Leader-Member Exchange Differentiation and Team Performance: A Social Identity Approach

Abstract

Building upon the social identity model of leadership (Hogg, 2001), we developed and tested a model explaining why and when leader-member exchange (LMX) differentiation may hurt team performance. We suggested that LMX differentiation negatively relates to team performance through increased relationship conflict. However, leader prototypicality is hypothesized to act as a moderator, weakening the negative indirect relationship between LMX differentiation and team performance. Survey data was collected from US and South Korean employees working in 60 teams, from three different sources (team leaders, members, and upper-level managers), and at two points in time with a 3-month time lag. We found that the indirect effect of LMX differentiation on team performance was negative and significant only when members' perceptions of leader prototypicality were low. Based upon these findings, we suggest future directions for LMX, team leadership, and diversity research based on social identity theory that incorporates multiple levels and contexts.