Why and how leaders differentiate?

• Main Author: BANERJEE, Srishti
• Format: text
• Language: English
• Published: Institutional Knowledge at Singapore Management University 2023
• Subjects: Leadership; leader differentiation; leader member exchange; fairness perception; team coordination perception; Leadership Studies; Management Sciences and Quantitative Methods
• Online Access: https://ink.library.smu.edu.sg/etd_coll/458; https://ink.library.smu.edu.sg/context/etd_coll/article/1456/viewcontent/GPGM_AY2018_PhD_Srishti_Banerjee.pdf
• Institution: Singapore Management University

A key tenet of Leader-Member Exchange (LMX) Theory is that leaders treat followers differently, referred to as leader-member exchange differentiation (LMXD) (Yu et al., 2018). When leaders treat followers differently, they develop a varying quality of relationships within the team referred to as LMX quality (LMXQ). LMXQ has received the vast majority of research with findings being largely consistent that higher quality relationships benefit followers (Yu et al., 2018). In contrast, surprisingly, much less research has focused on how this actual differentiation (LMXD) impacts employee reactions and there are no conclusive findings regarding its effects (Bauer & Erdogan, 2015; Chen et al., 2014; Martin et al., 2018). The vast majority of research on leader differentiation has investigated LMXD in general. That is, studies have merely investigated to what extent leaders differentiate between their followers. In my dissertation, to better understand the effects of LMXD, I theorize that the “why” and “how” leaders differentiate affect followers’ fairness perceptions and team coordination perceptions. Specifically, regarding why leaders may differentiate, I theorize about differentiation in general, based on performance, and based on follower ingratiation. Regarding how leaders differentiate, I theorize about differentiation in resource allocation and differentiation in liking towards followers. Data for the study were collected using a survey method and gathered usable responses from 338 participants. The results of this study supported the proposed negative effect of differentiation in general, differentiation based on follower ingratiation, differentiation in resource allocation, and differentiation in liking on followers’ fairness and team coordination perceptions. However, contrary to predictions, differentiation based on performance also showed a negative effect on followers’ fairness and team coordination perceptions. This study examined the effects of LMXD on employee criteria needed to better understand LMXD. Accordingly, it has been able to make several contributions to the extant LMX, team coordination and justice literatures. First, it explored the effects of leader differentiation beyond just examining it in general, hence advancing LMX theory as well as other leadership theories that are similar (for example, transformational leadership theory, individualized leadership theory). Secondly, the dyadic relationship between a leader and follower does not exist in isolation and in fact, affects other team members. This study examined how leader differentiation impacts a critical team process, namely team coordination. Finally, although a number of studies have explored justice perceptions within the LMX literature, there is a lack of a uniform understanding of the relationship between the LMX-related constructs and fairness perceptions.