The Role of Leader-Leader Exchange in Shaping the Consequences of LMX Differentiation in Work Groups

In this study, we propose that the upward leader-leader exchange (LLX) relationship is an important moderating condition in predicting the consequences of LMX differentiation within work groups. We assert that the structural and operating efficiencies created by LMX differentiation will depend on group member’s appraisal of the relative legitimacy of the with-in group LMX disparity. Drawing on relative deprivation theory, we argue that the level of perceived legitimacy of disparity varies with levels of LLX. Using data collected from 372 employees in work group groups at 67 hotels, we propose and test hypotheses that the quality of a leader’s LLX relationship will moderate the relationship between LMX differentiation and group level emotional engagement, turnover intention and teamwork behavior. Support is found for the moderating role of LLX in predicting group emotional engagement and turnover intention. Implications on theory and practice are offered.