Abstract
The main purpose of this study was to diagnose the effects of leader-member exchange (LMX) quality on performance in the context of organizational and Turkish culture. The study was conducted in two family-owned businesses (FOBs), as they are very important structures in which in-group and out-group formations can be seen. Firm A (33 employees representing 41 dyads) and Firm B (61 employees representing 60 dyads) were especially chosen as they enabled us to apply the coding system leading to effective evaluation of surveys as the unit of analysis is “dyads”. In this framework, this study offers an important contribution to the international management literature as positive effects of LMX quality on firm performance, subordinate performance, intention to leave and job satisfaction were found within the context of organizational and Turkish culture. As the proportion of FOBs is almost 95% in Turkey, they represent Turkish economy and business culture well, leading to more generalizable results. Thus, firms can lead to increase in both subordinate and firm performance by creating an organizational culture in which high quality leader-member relationships are emphasized, finally leading to positive organizational outcomes.
Highlights
The aim of this paper is to find out the foreseen effects of leader-member exchange (LMX) quality on both firm performance and subordinate performance by taking the effect of organizational culture into consideration
We refer to general LMX quality and general subordinate performance in findings and discussion part
When the relationship between LMX quality based on subordinate perceptions and firm performance were analysed, we found no significant relationship, when the relationship between LMX quality based on supervisor perceptions and firm performance were analysed, we found a positive and a significant relationship (r = 0.267; p < .01)
Summary
The aim of this paper is to find out the foreseen effects of LMX quality on both firm performance and subordinate performance by taking the effect of organizational culture into consideration. Karcioglu, Kahya 2011; Sahin 2011; Cetin et al 2012) Some of these studies were held only at one organization and the effect of organizational culture has not been taken into consideration. Exchange quality has been generally evaluated by taking only one side’s (only the leader’s or the member’s) view into consideration. This is against the nature of exchange, which is a process involving both leaders and members. When only one side’s ideas are considered, the differences between the perceptions of leaders and members are neglected In this context, the effects of perceptional differences on organizational results cannot be evaluated. The subordinate’s performance was evaluated both by the subordinate and his/her leader to eliminate biases regarding perceptional differences
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