The Effects of Leader-Member Exchange on Member Performance in Virtual World Teams

Understanding the role of leadership in virtual world teams may help shed light on how to manage synchronous and highly interdependent work activities. Based upon leader-member exchange (LMX) theory, we propose that the relationship between a leader and a team member (LMX) influences 1) the degree to which a team member is allocated resources by the leader (empowerment and group assignments), 2) the degree to which a team member develops relational resources with the team (trust, obligation, norms, and identification), and 3) the extent to which a team member receives or develops resources results in higher levels of individual performance. Our findings from a longitudinal field study of one large virtual world team in the massively multiplayer online game (MMOG) EverQuest suggest that the leader member relationship does impact members’ allocation and development of resources, and that it’s not just the quantity of members’ resources, but also the type of member resources, that has a direct influence on performance. Our findings also indicate that the influence of the leader-member relationship on member performance is fully mediated by the allocation and development of resources. Surprisingly, there was no relationship between LMX, trust, and performance, which suggests that trust may not be as vital in virtual teams where everyone’s actions are visible. Lastly, the findings suggest that building relational capital to facilitate the transformation from self to collective interest may be an effective leadership tactic when managing large virtual teams or social collectives.