Leader–member exchange (LMX) in context: How LMX differentiation and LMX relational separation attenuate LMX's influence on OCB and turnover intention

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Abstract

Using the group engagement model, we hypothesize that two differentiated leadership constructs – LMX differentiation at the group level and a new construct, LMX relational separation, at the individual-within-group level – interact with LMX to affect follower citizenship behaviors (OCB) and turnover intentions. Data from 223 followers and their leaders situated across 60 workgroups demonstrate that the effects of individual perceived LMX quality are contingent upon a group's overall variability in LMX (i.e., LMX differentiation) and employees' similarity in terms of LMX with their coworkers (i.e., LMX relational separation). Specifically, the effects of high quality LMX relationships on OCB and turnover intentions are weaker when group LMX differentiation or employees' LMX relational separation is higher, rather than lower. Our findings contribute to a growing stream of multilevel LMX research incorporating climate effects and offer an alternative view of differentiated leadership in groups. Key implications for theory and practice are discussed.

Introduction

Extant research has shown that the dyadic relationship between employees and supervisors, or leader–member exchange (LMX), plays a significant role in shaping important follower attitudes and behaviors (for reviews, see Dulebohn et al., 2012, Gerstner and Day, 1997, Ilies et al., 2007). A fundamental tenet of LMX theory is that leaders develop different quality relationships with followers in their work groups (i.e., LMX differentiation; Liden, Erdogan, Wayne, & Sparrowe, 2006) and these differences, in turn, drive behavioral and attitudinal reactions concurrently with, and in addition to, dyadic LMX relationships (Henderson et al., 2009, Tse et al., 2012, Vidyarthi et al., 2010).

In acknowledging the important multilevel nature of LMX theory, researchers have devoted increasing attention toward addressing individual- and group-level influences of LMX (e.g., Henderson et al., 2008, Henderson et al., 2009, Hooper and Martin, 2008, Liao et al., 2010, Ma and Qu, 2010, Tse et al., 2012, Vidyarthi et al., 2010). However, the number of multilevel LMX investigations remains small relative to traditional dyadic, individual-level studies (Le Blanc & González-Romá, 2012), which has impeded researchers from reaching consensus as to how contextual LMX constructs operate to influence member outcomes. For example, building on the schools of thought suggesting that group-level LMX differentiation is necessary and even functional (e.g., Dansereau et al., 1973, Graen and Uhl-Bien, 1995), several scholars have argued for, and empirically supported the notion that, LMX differentiation can enhance the positive effects of LMX on follower outcomes (e.g., Henderson et al., 2008, Le Blanc and González-Romá, 2012, Liden et al., 2006). In contrast, other researchers have found that LMX differentiation violates principles of consistency and equality, leading to more deleterious or attenuating effects (Hooper and Martin, 2008, McClane, 1991). Thus, the effects of group-level LMX differentiation on LMX-outcome relationships are mixed and warrant more investigation.

A related line of research seeks to understand how a member's comparative LMX standing in his or her group, an individual-within-group conceptualization of differentiated LMX relationships, influences follower behaviors and attitudes. These inquiries, which have typically relied on “relative” LMX (RLMX; Henderson et al., 2008) or “social comparisons” of LMX (LMXSC; Vidyarthi et al., 2010) to capture individual-within-group differentiation, have demonstrated positive effects on job performance and some citizenship types beyond traditional LMX (Henderson et al., 2008, Tse et al., 2012, Vidyarthi et al., 2010). However, the conceptualizations and measurement of RLMX and LMXSC do not fully encompass the taxonomy of individual-within-group LMX measures and, as a result, are not appropriate for addressing all research questions (cf. Harrison & Klein, 2007). Specifically, both RLMX and LMXSC represent disparity measures of one's LMX in a group context (i.e., a follower's LMX is better or worse than his or her groupmates); and, as such, they are ill-equipped to answer questions regarding one's overall similarity/dissimilarity in a group. Thus, different measures of individual-within-group differentiation, namely those that explicitly address a follower's overall similarity (i.e., separation measures) with their group are needed for theoretical clarity.

Addressing these issues and answering calls to account for the impact of higher level climate variables (e.g., Hofmann, Morgeson, & Gerras, 2003) and workgroup context in LMX research (Avolio et al., 2009, Cogliser and Schriesheim, 2000, Henderson et al., 2009), our purpose is to empirically examine a multilevel model of LMX that integrates the dyadic perspective with group- and individual-within-group level perspectives to provide a more complete picture of LMX effects on follower outcomes. Building from the group engagement model (Tyler & Blader, 2003), we argue that LMX differentiation and a new construct, LMX relational separation (LMXRS), interact with LMX to affect follower citizenship behaviors (OCB) and turnover intentions. LMX differentiation is a group-level construct that refers to the degree of within-group variation in leader–member relationship quality (Erdogan and Bauer, 2010, Henderson et al., 2009). LMXRS is an individual-within-group construct that captures the absolute separation between an individual and his or her group members in terms of perceived LMX quality. In contrast to RLMX and LMXSC, LMXRS is a Euclidean distance measure that does not include directional (i.e., better than/worse than) information and is better suited for the group engagement model's identity arguments (cf. Harrison & Klein, 2007).

Our study contributes to existing LMX research in three primary ways. First, we add to and clarify the growing research that addresses the multilevel nature of LMX relationships. We examine the interaction between individual-dyadic level LMX (i.e., individual LMX) and two distinct differentiated LMX constructs (i.e., LMX differentiation at the group-level and LMXRS at the individual-within-group level) to better understand how climates created by differentiated relationships in workgroups influence relationships between LMX and follower outcomes.

Second, in line with recent efforts to expand the taxonomy of LMX research (e.g., RLMX, Henderson et al., 2008; LMXSC, Vidyarthi et al., 2010), we introduce and develop a new construct – LMX relational separation – and test its moderating effect on LMX-OCB and turnover intention relationships. Thus, we demonstrate the importance of considering whether an employee is similar (low LMXRS) or dissimilar (high LMXRS) with his or her peers in terms of LMX quality, in addition to the main effect of absolute LMX quality.

Finally, by incorporating principles found in the group engagement model (Tyler & Blader, 2003), we provide an alternative view that may help reconcile the inconclusive findings surrounding multilevel LMX conceptualizations. The group engagement model suggests that differentiation in LMX may impede individuals' ability to construct group member self-identities, which then stifles the traditionally advantageous effects of individual LMX on OCB and turnover intention. This is divergent from recent work that has argued for a positive, functional role of LMX differentiation (e.g., Henderson et al., 2008, Tse et al., 2012, Vidyarthi et al., 2010) and suggests instead that there may be important detriments associated with differentiation.

Section snippets

The group engagement model and differentiated leader–member exchange

Tyler and Blader, 2000, Tyler and Blader, 2003 group engagement model extends and integrates multiple theories relevant to multilevel examinations of LMX, including social identity theory (Tajfel & Turner, 1979), the group-value model of justice (Lind & Tyler, 1988), and relational models of authority (Tyler & Lind, 1992). By merging varying, and sometimes competing, theoretical rationales, the group engagement model is able to explain how workgroup membership shapes members' social identities

Sample and procedure

We drew participants from six state-owned companies in three Chinese cities selected through personal contacts by the authors representing four different industries including: manufacturing, electronics, telecommunication and hotels. This helped to avoid contextual constraints associated with any particular organization or industry (Rousseau & Fried, 2001).

Matching questionnaires were randomly distributed to 289 employees within 92 functional groups such as human resources, marketing,

Results

We provide individual- and group-level descriptive statistics and correlations in Table 1. In addition, we conducted a series of confirmatory factor analyses in AMOS to establish the discriminant validity of the measures. To maintain a favorable indicator-to-sample-size ratio for OCB, we used scale scores of specific sub-dimensions to form the respective factors. Results indicate adequate fit for the hypothesized three-factor model (χ2 (116, N = 223) = 311.70; CFI = .89; RMSEA = .09). Comparatively, an

Discussion

Responding to calls for more attention to the role of the workgroup context in LMX research (Avolio et al., 2009) as well climate-related effects (Hofmann et al., 2003) and by examining both absolute and comparative LMX constructs, we were able to more completely understand the effect of LMX on individual attitudes and behaviors in a group context. Consistent with our hypotheses, the results suggest that the exchange between follower and leader is not independent, but interdependent, because

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