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LEADER-MEMBER EXCHANGE AND ORGANIZATIONAL CITIZENSHIP BEHAVIOR: THE ROLES OF IDENTIFICATION

WITH LEADER AND LEADER’S REPUTATION

JIAXIN HUANG Guangdong University of Finance and Economics

LIN WANG Sun Yat-sen University

JUN XIE Guangdong University of Foreign Studies

We used identification theory to develop a model of the processes linking leader-member exchange (LMX) to organizational citizenship behavior. Using a sample of 262 supervisor- subordinate dyads collected in China, we found that followers’ identification with the leader mediated the influence of LMX on organizational citizenship behavior. We also found that perceived group leader’s reputation moderated the relationship between LMX and identification with the leader, in that the relationship was stronger for individuals scoring high on perceived group leader’s reputation than it was for those scoring low. Implications for research and practice are discussed.

Keywords: leader-member exchange, organizational citizenship behavior, follower’s identification with the leader, leader’s reputation.

SOCIAL BEHAVIOR AND PERSONALITY, 2014, 42(10), 1699-1712 © Society for Personality Research http://dx.doi.org/10.2224/sbp.2014.42.10.1699

1699

Jiaxin Huang, School of Business Administration, Guangdong University of Finance and Economics; Lin Wang, Lingnan College, Sun Yat-sen University; Jun Xie, Center for Cantonese Merchants Research, Guangdong University of Foreign Studies. This research was supported by grants from the National Science Foundation (71102102), the Humanity and Social Science Foundation of the Ministry of Education of China (10YJC630226 and 12YJA630095), Innovative School Project in Higher Education of Guangdong, China (GWTP-LH- 2014-08), and the Fundamental Research Funds for the Central Universities (12wkpy17). Correspondence concerning this article should be addressed to: Lin Wang, Lingnan College, Sun Yat-sen University, Guangzhou 510275, People’s Republic of China. Email: [email protected]. edu.cn, or Jun Xie, Center for Cantonese Merchants Research, Guangdong University of Foreign Studies, Guangzhou 510006, People’s Republic of China. Email: [email protected]

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Over the past three decades, leader-member exchange (LMX) theory has emerged as one of the most important approaches to understanding leadership effectiveness (Erdogan, Liden, & Kraimer, 2006). According to this theory, leaders develop different types of exchange relationships with their followers, and the higher the quality of these relationships the more followers feel obliged to reciprocate (Sparrowe & Liden, 1997). Although previous researchers have provided considerable empirical evidence that LMX is significantly related to organizational citizenship behavior (OCB), the explanation of mechanisms by which those effects are ultimately realized has largely relied on social exchange theory (Ilies, Nahrgang, & Morgeson, 2007).

Underpinned by the relational identification model (Sluss & Ashforth, 2007; Sluss, Ployhart, Cobb, & Ashforth, 2012), we proposed a different mechanism for relating LMX to OCB: one rooted not in the reciprocal exchange process, but rather rooted in the identification process. Traditionally, social exchange theory has been the framework underlying the research of LMX and OCB relationships (Ilies et al., 2007). For high quality exchange dyads, supervisors provide their subordinates with valuable inducements, which include rewards extending beyond what is specified in the formal job description (Liden & Graen, 1980). Thus, in order to maintain a balanced or equitable exchange relationship, it is likely that subordinates will go beyond the formal job duties and engage in OCB (Wayne, Shore, Bommer, & Tetrick, 2002). However, for high quality LMX relationships in a Chinese context, the followers are not only formally rewarded but also emotionally supported by the leader. Followers are prone to feel loyalty to the leader rather than the organization (Chen, Tsui, & Farh, 2002). Thus, the leader’s role as a significant other is activated in the followers’ self-concept. Based on theories of relational identification, we proposed that LMX affects followers’ identification with supervisors, which leads to OCB.

In addition, we contended that the extent to which LMX fosters followers’ identification with the leader depends on the leader’s external reputation as perceived at group level. Research on organizational image and construed external image shows that if a member believes that outsiders are likely to view the organization favorably, the image of the organization within the perception of the member will be attractive and, will in turn, facilitate further alignment between a member’s self-concept and organizational definition (Dutton & Dukerich, 1991; Dutton, Dukerich, & Harquail, 1994). We contended that a similar process exists in the identification with the leader. Perceived group leader’s reputation refers to a member’s belief about other members’ perceptions of the leader. According to social identity theory, when followers believe a leader has elements that others are likely to value, their affiliation to the group leader will create a positive social identity, which will increase the overlap between how a member defines him or herself and the leader (Dutton et al., 1994; Tajfel,

LEADER-MEMBER EXCHANGE AND ORGANIZATIONAL BEHAVIOR 1701

1974). To address this issue, we focused on the moderating effect of perceived group leader’s reputation.

In sum, we investigated how LMX affects followers’ identification with supervisors, which in turn impacts on their organizational citizenship behavior. We also examined the moderating influence of perceived group leader’s reputation on the relationship between LMX and the construct of identification with one’s leader in a non-Western setting (i.e., China). Figure 1 schematically depicts these objectives.

Perceived group leaders’ reputation

Organizational citizenship behavior

Followers’ identification with the leader

Leader-member exchange

Group level

Individual level

Figure 1. Hypothesized model of relationships.

Theoretical Background and Hypotheses

LMX and Followers’ Identification With Leader Followers’ identification with a leader is a process of self-defining based on the

supervisor-subordinate role and relationship. Sluss and Ashforth (2007) defined it as relational identification. It is a self-expansion process, in which one includes the supervisory relationships as salient role relationships in one’s definition of self (Cooper & Thatcher, 2010). It is well documented that cues conveyed by the significant other play an important role in shaping one’s relational self (Anderson & Chen, 2002). Thus, we contended that followers’ identification with the leader depends on whether or not the leader acts as significant other for the subordinates.

Significant other is defined as “any individual who is or has been deeply influential in one’s life and in whom one is or once was emotionally invested” (Anderson & Chen, 2002, p. 619). In high quality LMX, the leader succeeds in playing the role as a significant other for the subordinate because, first, the leader provides the subordinates with priority and privilege in resource allocation, which greatly contributes to their personal achievement. Specifically, the leader motivates subordinates with high levels of formal rewards, such as promotion opportunities, job autonomy, and bonuses (Dienesch & Liden, 1986). Second, the

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mutual loyalty, affect, and respect activate subordinates’ emotional investment in the leader (Liden & Maslyn, 1998). Desire for intimacy and interdependence, or need for relatedness motivates the subordinates to invest emotionally in the leader to build friendship and relationships. In a highly relationship-oriented context, an individual who holds an interdependent view of self and others will assign more importance to others than himself or herself (Markus & Kitayama, 1991). For the high quality leader-member exchange relationship dyads that develop in a Chinese organization, leaders not only support the subordinates formally but also show consideration for and support in their personal issues (Chen, Friedman, Yu, Fang, & Lu, 2009). Leaders’ highly personalized behavior goes beyond the work domain and creates a more influential status for the leader as significant other for subordinates. Thus, the quality of LMX induces the followers to include the leader in their relational self.

Based on the above discussion, we proposed the following hypothesis: Hypothesis 1: LMX will be positively related to followers’ identification with the leader.

The Mediating Role of Followers’ Identification With Leader As already described, in high quality LMX relationships the followers are

not only formally rewarded but also emotionally supported by the leader. This activates the leader’s role as significant other in the self-concept of the followers. Including the desirable personal attributes of the leader in followers’ definition of self is characterized as a self-expansion process (Cooper & Thatcher, 2010). It is believed that, in the self-expansion process, the closer the relationship is, the more one individual tends to help the other because each of these two people believes it is also benefiting himself or herself (Cialdini, Brown, Lewis, Luce, & Neuberg, 1997). Based on the literature about organizational identification, we contended that followers’ identification with a leader elicits in the followers a sense of oneness with the leader (van Knippenberg, 2000). Consequently, followers will view the goals and interests of the leader as their own, and accept the leader’s values as guidance for their own behavior (Andersen & Chen, 2002). Followers thus sacrifice their self-interest and devote extra effort to the success of both parties, even if the effort cannot be formally rewarded. Interpersonal identification fosters organization-oriented behavior also rooted in the generalization process. Sluss and Ashforth (2007) suggested that followers may come to identify with the collective that embodies and sustains the role relationship because of the generalization of relational identification. As the leader represents the organization, followers’ identification with the leader will spill over to include organizational identification (Shamir, Zakay, Brainin, & Popper, 2000; Sluss et al., 2012). Strong organizational identification stimulates followers to engage in OCB because they are likely to consider those behaviors

LEADER-MEMBER EXCHANGE AND ORGANIZATIONAL BEHAVIOR 1703

that benefit the organization as also benefiting themselves (Van Dick, Grojean, Christ, & Wieseke, 2006). Based on the above discussion, we contended that followers who identify with the leader go beyond their prescribed role and engage in OCB.

We contended that high quality LMX relationships activate followers’ identification with the leader, and that the generalization of relational identification motivates the followers to engage in OCB. Therefore, we proposed the following hypothesis: Hypothesis 2: Followers’ identification with the leader will mediate the relationship between LMX and OCB.

The Moderating Effects of Perceived Group Leader’s Reputation Research on organizational image and construed external image shows that if

a member believes that outsiders are likely to view the organization favorably, the members’ perception of the image of the organization will be attractive, and will in turn facilitate further alignment between a member’s self-concept and his or her organizational definition (Dutton & Dukerich, 1991; Dutton et al., 1994). We contended that a similar process exists at the group level. Individuals within a group consider the salient person’s construed external image in terms of his or her perceived personal reputation outside the group. Leader reputation is defined as a perceptual identity of a leader as held by others, which serves to reduce uncertainty regarding the expected future behavior of that leader (Hall, Blass, Ferris, & Massengale, 2004). In this study, we further defined perceived external leader’s reputation as the belief held by followers about how others view their leader.

We expected followers’ perceived external leader’s reputation to moderate the positive relationship between LMX and followers’ identification with the leader in such a way that, when followers perceive a group leader’s reputation as good, the positive relationship between LMX and followers’ identification with the leader will be stronger than when their perception is not as good. A group leader whose followers perceive him or her as having a good reputation further satisfies the followers’ need for self-verification. With respect to self-ver- ification, individuals are motivated to verify their preexisting self-conceptions, and strive to manipulate the immediate environment to support consistency of self (Steele, 1988). If the followers interpret the leader’s external image as attractive, the followers will tend to bask in the reflected glory of the group leader’s success (Cialdini et al., 1976). They are eager to link these socially desirable attributes to their self-concept. The leader who enjoys a favorable reputation is seen as legitimate, competent (Gioia & Sims, 1983), and possessing high status (Hochwarter, Ferris, Zinko, Arnell, & James, 2007). Incorporating these attractive personal characteristics into personal identity would satisfy the

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self-continuity, self-distinction motives of the followers (Dutton et al., 1994). Therefore, we proposed the following hypothesis: Hypothesis 3: The positive individual level relationship between LMX and followers’ identification with the leader will be stronger among subordinates who perceive their group leader’s reputation as good than among those who do not perceive their group leader’s reputation as good.

Method

Participants and Procedure Participants were employees of 15 companies located in three major cities in

southern China. All of these companies had been set up for more than 24 months, and their number of employees was over 50. Companies were dispersed among manufacturing, service, and distribution industries.

Dyadic surveys were administered to supervisors and their immediate subordinates in their workplace. In each company, with the assistance of the human resources management, the first two authors randomly selected between four and eight group leaders and asked each of them to rate the organizational citizenship behavior of their followers. Then the same authors randomly selected between three and eight immediate subordinates of the above supervisors to complete the subordinate surveys. Respondents were assured of confidentiality. We distributed 105 supervisors’ surveys and 345 subordinates’ surveys, of which 94 supervisors’ surveys and 323 subordinates’ surveys were returned, giving response rates of 89.5% and 93.6%, respectively. After we had deleted records with unmatched supervisor-subordinate pairs, a total of 262 supervisor- subordinate dyads (262 subordinates and 75 group leaders) remained, with final response rates of 81.1% and 79.8%, respectively.

In our sample of 262 subordinates, 50.8% were men and 49.2% were women. The subordinates’ ages were 66.8% between 20 and 30 years, 28.2% between 31 and 40 years, and 5% over 40 years. Among them, 55.3% had a college education or above, and the remaining 44.7% had a high school education or below.

Measures Respondents used 5-point Likert scales ranging from 1 (strongly disagree) to 5

(strongly agree) to respond to all items. Leader-member exchange. LMX was assessed with the measure developed

by Graen and Uhl-Bien (1995), which we adapted slightly. It includes seven items. Sample items were: “My immediate supervisor recognizes my potential,” and “I have enough confidence in my immediate supervisor that I would defend and justify his/her decision if he/she were not present to do so.” The Cronbach’s alpha was .89.

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Followers’ identification with the leader. For this we used the seven-item scale developed by Shamir et al. (2000). Sample items are “My immediate supervisor represents values that are important to me,” and “I have complete faith in my immediate supervisor.” The Cronbach’s alpha was .91.

Follower perceived group leader reputation. We adapted the personal reputation measurement developed by Hochwarter et al. (2007). The wording of the items was changed to refer to the shared perceptions of the group leader’s reputation, rather than to an individual’s perception of the leader’s reputation. Sample items were “Our immediate supervisor is regarded highly by others,” and “Others regard our immediate supervisor as someone who gets things done.” The Cronbach’s alpha was .92.

Organizational citizenship behavior. We used the nine-item scale of OCB validated by Farh, Zhong, and Organ (2004). Sample items are “This subordinate makes constructive suggestions that can improve the operation of the company,” and “This subordinate is willing to cover work assignments for colleagues when needed.” The Cronbach’s alpha was .91.

Control variables. We included employees’ gender (1 = male, 0 = female), age in years, and education (1 = junior middle school and below, 2 = senior middle school, 3 = junior college, 4 = undergraduate, 5 = graduate) as control variables in our analyses and tested the hypotheses after they were controlled. We used hierarchical regression analysis to test Hypotheses 1 and 2. Furthermore, we used hierarchical linear modeling to test Hypothesis 3, which contained cross-level analysis.

Results

Table 1 presents the means, standard deviations, and correlations among the study variables and the controls.

Table 2 presents results of the regression analysis. As shown in Table 2 (model 2), leader-member exchange was significantly related to followers’ identification with the leader. Thus, Hypothesis 1 was supported. Moreover, LMX was related to OCB, and followers’ identification with the leader was significantly related to OCB when LMX and the demographic characteristics were controlled. Pertaining to the mediated hypotheses, model 5 further revealed that the previously significant relationships between LMX and OCB ceased to be significant in the presence of followers’ identification with the leader. Taken together, the support for Hypothesis 1 and the significant relationship between LMX and OCB confirmed two of the conditions for testing mediation. Thus, Hypothesis 2 was fully supported.

Hypothesis 3 predicted that the group level perceived group leader’s reputation would moderate the individual level relationship between LMX and followers’

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identification with the leader. As shown in Table 3, the interaction of LMX and perceived group leader’s reputation was significant. Figure 2 depicts this interaction. The positive relationship between LMX and followers’ identification with the leader was stronger when the followers perceived that the group leader had a good reputation than it was when the followers did not perceive the group leader as having a good reputation, supporting Hypothesis 3.

Table 3. Results of Hierarchical Linear Modeling for the Moderating Effect of Perceived Group Leader’s Reputation

Variable Coefficient SE t 2  00

2

Null model Intercept 3.85* .06 65.79* 203.90 .16 .33

Level 1 variables Intercept 3.85* .06 65.46* 378.30 .20 .18 Gender -.02 .08 -.21 Age .01 .01 .06 Education .03 .03 .94 Leader-member exchange .63 .05 12.13

Level 2 variables Perceived group leader’s reputation .71* .09 7.80 159.29 .07 .19

Cross-level interactions Leader-member exchange × Perceived group leader’s reputation .13* .06 2.04 160.31 .07 .19

Note. Subordinates’ n = 262, teams’ n = 75, * p < .05.

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Figure 2. Moderating effect of perceived group leader’s reputation.

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Discussion

We have contributed to the literature on both the LMX and identification by integrating these two theoretical perspectives in predicting members’ OCB. In this study we responded to calls to investigate the conceptual and empirical links between leadership and followers’ identification (Ashforth, Harrison, & Corley, 2008). Previous researchers of LMX have linked the dyadic partner relationship to followers’ OCB and explained the influence mechanism as a social exchange process. In this study we suggested that followers’ identification with the leader acted as a mediator between LMX and OCB. Thus, we have provided a self-concept-defining and motivation mechanism to explain the LMX-OCB relationship. Our finding also sheds light on intergroup leadership and intergroup relations in organizations from the perspective of identification theory, which is a perspective recommended by scholars (e.g. Hogg, van Knippenberg, & Rast, 2012).

Following Dutton et al. (1994) and Dukerich, Golden, and Shortell (2002), we extended the literature of construed external image from a collective level to an interpersonal level by introducing the concept of group-level perceived external leader’s reputation. Our results indicate that how followers perceived outsiders’ image of the leader plays an important role in the relational identification process between the exchange dyads. When followers share a favorable perception of the leader’s external image, a high-quality relationship is more likely to facilitate the followers’ personal identification, and the followers are therefore motivated to engage in OCB. This finding suggests that such followers’ cognitive influences are worthy of attention, as it explains the boundary condition in which the quality of supervisor-subordinates’ relationships influences the followers’ identification with the leader.

Our results also indicate that managers should enhance their subordinates’ identification by developing high-quality leader-member exchange relationships. In order to motivate followers to engage in OCB, it is important to first develop followers’ personal identification through building high-quality relationships. By providing their subordinates with enough cues and information to make them aware of their favorable identity within a personalized relationship, leaders can become significant others in their followers’ self-concept. This, in turn, stimulates them to strive to maintain this identity through engaging in discretional behavior. Learning how to enhance the identification of the followers should be incorporated into training programs for managers.

Furthermore, managers should pay attention to preserving a favorable reputation among followers, because it will enhance the positive relationship between leader-member relationship and followers’ identification. In addition to developing high-quality relationships with the followers, leaders ought to take

LEADER-MEMBER EXCHANGE AND ORGANIZATIONAL BEHAVIOR 1709

others’ perception of their own image into account. It is worthwhile constructing a competent and qualified image, and maintaining a personal history recognized and appreciated by the followers and outsiders. Through this long-term oriented action, a leader is likely to be perceived as someone worth following. When the leader’s reputation becomes a shared perception among group members, it facilitates followers’ identification with the leader in high-quality leader-member exchange relationships. Although the reputation-building process takes time and effort, it turns out to be valuable because it facilitates the shaping of self-concept of the follower in a high-quality role relationship, and ultimately encourages the follower to contribute discretionally to the success of the work unit.

This study has several limitations. First, the data collected is cross-sectional, so alternative explanations for observed results may exist. There may be ambiguity in causal direction, for example, such that follower’s identification with the leader is related to LMX. Future researchers should consider a longitudinal design or laboratory design to clarify further the causal effect of LMX on followers’ identification. Second, we obtained data from several companies within China, using multiple organization and multiple-level individual samples. Though these companies and participants represented various backgrounds in China, future studies are still needed to examine whether or not our findings can be replicated or extended outside China or in other organizational contexts. Third, more attention should be paid to the relationship between LMX and negative organizational behaviors (Liu, Lin, & Hu, 2013). Future researchers could explore the mediating effect of identification on the relationship between LMX and negative attitude and behavior, such as workplace deviant behavior.

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