A Multi-Level, Cross-Level Examination of Leader and Team Member Outcomes of Leader-Leader Exchange Differentiation

Abstract

Scholars have repeatedly demonstrated the positive benefits of high-quality leader-member exchange (LMX) for employees and organizations alike. Although some research has examined outcomes of differentiation of LMX relationships within teams, there is scant research into the way in which the combination of LMX and LMX differentiation (LMX-D) interact at the leader-level in the workplace hierarchy and the trickle-down effects these leader relationships have on subordinates. Moreover, no research has examined the potential buffering effect that subordinate team LMX may have on leaders who are experiencing the desire to withdraw from the organization as a result of the combination of their leader-leader exchange (LLX) relationships and the LLX differentiation (LLX-D) they perceive on their own leader teams. Thus, the present study sought to combine LMX and multilevel leadership theories to examine the effects of these leader-level exchange relationships on turnover intentions (TOI) for both individuals in leader-member dyads. Results suggested stronger negative relationships between LLX and TOI for both leaders and members when LLX-D is lower. However, examining this relationship at the leader-level when accounting for subordinate team LMX mean suggests that high-quality LMX relationships with the team members supervised by the leader attenuates the negative relationship between LLX and leader TOI. Theoretical and practical contributions are discussed, including the importance of the relationship of LLX, LLX-D, and team LMX mean on employee attitudes at multiple organizational levels.