical evidence
indeed links openness to experience to charismatic leadership (Bono & Judge. 2004; Judge & Bono,
2000).
In a dynamic work environment, openness may especially be important for charismatic leadership,
since tbese environments offer a high degree of challenge, opportunities for change and tbey require
new interpretations and novel responses. Accordingly, Ployhart and colleagues (2001) found that
openness to experience explained variance in charismatic leadersbip, but only in more cballenging
conditions. Therefore, we hypothesize that openness to experience will be positively related to charismatic
leadersbip, especially so in a dynamic work environment.
Hypothesis 2: Openness to experience will be positively related to charismatic leadership and this
relationship will be stronger in dynamic than in stable work environments.
Agreeableness. Agreeable individuals are altruistic, warm, generous, trusting, and cooperative
(McCrae & Costa, 1987; Costa & McCrae, 1992a). Tbe pro-social aspect of agreeableness may be
an asset to charismatic leaders as agreeable individuals are friendly and sympathetic and arouse liking
in other people (Costa & McCrae, 1988). Also, agreeable people are concemed witb others’ interests.
This may be a prerequisite to be able to understand subordinates” perspective and infuse tbeir work
with meaning, a central characteristic of cbarismatic leadership (Bass, 1985; Bums, 1978; House,
1977). Being concemed with others may also help cbarismatic leaders to attend to individual needs
of followers. This willingness and ability to attend to the individual needs of followers is the core
of individualized consideration, a leader behavior wbich many authors see as an important part of
transformational or cbarismatic leadership (e.g., Bass, 1985; Conger & Kanungo, 1994; Shamir,
Zakay, Breinin, & Popper, 1998). In line witb this. Judge and Bono (2000) found a positive relationship
between agreeableness and cbarismatic leadersbip. The measure of charismatic leadership used in the
present study combines the articulation of an attractive vision, providing meaning to follower’s work,
and role modeling of desired bebavior with empowering leader behaviors. These include aspects of
individualized consideration, intellectual stimulation and participation in decision-making. Researcb
has found agreeableness to be positively related to a preference for participative styles of management
(Stevens & Asb, 2001 ). To be able to delegate and sbare sensitive information one needs to be trusting
and straightforward, which both are facets of agreeableness. Taking these results together with the
positive relationship found by Judge and Bono (2000), this suggests a positive relationship between
agreeableness and our measure charismatic leadership might be found.
However, we feel that agreeableness may also be a bindrance to cbarismatic leaders, because highly
agreeable individuals tend to be submissive and conforming (see e.g., Graziano & Eisenberg, 1997). In

line with this and in contrast with tbe results reported by Judge and Bono (2000), Lim and Ployhart
(2004) found a negative relationship between agreeableness and cbarismatic leadership in their study.
Judge and Bono (2000) studied a sample of participants of a community service leadership program
who had jobs in a variety of industries, whereas Um and Ployhart conducted their study among military
personnel. Lim and Ployhart suggested that in critical, risky situations (such as the ones military
personnel are often confronted with) agreeableness may not contribute to perceptions of charismatic
leadersbip, since in times of turbulence people long for a strong leader, communicating a clear sense of
direction (Shamir & Howell. 1999). Highly agreeable individuals may tend to be overly compliant
and try to accommodate everyone, even when tbey have differing viewpoints or interests (see e.g.,
Graziano & Eisenberg, 1997). This may make them seem less decisive and less confident of tbeir
own vision, especially in times of turbulence wben such differences are likely to be more salient.
Agreeable people may tberefore be viewed as less cbarismatic under these circumstances. Whereas,
in a more stable context, agreeableness may be an asset to charismatic leaders, as it may help increase
the quality of their interaction with followers. Thus, we hypothesize tbat agreeableness will be
negatively related lo charismatic leadership in dynamic work environments, and positively in stable
environments.
Hypothesis 3: Agreeableness will be negatively related to cbarismatic leadership in dynamic work
environments and positively in stable work environments.
Transactional leaders engage in a relationsbip of mutual dependence witb tbeir followers, in wbich
the contributions of both sides are acknowledged and rewarded. As such, transactional leaders must
meet and respond to the reactions and changing expectations of tbeir followers (Kuhnert & Lewis,
1987). As cooperation and empathy are both hallmarks of agreeableness (Costa & McCrae, 1992a),
agreeabieness may be an asset for transactional leaders. Agreeable individuals also tend to be trusting
and straightforward wbicb may help in tbe process of offering a fair deal to subordinates, behavior
relevant to transactional leadership (Bass, 1985; Bums, 1978; De Hoogb. Den Hartog. & Koopman,
2004; House. 1996). In line witb this, tbe meta-analysis by Bono and Judge (2004) reported a positive
relationsbip between agreeableness and transactional leadersbip. However, tbere was considerable
variability in tbe size of correlations across the studies included in tbe meta-anaiysis. including
some studies reporting negative relationships. Tbus, tbere is sufficient room to test for potential
moderators.
Stable work environments provide a higb degree of structure witb little ambiguity in pursuing tbe
objectives of tbe job and sucb lack of ambiguity may help ensuring fair and equal treatment and setting
clear and stable guidelines. Agreeableness may be especially important for transactional leadersbip in
such an environment. In contrast, under more dynamic conditions, leaders wbo seem more compliant
and less decisive may be viewed as too passive and rated as less transactional. Tberefore, we hypothesize
that agreeableness will be positively related to transactional leadership in stable work environments
and negatively in dynamic work environments.
Hypothesis 4: Agreeableness will be negatively related to transactional leadersbip in dynamic work
environments and positively in stable work environments.
Conscientiousness. Conscientiousness encompasses dependability, responsibility, dutifulness,
deliberation, acbievement orientation, and a concem for following estabiisbed mies (McCrae & Costa,
1987). Conscientiousness could be seen as part of charismatic leadersbip. as highly conscientious leaders
may inspire followers to perform beyond expectation through setting bigb standards and acting
dutifully themselves (e.g.. Bass. 1985). However, as indicated, conscientiousness also reflects tbe tendency
to be cautious, thoughtful and a strict adherence lo standards of conduct (Costa, McCrae, & Dye,

1991 ). Moreover, Diener, Larsen, and Emmons ( 1984) found that need for order was negatively related
to choice of novel situations. Therefore, although conscientiousness may be an asset to charismatic
leaders, helping them to set challenging goals, conscientiousness may also be a liability, especially
in a dynamic work environment, as highly conscientious leaders may stick to agreed upon regulations
rather than grasp opportunities at hand. Thus, in a dynamic work environment, conscientiousness may
be negatively related to charismatic leadership. Bono and Judge (2004) found a positive relationship
between conscientiousness and charismatic leadership in their meta-analysis, but again the variability
across studies included in their analysis was considerable, including some studies reporting negative
relationships. Thus, there is sufficient room to test for potential moderators. Considering the above, we
hypothesize that conscientiousness will be negatively related to charismatic leadership in dynamic and
positively in stable work environments.
Hypothesis 5: Conscientiousness will be negatively related to charismatic leadership in dynamic
work environments and positively in stable work environments.
Transactional leaders are characterized by task-focused behaviors; they clarify expectancies, rules
and procedures, emphasizing a fair deal with subordinates (Bass, 1985; Bums, 1978; De Hoogh, Den
Hartog, & Koopman, 2004a; House, 1996). Since individuals high on conscientiousness are precise
and systematic and make detailed and thoughtful plans (Costa & McCrae, 1992a; McCrae & Costa,
1987), conscientiousness is likely to be positively related to transactional leadership. Furthermore, to
monitor successfully, one needs to strictly adhere to standards of conduct, also an element of conscientiousness.
Bono and Judge (2004) however do not find this hypothesized positive relationship between
conscientiousness and transactional leadership. The context may play a role here. We expect that conscientiousness
is especially important for transactional leadership in a stable work environment, as this
environment offers more prescribed, formalized and defined goals and structures. Under more dynamic
conditions, leaders who tend to stick strictly to the preset exchange relationships with employees and
stress maintaining the status quo even when conditions have changed and the former rules and procedures
may no longer apply or be fair, may be viewed as too passive or rigid and thus rated as less
transactional. Thus, we hypothesize that conscientiousness will be positively related to transactional
leadership in stable and negatively in dynamic work environments.
Hypothesis 6: Conscientiousness will be negatively related to transactional leadership in dynamic
work environments and positively in stable work environments.
Neuroticism. Neuroticism refiects the tendency to be anxious, defensive, insecure, and emotional
(McCrae & Costa, 1987). It is associated with a lack of self-confidence (McCrae & Costa, 1991).
In contrast, self-confidence is argued to be a central characteristic of charismatic leaders (Bass,
1990; House, 1977). Thus, neuroticism is likely to hinder charismatic leaders, since neurotic leaders
may be unable to picture a competence and trustworthy leader. Indeed, Lim, and Ployhart (2004) found
a negative relationship between neuroticism and charismatic leadership in their military sample. Judge
and Bono (2000) as well as Crant and Bateman (2000), however, failed to find the hypothesized negative
relationship between neuroticism and charismatic leadership. Lim and Ployhart (2004) suggested
that the existence of moderators on the relationship between neuroticism and transformational leadership
may explain these contradictive results. Compared with business leaders of the Judge and Bono
(2000) and Crant and Bateman (2000) sample, military personnel often have to work under hazardous
and life-threatening situations, hence the ability to remain calm, secure and non-anxious is critical.
Thus, in risky, tumultuous situations neuroticism may especially be a hindrance to charismatic leaders,
since in times of turbulence people long for a strong command structure and leadership. This may also
extend to dynamic situations. Therefore, we hypothesize:

Hypothesis 7: Neuroticism will be negatively related to charismatic leadership, and this relationship
will be stronger in dynamic than in stable work environments.
Charismatic leadership, transactional leadership and effectiveness
The first aim of the present study was to address the relationship between personality and charismatic
and transactional leadership, and to test the potential moderating role of a perceived dynamic work
environment. The second aim was to address the effectiveness of these two styles and assess whether
context also moderates this relationship. Several authors have argued that whereas transactional leaders
motivate subordinates to perform as expected, the transformational or charismatic leader inspires
followers to go beyond expectations (e.g., Bass, 1985; Bums, 1978; House, 1977). Transactional leaders
offer their subordinates a fair deal. Subordinates of such leaders know that their effort will result
in goal attainment and that they will be justly rewarded by their leader for doing what is expected from
them (e.g.. House, 1996). Charismatic leaders are believed to infuse followers’ work with values by
articulating an attractive vision, and to behave in ways tbat reinforce the values inherent in that vision,
so that followers become highly committed to the goal of the collective and achieve more then they are
expected to do (e.g., Shamir. House, & Arthur, 1993). Research shows that transformational leadership
tends to be more effective than transactional leadership (e.g.. Fuller et al., 1996; Judge & Piccolo.
2004; Lowe et al.. 1996). Thus, we hypothesize that charismatic will be strongly related to perceived
leader effectiveness, and transactional behaviors less so.
Hypothesis 8: Charismatic leader behavior is positively related to perceived effectiveness and more
strongly so than transactional leadership. • .
Above, we propose that the extent to which a work environment is perceived as dynamic may affect
the emergence or antecedents of charismatic and transactional leadership styles. There is also some
research that suggests that charismatic leaders are more effective in changeable, dynamic environments
than in more certain or stable ones. For example, Waldman et al. (2001) found that the relationship
between CEO charismatic leadership and firm financial performance was positive, but this only
held when environmental conditions were uncertain and changeable. Also, De Hoogh et al. (2004b)
found that the relationship between charismatic leadership and subordinates’ positive work attitude to
be stronger in such uncertain, unpredictable environments. As stated, we see a dynamic environment as
a relatively uncertain situation, characterized by a high degree of challenge and great opportunities for
change. In such an environment, charismatic leaders can more easily generate appeal for their vision
(Waldman et al., 2001 ; Trice & Beyer, 1986). Charismatic leaders can direct follower’s attention to the
existence of opportunities for change, increase their optimism regarding that change, and mobilize
their energies to devote themselves to the attainment of the vision. Such commitment and effort on
the part of the members is expected to enable organizations to respond more quickly and effectively
to environmental shifts and changes (Howell & Avolio. 1993; Shamir & Howell, 1999). As a result,
charismatic leaders are likely perceived as more effective in dynamic work envirotunents than in more
stable ones. Therefore, we hypothesize:
Hypothesis 9: The relationship between charismatic leader behavior and perceived effectiveness
will be stronger in dynamic work environments than in more stable work environments.
Thus the present study has two aims. First, we examine the relationship between self-ratings of the
Big Five-Factors of personality and subordinate ratings of charismatic and transactional leadership and
assess the role of a dynamic work environment as a potential moderator of these relationships. Second
we look at the relationship between leadership and effectiveness and again test the role of dynamism as

a potential moderator. Most previous studies use a cross-sectional design to investigate links between
personality and leadership. Here, we use a longitudinal design. Since the results of studies linking personality
to leadership may have potential benefits for tbe selection and development of leaders, the Big
Five-Factors were assessed during an evaluation of managerial potential (time I measurement, see also
method). At time 2, subordinates rated their focal manager’s leader behavior and peers and/or superiors
provided ratings of effectiveness. The focal managers themselves provided a measure of perceived
dynamic work environment (time 2). Managers’ own perceptions of the environment are most relevant
for explaining trait relevant behavior as compared to for example perceptions of subordinates or peers,
which is the primary aim of our study. Moreover, in this way, each of the variables measured in this
study was assessed by different raters or at different time points, minimizing common source and rater
bias. Tbe metbod is outlined in more detail below.

Organizational Context

The data for this article were collected in 2002/2003. At the time of the study the economy in the
Netherlands was in a period of a mild recession. Data collection was done in collaboration with
consultancy firm LTP, one of the leading management consulting firms in the Netherlands, especially
in the area of assessment. Besides assessment LTP operates in the areas of organization diagnostics,
organization development, culture change programs, management development, coaching
and HR-intemet tools. The company was founded in 1927 as an offspring of the Free University of
Amsterdam and works with many different Dutch and intemational client companies as KLM, ING.
Ernst & Young, ABN AMRO, Solvay, Nissan, as well as several state departments and the judiciary
(for example, all candidates for the position of judge in the Netherlands are assessed by LTP). LTP
still values its scientific background and regularly initiates and participates in researcb projects.
The sample in this study consists of 83 managers from many different backgrounds who underwent
an assessment for evaluating tbeir managerial potential either for selection (35percent) or
developmental purposes (65 percent) at LTP, and nine montbs later participated in our multi-source
feedback study. As an incentive, the managers were offered tbe opportunity to receive a multisource
feedback report on their leadership styles following participation in the follow-up study.
Most managers wbo had taken part in the management assessment for personnel selection purposes
and participated in the follow up study were given a positive advice regarding the job for which they
had applied (89.66 per cent). The managers were employed in a diverse cross-section of areas (e.g.,
production, sales, engineering, finance, human resource management), and organizational levels
(28 percent higher-level managers, 57 percent middle-level managers, 13 percent lower-level managers).
One third of the managers were women.

Method
Procedure
Participants of a 1-day assessment for evaluating managerial potential at a psychological consulting
firm (n=341) completed a personality inventory during this assessment (time 1). At the end of the

assessment day, all participants received a letter witb an invitation to take part in a 360-degree feedback
survey administration to be conducted nine months later. As an incentive, tbey were offered tbe
opportunity to receive a multi-source feedback report on tbeir leadership styles following participation
in the follow-up study. In total, 73.04percent indicated to be willing to participate by filling out tbe
relevant form. The final sample size consists of 83 managers who completed a personality inventory
during an assessment (time 1) and nine months later (time 2) participated in a multi-source feedback
study.
Nine montbs after they had participated in the assessment, survey packets were sent to the homes of
these candidates (time 2). Survey packets contained a questionnaire to be completed by tbe participant
him-or herself, and six other questionnaires to be completed by tbe subordinates, superiors, and peers
of the participant. A letter from the researchers assuring confidentiality was sent wiih each questionnaire.
The questionnaires filled out by others were completed anonymously and returned directly to tbe
researcbers in pre-addressed envelopes. Code numbers were included on surveys so that respondents
could be correctly matched for subsequent data analyses.
For 84 candidates we received subordinates surveys containing ratings of leadership style
(24.63 percent response rate). For 61 of these participants, superiors and/or peers provided ratings
of perceived leader effectiveness. Thus, we used self ratings to measure personality and dynamism,
subordinate ratings to measure leadership styles and peer and/or superior ratings to measure perceived
leader effectiveness, ensuring separate data sources.
Twenty-nine of the participants at time 2 had taken part in the management assessment at time 1 for
personnel selection purposes and 89.66 percent of them were given a positive advice regarding the job
for wbich they bad applied. The other 55 participants underwent the assessment for developmental
purposes. Tbe average age of the participants was approximately 40 years. Twenty-eight of these participants
were female.
In the self-report questionnaire at time 2 (n ^ 82), 83 percent of the participants indicated that tbey
had been in their cunent jobs for 6 montbs or more (99 per cent at least 3 months). Most participants
(82 per cent) had 6 or more subordinates reporting to them directly and 10 or more subordinates reporting
to them indirectly. The participants had jobs in a wide range of areas, including production, sales,
engineering, finance, human resource management, and so on. One third of these participants worked
in small to medium sized organizations, the other two thirds worked for organizations with more tban
500 employees. Twenty-tbree participants indicated that they were higher-level managers, 47 were
middle-level managers and 11 considerate themselves lower-level managers. One respondent indicated
be currently did not have a management position; therefore his data was left out of further analyses.
Summarizing, tbe sample in this study consists of 83 managers who completed a personality inventory
during an assessment for evaluating managerial potential (time )and nine montbs later (time 2)
participated in a multi-source feedback study. At time 2, subordinates (n ^ 256, mean ^ 3 per manager,
for 75 managers more tban one subordinate survey available) rated these managers’ leadership style. In
addition, superiors {n = 39) and/or peers (n ^ 69) provided ratings of perceived leader effectiveness
(/Ï ^ 61 managers, mean = 1.77 peer and/or superior rating per manager). At time 2, the focal managers
also filled out a questionnaire in which they indicated tbe degree to which they perceived tbeir work
environment to be dynamic in ^ 80). Figure 1 depicts the research design.
To check for selective non-response, tbe managers wbo participated in the multi-source feedback
study at time 2 were compared with those wbo did not. A multivariate analysis of variance including
gender, age and tbe Big Five-Factors suggested no significant differences, f(28,87365) ^0.94,
p > 0.05. Furthermore, we compared the managers in our study for which ratings of perceived leader
effectiveness were available with the group for whicb none were available. A multivariate analysis of
variance including gender, age. and leadership styles again suggested no significant differences,
f”(10, 8248) = 0.92, p > 0.05.

Big Five personality traits
The Big Five personality traits were measured with the 240-item revised NEO personality inventory
(Costa & McCrae, 1992b; Authorized Dutch translation by Hoekstra, Ormel, & De Fruyt, 1996; time
1), probably tbe most extensively validated self-report measure of tbe Five Factor model (Judge &
Bono, 2000), In the NEO-PI-R the broad five-factor constructs eacb represent six more specific traits,
called facets. Neuroticism is composed of the facets anxiety, angry hostility, depression, self-consciousness,
impulsiveness, and vulnerability. Extraversion consists of the facets warmth, gregariousness,
assertiveness, activity, excitement seeking, and positive emotions. Openness to experience
encompasses fantasy, aesthetics, feelings, actions, ideas, and values. Agreeableness includes tmst,
straightforwardness, altmism, compliance, modesty, and tender-mindedness. Finally, conscientiousness
is composed of competence, order, dutifulness, achievement striving. self-di.scipline, and deliberation.
Eacb facet is measured witb eight items, and thus each constmct is measured witb 48 items
(see for sample items Costa & McCrae, 1992b; Hoekstra et al.. 1996). Sample reliabilities for the flve
factors were 0.86 for neuroticism. 0.79 for extraversion. 0.64 for openness to experience, 0.69 for
agreeableness and, finally, 0.82 for conscientiousness. The reliabilities of two of these five factors
are somewhat low; however, they are in line with past research (Costa & McCrae. 1992b; see also
Hoekstra et al., 1996). wbere the average is 0.77 across traits. We decided to retain tbe official scales
to ensure comparability of the results to other studies using this measure. The items bave a 5-point
response scale, ranging from I (strongly disagree) to 5 (strongly agree).
Leadership styles
Cbarismatic and transactional leader behaviors were rated by subordinates (at time 2) using two scales
from tbe Cbarismatic Leadersbip in Organizations questionnaire (CLIO; De Hoogb et a!., 2004a). The
cbarismatic leadership scale contains 11 items, wbich reflect the articulation of an attractive vision,
providing meaning to follower’s work, role modeling of desired behavior, power sharing, intellectual
stimulation, and consideration. Examples of items measuring charismatic leadership are, ‘Has a vision
and imagination of the future,’ ‘Encourages subordinates to develop their potential,’ and ‘Displays
conviction in bis/her ideals, beliefs, and values.’ Tbe items bave a seven-point response scale, ranging
from 1 {strongly disagree) to 7 (strongly agree). Tbis scale bad an alpba coefficient of 0.88 (n — 256

The transactional leadership scale contains 6 items emphasizing faimess of the deal leaders make with
their subordinates. Examples of items are, ‘Ensures that agreements are being kept,” “Can be relied on
to meet obligations,’ and ‘Does not criticize subordinates without good reason.* The items have a 7-
point response scale, ranging from I (strongly disagree) to 7 {strongly agree). The transactional scale
had an alpha coefficient of 0.81 (n — 256).
Perceived effectiveness
Superiors and/or peers provided a measure of perceived leader effectiveness based on three items
(time 2): ‘To what extent is the overall functioning of the person you evaluate satisfactory?’ ‘How capable
is the person you are evaluating as a leader?’ and ‘How effective is the person you are evaluating
as a leader?’ Responses were given on a 7-point response scale, ranging from 1 (not at all) to 7 {very
much so). The perceived effectiveness measures had an alpha coefficient of 0.86 {n — 108).
Dynamic work environment
The focal managers provided a measure of perceived dynamic work environment based on three items
(time 2): ‘What is the extent of challenge in your work environment?’ ‘To which degree is your work
environment dynamic?’ And: To what extent does your work environment offer great opportunities
for change?’ The items were rated on a 7-point response scale, ranging from 1 (not at all) to 7 (very
much ,so). The dynamic work environment scale had an alpha coefficient of 0.68 (n = 80).

Results
Rater agreement
To examine the justification for aggregating individual responses to characterize the leadership style of
focal managers we performed one way-analyses of variance with focal managers as the independent
variable and the mean scores of subordinate raters for both leadership styles as the dependent variables.
Results showed that, for all variables, the between-group variance was significantly different from
zero. Next, two kinds of intra-class correlation coefficients were calculated ICC(I) and 1CC(2) (see
Shrout & Fleiss, 1979). The ICC(l) coefficient is an estimate of the degree to which subordinates
of the same focal manager respond similarly. The ICC(l)’s for subordinate ratings of charismatic
and transactional leadership were 0.15 and 0.16, respectively. These values are in line with the median
value of ICC(I) reported in the organizational literature, which equals 0.12 (James, 1982). The ICC(2)
coefficient is an indicator of inter-rater reliability. It marks the degree to which the group means can be
reliably differentiated from each other. The ICC(2)’s for subordinate ratings of charismatic and transactional
leadership were 0.55 and 0.57. respectively. Tbese values of ICC(2) are marginal, though can
be considered acceptable given that a mean of only three subordinates rated their managers and the
ICC(2) index is dependent on the number of raters per group (Bliese, 2000). Taken together, these
results provide support for combining subordinates’ responses to provide averaged, aggregated scores
for charismatic and transactional leadership. The leadership dimensions seem sufficiently valid at the
group level to be aggregated and reported at the group level.
Personality and leadership
Table I shows the means, standard deviations and correlations for each of the variables. As it can be
seen, the inter-correlations among the five factors of personality are rather high. Neuroticism correlates

significantly negative with the other factors (ranging from -0.28 to -0.66), except for agreeableness
(—0.08). Furthermore, extraversion correlates significantly positive with openness to experience (0.40)
and conscientiousness (0.52). Conscientiousness correlates significantly positive with agreeableness
(0.31). These correlations are similar to correlations found in previous research when this version
of the NEO-PI-R was admini.strated to job applicants (see Hoekstra et al., 1996).
The correlations between the five factors of personality and the other variables used in this study are
low, except for the correlation between agreeableness and perceived dynamic work environment
(0.25). Thus, no significant correlations were found between the Big Five-Factors of personality
and charismatic or transactional leadership.
Besides correlation coefficients, we also report standardized regression coefficients for these relationships
in which the effect of one trait is adjusted for the influence of the other traits (see also Judge
& Bono, 2000). For this we regressed charismatic and transactional leadership on the Big Five-Factors
in two separate analyses, as reported in Table 2. Neuroticism had a positive relationship with charismatic
leadership when the effects of the other Big Five traits were controlled for, suggesting that it
explains a unique portion of variance that is not captured by any of the others variables, /3 = O.3O.
p = 0.05. However, this model did not reach significance./?^— 0.06. F — 1.01./7 — 0.42. As can be seen
from Table 2, cbarismatic and transactional leadership were not significantly explained by the Big Five
personality traits. A separate regression analysis also sbowed that the five factors were not related to
perceived effectiveness (also reported in Table 2).
To examine the effect of perceived dynamic work environment on the relationship between the
Big Five constructs and charismatic leadership, we conducted separate moderated multiple regression
analyses. Although ideally one would include all interaction effects in a single analysis, our relatively

small sample size (and related low power) and the high correlations between some of the personality
factors required us to be sparse with the specification of the variables in the interaction analyses. Thus,
we follow the data analysis strategy used by Barrick and Mount (1993) and used separate analyses for
each of the Big Five constructs. First, we regressed charismatic leadership on the perceived dynamic
work variable and on one of the Big Five-Factors. In the second step, the interaction predictor was
added to the regression. Table 3 presents the results of these analyses.
Contrary to Hypothesis I, no significant interaction effect was found for extraversion and dynamic
work environment in explaining charismatic leadership, ß = 0.00. p > 0.05. Although the interaction
of openness to experience and dynamic work environment had a significant positive effect on charismatic
leadership and explained 5 per cent of the variance, /3 ^ 0.25,/?< 0.05, the form of the interaction
(see Figure 2) shows a positive relationsbip under bigh dynamic work conditions and a negative
relationship under low dynamic conditions. Thus, the form of the interaction does not (or only partially)
support Hypothesis 2, which suggested a greater effect under conditions of a more dynamic
work environment. Furthermore, in support of Hypothesis 3, the interaction between agreeableness
and dynamic work environment had a significant negative effect on charismatic leadership, explaining
10 per cent of variance, ß = —0.34, p < 0.01. Similar results were found for conscientiousness in combination
with perceived dynamic work environment for explaining charismatic leadership, ß = —0.35,

p<0,01, supporting Hypothesis 5. Contrary to Hypothesis 7, however, we found a significant po.ç/Vivc
interaction for neuroticism and dynamic work environment in explaining charismatic leadership, in the
opposite direction to the one predicted, ß — 0.34, /? < 0.01. The nature of these ititeractions for high
and low perceived dynamic work environment is depicted in Figure 2.
In sum, leaders scoring high on openness to experience as well as neuroticism were rated more
charismatic by subordinates in work situations that were perceived as dynamic and less charismatic
in work situations that were rated more stable. The reverse was true for leaders high on agreeableness
and conscientiousness. These leaders were rated less charismatic in dynamic work situations and more
charismatic in stable environments.
Following the same procedures, two separate moderated multiple regression analyses were conducted
to examine the effect of perceived dynamic work environment on the relationship of agreeableness
and conscientiousness with transactional leadership (reported in Table 3). Consistent with
Hypothesis 4 and 6, we found a significant negative beta-weight (i.e., environment is less dynamic)
of the interaction term for both agreeableness and conscientiousness in combination with perceived
dynamic environment, ,£i=-0.25, p<0.05, /^=—0.30, p < 0.05, explaining 5, respectively
7percent of variance. The nature of these interactions is depicted in Figure 3. In sum, leaders
high on agreeableness as well as conscientiousness were rated more transactional in work situations
that were perceived as stable and less tratisactional in work situations that were rated more
dynamic.

Leadership and effectiveness
Table 1 reveals that the inter-correlation between charismatic and transactional leadership (0.49) is
somewhat lower than correlations typically found in studies in this area using other measures such
as the MLQ (see e.g., Den Hartog. Van Muijen, & Koopman, 1997; Lowe et al., 1996). The correlations
between charismatic leadership as well as transactional leadership and perceived effectiveness
are low and not significant (—0.07,0.14, respectively). Thus contrary to expectations, both charismatic
and transactional leadership were found to be unrelated to perceived effectiveness. This means that
hypothesis 8 is not supported.
To test the impact of perceived dynamic work environment on the relationship between charismatic
leadership and perceived effectiveness, a moderated hierarchical regression analysis was conducted.
First, we regressed the effectiveness variable on charismatic leadership and perceived dynamic work
environment. In the second step, the interaction predictor was added to the regression. Table 4 presents
the results of this analysis. Both charismatic leadership and dynamic work environment had no .significant
main effect on effectiveness. However, the interaction between charismatic leadership and perceived
dynamic work environment contributed significantly in explaining perceived effectiveness,
/3 = O.I4, p <0.05. The nature of this interaction is depicted in Figure 4. Thus, the form of the interaction
does not (or only partially) support Hypothesis 9; the relationship between charismatic leader

behavior and perceived effectiveness was more positive in dynamic work environments and more
negative in stable work environments. A separate regression analysis (not reported) showed that transactional
leadership and perceived dynamic work environment did not interact in explaining perceived
effectiveness.

Discussion
The main purpose of this study was to assess links between leadership and personality and investigate
whether perceived dynamic work environment moderates the relationship between personality and
charismatic as well as transactional leadership. Our secondary purpose was to address the relationship
between leadership styles and effectiveness and test for the potential moderating effect of dynamism.
Personality and leadership
Trait activation theory posits that personality traits require trait-relevant situations for their expression.
In line with this, the results of our study indicate that the relationships between personality and charismatic
and transactional leadership differ depending on the context. Specifically, we found that four of
the Big Five-Factors are differently relevant to charismatic and transactional leadership depending on
the degree to which the work environment is perceived as dynamic.
As expected, we found that agreeableness and conscientiousness positively were related to perceptions
of both charismatic and transactional leadership styles in a stable work environment. In a more dynamic
environment, leaders with these characteristics were rated le.’ss charismatic and less transactional. Thus,
the personality traits that help increase the quality of interaction with followers and inspire followers to
perfomi beyond expectation through setting high .standards and acting dutifully themselves (i.e., agreeableness
and conscientiousness) are found to be especially important for charismatic leadership in a stable
context. In contrast, in a dynamic environment agreeableness and conscientiousness seem to impede tbe
attribution of charisma as highly agreeable and conscientious leaders may be overly compliant and stick to
agreed upon regulations rather than grasp opportunities at hand.
Furthermore, the personality traits involved in being able to meet and respond to the reactions and
changing expectations of followers and monitor successfully (i.e., agreeableness and conscientiousness)
are also found to be especially important for transactional leadership in a stable context. In contrast,
under more dynamic conditions, such agreeable and conscientious leaders who choose to monitor
exchange relationships with employees and stress maintaining the status quo seemed to be viewed as
too rigid and were perceived as less transactional than in stable conditions. Previous research reports
positive as well as negative and non-existent relationships between agreeableness, conscientiousness,
and charismatic leadership and transactional leadership (Crant & Bateman, 2000: Judge & Bono,
2000; Ployhart et al., 2001 see also Bono & Judge, 2004). Our results suggest that distinguishing
between stable and dynamic environments may be needed in developing further understanding regarding
the relationships between these variables.
Contrary to our expectations, no direct relationship was found between openness to experience and
charismatic leadership. We found the expected positive relationship between openness to experience
and charismatic leadership only in a work environment perceived as dynamic. Leaders scoring high
on openness to experience were rated more charismatic by subordinates in work situations that were
perceived as dynamic and less charismatic in work situations that were rated more stable. In line with

trait activation theory, the personality trait required for leaders to question the status quo and to find
new opportunities to reach organizational goals (i.e., openness to experietice) is likely to be especially
relevant in a dynamic context. Our finding that leaders scoring high on openness to experience were
rated more charismatic by subordinates in work situations that were perceived as dynamic supports this
proposition. In contrast, in more stable contexts, leaders who question the status quo and continually
seek improvements in ways to perform the job may be viewed as too unsettling (e.g., Howell & Avolio,
1993). This may explain why we found leaders with high scores on openness to experience were rated
less charismatic in these contexts. Our findings are in line with those by Ployhart and colleagues
(2(K)1), who found that openness to experience predicted charismatic leadership for participants in
a military training, but that this only held under relatively challenging and not under more stable conditions.
Our findings are also in line with meta-analytic results showing great variability in strength and
direction for the relationship between openness to experience and charismatic leadership. Results of
the present study and the one by Ployhart and colleagues (2001 ) suggest that openness to experience is
more relevant to charismatic leadership in a dynamic than in a stable environment.
Contrary to expectations, we found that leaders who were relatively high on neuroticism were rated
more charismatic by subordinates in work situations that were perceived as dynamic and less charismatic
in work situations that were rated more stable. Perhaps the negative emotionality of individuals
high on neuroticism may induce them to take an emotionally charged position in their attempts to
change the states quo in a dynamic context, which subordinates may find inspiring (cf. Cable & Judge,
2(X)3). In contrast, in a more stable context, taking an emotionally charged position may run counter to
the stability and continuity of the existing structure, which may lead them to be perceived less charismatic.
Previous research by Ployhart and colleagues (2(X)1 ) also found a negative relationship between
neuroticism and charismatic leadership in a more stable environment (i.e. three month basic training)
and no relationship in a more dynamic environment (i.e., two day assessment exercise). Other previous
research that did not take context into account did not find any relation.ships between neuroticism and
charismatic leadership (Crant & Bateman. 2000; Judge & Bono, 2000) or report negative ones (Lim &
Ployhart, 2004; Bono & Judge. 2004). Our findings suggest that taking differences in context (e.g.
dynamic vs. stable environments) into account in future studies may gain further understanding in
the relationship between neuroticism and charismatic leadership.
We also expected that the personality trait required for leaders to be able to influence, persuade and
mobilize a critical mass of followers (i.e., extraversion) would be especially relevant in a dynamic context.
No evidence, however, was found for a relationship between extraversion and charismatic leadership
regardless whether we took differences in context (e.g., dynamic versus stable environments) into
account. Our finding runs counter to previous studies that link extra version with charismatic leadership
(Crant & Bateman, 2000; Judge & Bono, 2000; Bono & Judge, 2004) and more strongly so in a challenging
than in a more stable environment (Ployhart et al., 2001). Perhaps managers in our study were
more likely than in previous studies done in other contexts to rate themselves as extraverts as the ratings
were obtained during an evaluation of managerial potential. To them extraversion might seem
consistent with the profile of an effective leader. Thus, this implicit profile might have biased managers’
self-reports of extraversion. The limitations of our study, including the possibility of social
desirability bias, are discussed further below. Future research is needed to further explore the moderating
role of the context in the relationship between extraversion and leader behavior.
Leadership and effectiveness
As a secondary aim, we also addressed the relationship between leader behavior and performance.
Contrary to our expectations, no direct relationship was found between charismatic leadership and

perceived effectiveness. We did however find an interaction effect. Results show that subordinates
evaluations of charismatic leader behavior were po.sitively related to perceived effectiveness as rated
by superiors and peers, but only under dynamic work conditions. Our findings are consistent with theories
of charismatic leadership that have suggested that charismatic leadership is likely to be more
effective under conditions of challenge and change (e.g., Howell & Avolio, 1993; Shamir & Howell,
1999). Moreover, our findings are in line witb previous researcb by Waldman et al. (2001). They found
that charismatic leadership of Chief Executive Officers positively affected organizational performance,
but only under conditions of high environmental uncertainty. Taken together, tbese findings suggest
that charismatic leaders need a certain amount of decision discretion and opportunity for change to
have an impact on performance outcomes.
Limitations and future research
Although our study yields some interesting findings, it also bas several limitations tbat need to be considered
wben interpreting tbe results. First of all, managers’ self-reports of tbeir personality may be
guided by self-presentation of an image that tbe respondent wishes to convey to the tester, especially
wben the questionnaire is used for selection purposes (Hogan, Hogan, & Roberts, 1996), wbicb was
tbe case here for part of the respondents. The high inter-correlations found between tbe Big Five-
Factors in tbis study may be tbe result of this and this implies that we may have a conservative test
of our hypotheses.
Second, it is possible that managers who did not participate in tbe present study were more likely to
have been evaluated negatively regarding their managerial potential. Indicating this, only 3 of the 29
participants at time 2 that had taken part in tbe management assessment at time 1 for personnel selection
purposes were given a negative advice regarding the job for wbich they had applied. Consequently,
tbe database available for analyses may suffer from restriction of range. Our check for selective nonresponse
suggested, however, no significant differences regarding gender, age and scores on tbe Big
Five-Factors. Also, the majority of managers in the sample underwent the assessment for developmental
rather than selection purposes. Thus, this possible bias is likely to be limited.
Tbird, as in most multi-source feedback systems, managers in this study selected their raters.
Moreover, we were able to obtain effectiveness ratings for only part of tbe focal managers (61 out
of 83). Therefore, one might suggest that selection of raters has resulted in a positive bias of raters
toward the focal manager. We, however, checked for selective non-response regarding gender, age,
and leadersbip styles and did not find any differences. Therefore, we expect this possible positive bias
to be limited.
Due to tbe managers’ freedom of choice of selecting tbeir raters, only 16 of the managers were rated
by peers as well as superiors. As such, correlation coefficients could only be calculated on a sample of
16 managers (p —0.12), and tbis small sample does not provide us with accurate estimates of agreement
or inter-rater reliability. We decided, however, to combine and aggregate peers and superior ratings,
since previous meta-analytic studies demonstrate a relatively bigh correlation between peer and
superior ratings (e.g., Conway & Huffcutt, 1997; HarTis & Schaubroeck, 1988). Moreover, in this way
common source and rater bias was minimized; each of tbe variables measured in this study was
assessed by different ratete or at different time points.
Furthermore, reliability estimates for openness to experience, agreeableness and for the dynamic
work environment scale could have been higher. This seems especially pressing for tbe two Big Five
factors wben one considers tbat these measures contain 48 items per trait. However, the reliabilities
were sufficiently in line with previous studies and the Dutch norm group (see Costa & McCrae, 1992b;
Hoekstra et al., 1996). Thus, we retained the original scales, whicb makes direct comparisons with

Other research possible. Consequently, relationsbips may have been underestimated due to low reliability
of the measurement instruments (i.e., the error in our measures obscured the true relationship).
Future researcb on the broad Big Five factors and their reliabilities seems, however, necessary.
Attention should also be devoted to expanding and refining the measure of a dynamic work environment
chosen in this study. While the three items that we used have precedents in the literature, they
may provide a somewhat broad measure of environmental dynamism. The somewhat low reliability of
the dynamic work environment scale (0.68) may be the result of this. Perhaps more fine-grained or
focused measures could show us that under the heading of dynamic environment there are certain
forms or sub-contexts that are more conducive to charismatic and transformational leadership while
others may not be at all. Other researchers have investigated slightly different concepts in relation to
charismatic leadership, for example environmental uncertainty (cf. De Hoogh et a!., 2004b; Flynn &
Staw, 2004; Waldman et al., 2001) crisis (cf. Pillai, 1996; Pillai & Meindl, 1991) and technological
change (cf. De Hoogh et al., 2004b). Here we have focused on a dynamic etivironment. The results of
this study show that a dynamic work environment is an important moderator of the relationship
between personality and leadership. It may therefore, be a fruitful road of research to try and map
the differetices between the various concepts in their link with charismatic and transactional
leadership.
The focal managers themselves provided a measure of perceived dynamic work environment. Their
own perceptions of the environment are most relevant for explaining trait relevant behavior as compared
to for example perceptions of subordinates or peers. But the unavailability of subordinates” or
superiors’/peers’ ratings represents a limitation witb regard to tbe investigation of dynamic environment
as a moderator of the relationship between charismatic leadership and effectiveness. Their perception
of the environment to be dynamic must be most relevant for leaders to more easily generate
appeal for the vision and be rated as more effective. Future research is needed to test this.
Furthermore, we recognize that the sample size for analyses was relatively small. Given the low
statistical power of moderated regression analysis (e.g., Aguinis, 1995; Villa, Howell, Dorfman. &
Daniel, 2003) more interaction effects may have been significant bad the sample size been larger.
At the same time, it also means that the moderator effects we did find need to be replicated across
a larger database of firms in future research to test their robustness. Our sample size and the high
inter-correlations found between some of the Big Five-Factors in tbis study (the highest reaching
up to -0.66) required us to be sparse witb the specification of the variables in the interaction analyses.
Tbe most desirable (and more conservative) approach to tbe interaction analyses would have been to
include all predictors and interaction terms in the same equation. In this way. the effect of one trait and
the interaction is adjusted for the infiuence of the other traits and possible interactions. This would
mean that in a statistical sense the variables are made independent of one another, even though they
correlate in the real world. This allows for examination of the unique contributions of each variable.
However, including highly correlated variables in tbe same analysis can infiate the size of tbe error
terms and thus weaken an analysis. In regression, this implies that error terms may get so large that
none of the coefficients are significant any longer even if effects do exist (Berry, 1993). For example,
when r = 0.9 the precision of estimation of weighting coefficients is already halved (Fox, 1991).
Therefore, we tested for the moderating effect of dynamic work environment on leadersbip .styles
one trait at a time. This way to analyze the data was also used in previous research as we followed
the strategy used by Barrick and Mount (1993) in their study on the Big Five factors and work performance,
investigating work autonomy as a moderator. In our case, due to inter-correlations and sample
size, this was also the best approach. As we could not investigate all effects simultaneously, some of
our findings may be confounded in the sense that effect sizes might be different after controlling for the
other Big Five traits and potential interactions. Our findings need replicating in future research that is
carried out in situations that allow for the investigation of these effects simultaneously. Sucb studies

require larger samples and would ideally also need to be done in situations where correlations among
the Big Five factors are lower (for example, our data on Big Five traits was gathered in a .selection
context in which such correlations might be somewhat higher than in a non-selection context). Under
those circumstances, such an approach will permit more powerful tests of hypotheses and control for
the main effects of the Big Five traits and potential interactions.
Finally, the longitudinal design of our study may also introduce a conservative bias in our study
where the results regarding leadership and personality are concerned. Most previous research uses a
cross-sectional design to investigate the link between personality and leadership (e.g., Crant &
Bateman, 2000; Judge & Bono, 2000). Previous research that did use a more longitudinal design
had different measurement points mostly only a few weeks apart from each other (e.g.. Ployhart et
al., 2001). In our study the measurement of personality and leader behavior did not only involve different
raters (self and subordinates), but measurements were also done nine months apart. Again this is
likely to result in conservative rather than inflated estimates of relationships. Further, we should note
that our outcome measures were only obtained at time 2 and not obtained at time 1, thus we could not
analyze actual change as it is possible in panel designs.
Despite the aforementioned limitations and the longitudinal design of our study, it is notable that we
were able to account for such a significant amount of variance with regard to our interaction hypotheses.
Future research using longitudinal designs should test the robustness of our findings and can also
rule out potential altemative explanations. Future work could also aim to identify and test other potential
moderators.
To conclude, in line with trait activation theory our study shows the importance of perceived
dynamic work environments as a moderator of the relationships between four of the Big Five-Factors
and both charismatic leadership and transactional leadership. Further, our study indicates that perceived
dynamic work environment acts as an important moderator of the relationship between charismatic
leadership and perceived effectiveness. More generally, our research suggests that more
attention for the moderating role of the context is needed in this area.
Acknowledgements
We thank management consultancy firm LTP for helping us collect the data. We would also like to
thank Renout E. De Vries and Jan A. Feij and three anonymous reviewers for comments on an earlier
version of this article.
Author biographies
Annebel H. B. De Hoogh is postdoc researcher at the department of Work and Organizational Psychology
of the Free University Amsterdam, The Netherlands. She received her PhD from the same
university in 2004. Her research interests are in the areas of personality and leadership.
Deanne N. Den Hartog is full professor of Organizational Behavior at the Management department of
the University of Amsterdam Business School. She holds a PhD from the Free University in

Amsterdam. The Netherlands. Her research interests include leadership and especially cross-cultural
and inspirational leadership processes and personality and leadership as well as (team) performance
management.
Paul L. Koopman (1946) is professor of the Psychology of Management and Organization at the Free
University Amsterdam. The Netherlands. He is interested and actively involved in cross-cultural
research, in particular in relation to issues of HRM, leadership and organizational culture.

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