Abstract
Existing literature on leader–member exchange differentiation (LMXD) offers a meaningful view into the multilevel outcomes associated with leader follower relationships. However, despite the rapid growth of literature on LMXD, scholars lack a complete understanding of its antecedents or the processes that cause leaders to differentiate among team members. We address this issue by using social capital theory to propose that leaders perceive their followers’ social networks as potential resources to grow their own social capital. Because each follower has unique social networks, we propose that leaders differentiate LMX among followers depending on which followers provide them with access to the most social resources. In this conceptual paper, we posit that as leaders gain information about their followers’ social networks, they attribute status to each follower depending on their perception of that follower’s social capital. We then propose that key contingencies, such as a team’s psychological safety climate or a leader’s ambition, influence the relationship between social network characteristics and LMXD. Overall, our model provides a unique multilevel perspective of LMXD and provides important insights for both researchers and practitioners alike.
Keywords
When employees report to the same supervisor in an organization, there is usually a discrepancy in the quality of relationships between the supervisor and each subordinate, which often is referred to as leader–member exchange differentiation (LMXD; Liden et al., 2006). Although this discrepancy is a popular discussion among both researchers and practitioners (e.g., Fleischman, 2015; Martin, Thomas, Legood, & Dello Russo, 2018), the factors that influence a leader’s tendency to develop higher (and lower) quality relationships with some followers are not well understood. Yet, we know that today’s business leaders are keenly aware of the importance that networking may have for their careers (Cole, 2019), which is exemplified by the 810 million members of LinkedIn. Thus, in this conceptual paper, we posit that one reason managers may develop higher quality relationships with some followers and not others is because they perceive that certain followers have particularly rich social networks. We argue that leaders may develop (either consciously or subconsciously) close relationships with certain followers in an effort to borrow the social capital of those followers for their own gain.
Leader–member exchange (LMX; Yammarino, Dionne, Chun, & Dansereau, 2005) describes the quality of the leader–follower relationship and has been thoroughly examined in the management literature. Since LMX was first introduced nearly a half-century ago (Densereau, Graen, & Haga, 1975; Graen & Uhl-Bien, 1995), several reviews (e.g., Bauer & Erdogan, 2015; Schriesheim, Castro, & Cogliser, 1999) and meta-analyses (e.g., Martin, Guillaume, Thomas, Lee, & Epitropaki, 2016) regarding LMX have emerged. In contrast, the limited literature surrounding LMXD, or the differing quality of LMX relationships within a team (Liden et al., 2006), lacks significant clarity of both the antecedents and theoretical frameworks that drive LMXD (Henderson, Liden, Glibkowski, & Chaudhry, 2009; Martin et al., 2018). Thus, an examination of the active role a leader plays in prioritizing follower relationships provides a potentially deeper understanding of LMXD to guide management research and practice. By developing a better theoretical understanding of the sources that drive LMXD, we advance the literature and provide several avenues for future empirical research on this topic.
The purpose of this conceptual paper is thus to build theoretical arguments to explain why leaders decide to select certain followers for higher or lower quality relationships. To do so, we integrate extant research on social networks (Sparrowe & Liden, 1997; Wellman & Berkowitz, 1988) with social capital theory (Coleman, 1994; Lin, Ensel, & Vaughn, 1981) to argue that leaders differentiate amongst members of a team due to perceptions of followers’ social networks. We argue that a follower’s social network structure and prominence within their networks (Carter, DeChurch, Braun, & Contractor, 2015) influence the leader’s attribution of status for that follower. These varying status attributions within a team influence a leader’s decision to develop higher quality relationships with high-status individuals, which consequently impacts the overall LMXD within the team.
Our paper provides several theoretical contributions to the LMXD literature. First, while prior research has primarily focused on identifying the consequences of LMXD on a team, we advance this literature by proposing one potential source of LMXD: followers’ social networks. Second, we use social capital theory to highlight the influence of followers’ social networks on overall LMXD by focusing on their perceived social capital. This perspective not only addresses previous calls for research on the influence of social networks on LMXD (Buengeler, Piccolo, & Locklear, 2021; Goodwin, Bowler, & Whittington, 2009; Martin et al., 2018), but also provides a novel theoretical lens through which to understand the sources of LMXD and a foundation to build future research. Finally, by analyzing the LMXD process from follower, leader, team, and organizational levels, we answer calls to examine LMXD from multilevel perspectives (e.g., Matta & Van Dyne, 2020).
We structured this conceptual piece in the following way. First, we briefly review the literature on LMXD and social networks. Next, we use social capital theory to propose a theoretical model that explains the role of social networks in LMXD. From this model, we develop several propositions regarding mediating and moderating factors that influence the relationship between follower social networks and LMXD. Finally, we discuss theoretical and practical implications, as well as directions for future research.
Leader–Member Exchange Differentiation and Social Networks
Leader–Member Exchange Differentiation
Research on LMXD by position in model.
Note. APJM = Asia Pacific Journal of Management; AMJ = Academy of Management Journal; AMR = Academy of Management Review; EJWOP = European Journal of Work and Organizational Psychology; GOM = Group & Organization Management; JAP = Journal of Applied Psychology; JBE = Journal of Business Ethics; JBP = Journal of Business and Psychology; JOB = Journal of Organizational Behavior; JOM = Journal of Management; JOOP = Journal of Occupational and Organizational Psychology; LQ = Leadership Quarterly; PP = Personnel Psychology. In LMXD position column IV = independent variable; DV = dependent variable; Mod = moderator; Med = mediator.
Although these findings provide value to our understanding of LMXD, several challenges remain for scholars in this area. Because of the dearth of studies on the antecedents of LMXD (Henderson et al., 2009), researchers lack the conceptual knowledge to advance theory without a clear understanding of the source of LMXD. Moreover, the narrow focus of the leader’s influence has led to a lack of understanding how follower characteristics may influence LMXD. We therefore contribute to the LMXD literature by proposing that a follower’s social network may be one factor that contributes to LMXD on a team. To do this, we employ social capital theory (Coleman, 1994; Lin et al., 1981) to explore reasons why a leader may invest in a higher (or lower) quality relationship with a follower based on that individual’s social network. Our perspective not only answers several scholars who have called for an examination of LMXD through a social network lens (Buengeler et al., 2021; Goodwin et al., 2009; Martin et al., 2018), but also extends our theory and understanding of LMXD from this fresh theoretical perspective.
Social Networks
The term “social networks” refers to the web of connections that link individuals to their various relationships, both personal and professional (Sparrowe & Liden, 1997; Wellman & Berkowitz, 1988). Extant literature indicates that several types of social networks may exist in organizations, including advice networks (Sparrowe, Liden, Wayne, & Kraimer, 2001), influence networks (Bono & Anderson, 2005), friendship networks (Kilduff & Krackhardt, 1994), and intrateam networks (Balkundi & Harrison, 2006). As indicated in two recent reviews, these social networks (regardless of type) influence individual- and team-level outcomes in various ways (Sparrowe et al., 2001). Specifically, Tasselli et al. (2015) argue that embeddedness within social networks influences an individual’s attitudes, behaviors, and work outcomes, and Park et al. (2020) highlight the influence of social networks on team outcomes, such as team performance. Finally, social networks impact outcomes for both leaders and followers (DeRue, Nahrgang, & Ashford, 2015). Both, a leader’s ability to hold critical positions in leadership networks (Bono & Anderson, 2005) and a follower’s ability to emerge into leadership roles (Serban et al., 2015) are dependent upon their respective social networks and prominence within those networks.
More specific to our focus in the leader–follower relationship, the effects of social networks should be especially salient within a leader–follower dyad, because dyadic relationships do not occur isolated from the social network of each person (Goodwin et al., 2009; Kilduff & Brass, 2010). In other words, the relationship between leader and follower is likely influenced by their respective social networks, such that the leader’s social network should influence the follower, and the follower’s social network should influence the leader. Although we know that a leader’s connectedness within their social network impacts follower outcomes (e.g., Kilduff & Krackhardt, 1994; Sparrow & Liden, 2005), our proposed model analyzes the influence of the followers’ social networks on the leader. Specifically, we expect that leaders perceive followers’ social networks as a resource for their own social capital. Because each follower possesses a unique social network, leaders differentiate LMX among team members by developing higher quality relationships with followers whose networks provide the most value.
Social Networks, Social Capital, and Leader–Member Exchange Differentiation
To explain the influence that follower social networks have on a LMXD, we draw on theories of social capital to illustrate how leaders perceive followers’ social networks as a resource for their own social capital (Burt, 1992; Granovetter, 1973; Lin et al., 1981). According to Coleman (1994), social capital is created when an individual’s network of relationships creates value in some way and/or facilitates instrumental action for individuals within that network. Put simply, social capital refers to the value created by one’s social network. Social network theories have proposed various mechanisms through which social networks influence career success. For example, Granovetter’s (1973) weak tie theory posits that weak ties, or social connections that reach outside of one’s own social clique, create value for an individual by providing a unique source of resources and information. Social resources theory (Lin et al., 1981), on the other hand, suggests that network ties (no matter the strength) are valuable when they provide the necessary resources for individuals to fulfill their objectives. Finally, structural hole theory argues that individuals gain value when social networks act as a broker of information or resources between two network connections who are otherwise not connected (Burt, 1992).
Although theorists diverge on the mechanisms that explain how social networks influence career outcomes, prior research clearly demonstrates that social capital, derived from an individual’s social network is a valuable resource for employees (Belliveau, O’Reilly, & Wade, 1996; Burt, 1992; Cross, Borgatti, & Parker, 2001; Gabbay & Zuckerman, 1998; Mehra, Kilduff, & Brass, 2001; Oh, Chung, & Labianca, 2004). For example, by integrating the three major social capital theories (i.e., weak tie theory, structural hole theory, and social resources theory), Seibert and colleagues (2001) found that social network characteristics are positively associated with employees’ salaries, career satisfaction, and promotions over their entire careers. Prior research also demonstrates the value that upward social connections provide followers, indicating that the quality of social capital matters. For example, the relationship between an individual’s social network and their influence in a team depends on the extent to which they share ties with leaders in the organization (Sparrowe & Liden, 2005). Similarly, Burt (1998, 2000) argued that individuals who lack legitimacy in an organization can overcome this challenge by essentially “borrowing the social capital” of a sponsor (i.e., their leader). However, in our theoretical model, we propose the reverse also occurs—leaders may seek to “borrow the social capital” of their followers.
This motivation to borrow a follower’s social capital influences the leader’s decision to prioritize certain follower relationships, which ultimately influences the team’s LMXD. Importantly, the leader’s decision-making process may be automatic or controlled, where an automatic decision is largely unconscious, but a controlled decision involves active and conscious information processing (Schneider & Shiffrin, 1977). For example, a leader may automatically ascribe higher status to a follower with a personal connection to the CEO. However, a leader may engage in controlled processing when interacting with a team member who previously worked for a competing organization; the leader may intentionally ascribe higher status to that team member in order to build trust and gain information regarding the competitor.
Theoretical Model
As is illustrated in Figure 1, we propose that the varying levels of status that leaders attribute to each follower are influenced by each follower’s social network. Specifically, when a leader perceives a follower’s social network includes valuable (or not valuable) social capital, the leader ascribes that individual with higher (or lower) status. These various attributions of status impact the leader’s prioritization of each follower’s relationship and thus, the overall LMXD of the team. Because our model explores the social networks and attributed status at the individual level between each team member and the leader, and LMXD is an aggregated measure of the dispersion in relationship quality of the team from the leader’s perspective, this model provides a multilevel model to explain how individual-level factors influence team-level outcomes. To illustrate these conceptual arguments further, we outline several propositions regarding the relationship between social networks and LMXD. The indirect effect of followers’ social networks on LMXD.
Leader Assessments of Social Capital
Because individuals draw conclusions about others’ social networks (Brands, 2013; Seibert, Kraimer, & Liden, 2001), leaders likely perceive each follower’s social capital based on information they know regarding that follower’s social network. Prior research indicates that both an individual’s position within a social network and characteristics of the network itself influence outcomes for that individual (e.g., Perry-Smith, 2006). Therefore, a leader likely utilizes both of these sources of information to assess each follower’s social capital and consequently ascribes higher (or lower) status to that individual.
Position Within Social Network
In order to account for a follower’s position within social networks, we utilize network centrality
Examples of how leaders may perceive a follower’s social network characteristics and the implications for attributions of follower status. For each of the examples below, assume the follower is a member of a Board of Directors for a local organization.
One way that leaders may respond to a follower’s position within their social network is by attributing higher status to that individual. There is good reason to expect that a follower’s position within a social network impacts the leader’s perception of that follower; as previously discussed, prior studies demonstrate that dyadic relationships do not occur isolated from each person’s social networks (Chiu, Balkundi, & Weinberg, 2017; Kilduff & Brass, 2010; Sparrowe & Liden, 2005), and leader–follower relationships “do not exist in a vacuum” (Yu et al., 2018, p. 1159). In fact, Chiu et al. (2017) found that managers’ centrality within social networks predicted followers’ perceptions of their leadership.
As a leader evaluates a follower’s network centrality, the leader likely makes attributions about each follower’s status. Because a follower’s network position can give that individual access to the resources in the network (Balkundi & Harrison, 2006; Goodwin et al., 2009), a more central position indicates more social capital and importance. For instance, if a leader recently discovers that a follower is the president of a board of directors instead of simply a member, the leader’s perception of the follower’s status should change with the newly acquired information about the follower’s position in that social sphere. Hence, the leader will attribute a higher status to this follower. Ultimately, there should be a positive relationship between each follower’s position within their social networks and the leader’s attributed status.
Social Network Characteristics
In addition to looking at the individual’s position within the social network, we include the social structure of the follower’s network, or “the configuration of interactions among actors in a social network” (Kilduff & Brass, 2010, p. 357), by considering two structural factors: size and density. As discussed below, previous literature has linked network characteristics with perception of status. For instance, a person’s reputation is boosted when others perceive that the individual holds friendship ties with powerful individuals (Kilduff & Krackhardt, 1994). Thus, when assessing a follower’s social capital and assigning status, a leader likely takes into account followers’ social network characteristics, such as size and density.
Size: Social network size refers to the number of individuals in the network (Hayton, Carnabuci, & Eisenberger, 2012). Because larger social networks typically provide more resources for an individual to draw upon (Lin, 1999), a follower’s social network size is likely one indication of their social capital. Prior literature has shown that “high-status people tend to have larger, more expansive social networks than low-status people” (Cao & Smith, 2021, p. 111). This characteristic is important for the leader–follower dyad because a follower who has access to a larger social network has the potential to provide the leader with more social capital. For example, a follower actively involved in an international professional association may provide their leader with more connections and resources than a follower involved in a local professional association. Thus, we propose that the leader’s attributed status to each follower will be influenced by the perceived size of the follower’s networks.
Density: Social network density refers to the number of ties per member within the social network (Serban et al., 2015; Sparrowe et al., 2001) and “is perhaps the most common way to index network structure as a whole” (Balkundi & Harrison, 2006, p. 50). Density determines the interconnectedness of a network through a comparison of the number of existing ties within a network to the possible number of total ties in the network (Balkundi & Harrison, 2006). That is, while size reflects the number of people in a given network, density is concerned with the number of ties within the network. To illustrate, a social network of 10 people has a higher density if all 10 people are connected to nine others than if all 10 people are connected to one other. Density is also a prime determinant of the quantity and ease with which information and resources can be transferred throughout the network. High-density networks, or those with more network ties, involve more information sharing and collaboration, whereas low-density networks are not conducive to information flowing within the social network (Balkundi & Harrison, 2006; Serban et al., 2015). Thus, a leader may use the density of a follower’s social network as a proxy for the accessibility of social capital.
In a similar manner to the leader’s interpretation of a follower’s position within a network, the size and density of followers’ social networks likely communicate the follower’s importance and prestige to leaders. Because high-status people are usually connected to large networks (Cao & Smith, 2021), and larger networks provide members with more potential resources, a leader may perceive that those individuals tied to larger social networks have higher social capital. Additionally, because high-density networks include more ties through which resources can flow, leaders may connect a follower’s importance to the density of the network, especially if the leader considers the follower as an access point to the resources found in the network (Goodwin et al., 2009).
In sum, the characteristics of a follower’s social network likely influence the leader’s perception of that individual’s social capital. Whereas a small network may indicate a low amount of potential network resources, a network that is not well-connected may indicate inaccessible network resources. In either case, the leader’s attribution of status for each team member is likely influenced by these characteristics. Thus, we expect both the size and density of each follower’s social networks to be positively related to the leader’s attributed status of each follower.
Attributed Status and Leader–Member Exchange Differentiation
Because individuals likely belong to different social networks and occupy different positions within those networks, followers within the same team should inevitably have various levels of social capital, resulting in various levels of status assigned by the leader. Prior research indicates that people are motivated to align themselves with high-status individuals (Preller, Patzelt, & Breugst, 2020). Status is often used in the organizational context as a signal of quality (Cao & Smith, 2021) and individuals hold high expectations of those who have high status (Driskell & Mullen, 1990). Therefore, we propose that leaders will desire to align themselves more with individuals who they perceive are high status (rather than low status) because they perceive high-status followers have more social capital from which they can borrow, which should influence a leader’s decision to develop higher quality relationships with those followers.
As this process occurs, the dispersion in the quality of leader–follower relationships (i.e., LMXD) will be influenced. In their recent review, Buengeler et al. (2021) argue that varying levels of status have implications for team outcomes, including composition and interactions within a group setting. Thus, we propose that varying levels of status should influence another team-level outcome: a leader’s decision to differentiate the quality of their relationships with each follower on a team, or LMXD. Because people want to align themselves with others of high status, leaders will likely select high-status followers as targets for higher LMX in order to have a better opportunity to borrow their social capital. Ultimately, this creates a variation in the quality of leader–member relationships of the team and changes LMXD at the team level. We thus propose:
Furthermore, we expect attributed status to mediate the indirect relationship between the social networks of followers and LMXD. That is, as a leader assesses each follower’s position in a social network and the network’s characteristics, the leader interprets this information through a social capital lens to determine each follower’s level of status. Because individuals interpret status as quality of the individual (Cao & Smith, 2021) and want to align with higher status people (Preller et al., 2020), leaders then use the attributed status as criteria for gauging the quality of relationships with each follower on the team. Because followers will have varying levels of social networks, the leader will have differing views on the leader–follower relationships within the team, or team LMXD. Thus, we expect attributed status of each follower to mediate the relationships between follower social networks and LMXD. Ultimately, we expect followers’ social networks and LMXD will have a positive indirect relationship, via attributed status.
Multilevel Influences on Leader–Member Exchange Differentiation
While the focus of our model is the indirect relationship of follower social networks on LMXD via follower status, there are several factors from a social capital perspective that should influence each stage of our conceptual model. In the following section, we propose several moderators that should influence the relationship. Overall, these factors deepen our multilevel examination of social networks on LMXD.
Follower Moderators
Perceived politics: Although the focus of our model is from the leader’s perspective, the follower’s perception of politics in the organization will likely influence the relationship between social networks and attributed status. Perception of organizational politics (POP) is the extent to which an individual perceives there is a high level of self-serving political behavior in the workplace (Miller, Rutherford, & Kolodinsky, 2008; Rosen, Ferris, Brown, Chen, & Yan, 2014). A substantial body of literature has shown that POP is associated with an array of negative workplace outcomes, including higher turnover intentions, higher employee strain, and lower performance (Chang, Rosen, & Levy, 2009; Miller et al., 2008). Employees with high POP typically avoid engaging in political behavior (Chang et al., 2009). Thus, a follower’s POP should influence their willingness to engage or withdraw from any actions associated with political behavior in the workplace.
If a follower perceives that their leader is engaging in self-serving political behavior (e.g., using follower social networks as a proxy for access to social capital), they will be more likely to have a higher degree of POP. This perception will encourage followers to withdraw from any political behavior which may attenuate the otherwise positive effect of their social network on their attributed status (Chang et al., 2009). For instance, although a subordinate may be well-connected to a large social network, their POP may cause them to refrain from communicating information regarding that network to their leader, which likely influences the evaluation of their social capital. Thus, POP should then weaken the relationship between follower social networks and leader attributions of status.
Follower modesty: Follower modesty should also influence the relationship between a follower’s social networks and attributed status of the follower. Modest individuals are those that are unassuming of their own achievements (Ridge & Ingram, 2017) and avoid attention (Chen, Bond, Chan, Tang, & Buchtel, 2009). Furthermore, modesty involves enhancing others rather than oneself (Chen et al., 2009), so a modest individual is not likely to promote information that may seem self-serving. Although modesty can be used as an impression management tactic (Blickle, Schneider, Kalthöfer, & Summers, 2012), we focus on trait modesty as a consistent characteristic across time in which individuals do not feel entitled to be treated preferentially (Diekmann, Blickle, Hafner, & Peters, 2015). More specific to our model, modest followers in a team likely do not draw attention to themselves in order to increase their own status.
Modest individuals have been linked to greater career success and upward mobility within organizations (Blickle et al., 2012). However, from a social capital perspective, we propose that modesty may act as a detriment to the leader’s evaluation of that individuals’ social capital, considering modest followers are not as willing to display the value of their social networks. Because modesty involves underestimating one’s own achievements (Ridge & Ingram, 2017), a modest individual may downplay their centrality within their networks or the size of their social networks in which they are involved. Furthermore, in their drive to enhance others (Chen et al., 2009), modest individuals may be prone to talk more highly of others in their social networks rather than themselves. Thus, when modest followers are interacting with their leader, they will be less likely to emphasize their valuable position or network structure, which affects the leader’s assessment of social capital and attributed status. We propose that a leader will underestimate the social capital of modest individuals and attribute less status to them, which weakens the positive relationship between the follower’s social networks and attributed status.
Leader Moderators
Perceived utility of followers: We also expect there are leader factors that should impact the leader’s willingness to borrow social capital. First, the team leader’s perceived utility of each follower, based on their social capital, should moderate the relationship between attributed status and LMXD. According to the social network literature, leaders have varying degrees of structural holes, or gaps of connections in their social networks (Burt, 1992; Oh, Labianca, & Chung, 2006). Further, the social capital and types of individuals needed to bridge these gaps in their social networks vary depending on the leaders’ needs (Oh et al., 2006). Because individuals have access to the resources within their social networks, they may serve as an access point for others to obtain those resources and achieve their own personal goals (Goodwin et al., 2009). In other words, a team’s leader will use each follower’s status (derived from their perception of that individual’s social capital), as an indicator of how useful each follower may be to the leader.
However, a leader’s reliance on follower status to enhance their own social capital may depend on the leader’s unique needs. A leader who has assigned two followers an identical level of status may favor the follower whose social capital helps them accomplish their own goals. For example, if a leader has a strong internal network in the organization but weak external connections throughout the industry, they may value a follower with industry connections over a follower with internal connections, even if those individuals technically have the same status. Therefore, the leader will be likely to invest more in relationships with individuals that they perceive to be of higher utility, which should ultimately impact the team’s LMXD.
Leader ambition: Following the definition set forth by Judge and Kammeyer-Mueller (2012), we define ambition as “the persistent and generalized striving for success, attainment, and accomplishment” (p. 759). Ambition may be a product of both personality and environment that is influenced by the feedback one receives (Steffens et al., 2018), personality traits (Judge & Kammeyer-Mueller, 2012), or level of social status (Judge & Kammeyer-Mueller, 2012). The outcomes associated with ambition have been mixed and may even carry a negative stigma in society (Jones, Sherman, & Hogan, 2017). Organizational studies have linked ambition to counterproductive work behavior (Schreurs, Hamstra, Jawahar, & Akkermans, 2020) and unethical behavior (Gürlek, 2021). However, researchers continue to emphasize its importance for career success (Jones et al., 2017; Judge & Kammeyer-Mueller, 2012). Thus, we expect that a leader’s ambition will influence the extent to which they differentiate the quality of their follower’s relationships based upon the follower’s attributed status.
Despite evidence that ambition can be both a vice and a virtue (Pettigrove, 2007), an ambitious leader aims to achieve success in the workplace and utilize the work team to achieve this success. Because people are motivated to get ahead in social settings (Hogan & Holland, 2003), and connections from others’ social capital can benefit an employee’s career (i.e., R. Li, Zhang, Zhu, & N. Li, 2021), a leader may see certain team members as more valuable in their striving for success. Therefore, ambitious leaders will be more likely to differentiate LMX relationships, such that they develop stronger relationships with those of higher status.
Team Moderators
Psychological safety climate: A few team characteristics are important in the explanation of how social networks ultimately impact LMXD as individual-level dynamics of social networks, and ensuing status, emerge at the team level in our described model. We specifically propose that psychological safety climate will reduce status’ impact on LMXD. Kahn (1990) defined psychological safety climate as “being able to show and employ one’s self without fear of negative consequences of self-image, status, or career” (p. 708). In the intervening years, team scholars have recognized it as a key variable that makes a group of people a team (Edmondson, 1999; Edmondson & Lei, 2014; Frazier, Fainshmidt, Klinger, Pezeshkan, & Vracheva, 2017; Newman, Donohue, & Eva, 2017). Individuals in teams with high levels of psychological safety are more likely to adopt a learning orientation (Bunderson & Boumgarden, 2010) and deal with problems and conflict productively (Bradley, Postlethwaite, Klotz, Hamdani, & Brown, 2012).
A leader’s motivation to borrow followers’ social capital and attribute higher LMX to a high-status follower may be subdued, mitigated, or lessened in teams with high levels of psychological safety climate. Members in these teams not only feel safe sharing and working together, but because of that, are also likely to feel more connection to each other and the leader. Further, teams with higher levels of psychological safety are more likely to work together and be productive (Frazier et al., 2017). In the contexts of these unified teams, the impact of the natural variation of follower status on a leader’s LMX judgments is more likely to be attenuated as the leader is less likely to prioritize each member’s social capital and status. Indeed, high safety teams are less status conscious and thus likely to have less LMXD from status influences. That is, leaders are more likely to attribute more LMX to lower status followers and less LMX to higher status followers, than leaders’ teams with low levels of psychological safety. We thus propose:
Relationship conflict: Another team-level characteristic that we argue is key to understanding how social networks impact LMXD is relationship conflict. This construct involves emotional incompatibilities and tensions among teammates (Bradley, Anderson, Baur, & Klotz, 2015). Since the seminal work by Jehn (e.g., 1995), scholars have found more and more evidence that relationship conflict damages important team processes (Barrick Stewart, Neubert, & Mount, 1998) and ultimately team performance (de Wit et al., 2012). Scholars now consider relationship conflict one of the main “negative” aspects of teams and something to be avoided (de Wit, Greer, & Jehn, 2012), although some evidence suggests it can be overcome (Thiel, Harvey, Courtright, & Bradley, 2019). In addition to the standard “main effects” view of relationship conflict in teams, this variable can also characterize certain teams and help paint a “contingency” picture of a unique team context within which other team variables can be better understood.
Relationship conflict breeds division in teams and creates a context where teammates harbor resentment and animosity toward each other, which causes the team to underperform. Teammates in these teams do not work well together, and hence, individual efforts and behaviors may become more important in order to get work done. This individualized focus of high-conflict teams also creates an environment in which social capital is a prominent feature of each team member rather than that of the team as a whole. This situation will likely promote dyadic relationships between the leader and certain followers to work with, more so than the entity of the entire team. Leaders who need to identify a few followers to work with more closely to access their network resources are more likely to differentiate relationships amongst their followers. That is, a leader will likely give less LMX to low-status members and more LMX to high-status members. We propose the following:
Organization Moderators
Organizational climate: Finally, we propose two contextual factors as organizational-level boundaries in our model: organizational climate and organizational reward system. First, organizational climate is “the shared perceptions of and the meaning attached to the policies, practices, and procedures employees experience and the behaviors they observe getting rewarded and that are supported and expected” (Schneider et al., 2013; p. 362). An organization’s climate is determined by employees’ expectations and beliefs, which influences behavior and outcomes, at various levels within an organization (e.g., Luthans, Norman, Avolio, & Avey, 2008; Zohar & Luria, 2005). Thus, the organizational climate will influence the relationships outlined in our model.
Because organizational climate influences leader behaviors in the organization (Gardner, Avolio, Luthans, May, & Walumbwa, 2005), we propose that the organizational climate will influence the degree to which leaders differentiate relationships among team members. In some organizational climates (Schneider et al., 2013), leaders may be expected to differentiate among their followers. For instance, because social networks are salient in the sales environment (i.e., Collins & Clark, 2003; Hirst, Van Knippenberg, Zhou, Quintane, & Zhu, 2015; Mehra, Dixon, Brass, & Robertson, 2006), organizations that are highly sales-dependent may expect leaders to have higher quality relationships with higher status team members who can utilize their social capital to sell more for the company. Conversely, in nonprofit organizations (or organizations with strong prosocial missions), the climate may dictate that valuing certain employees over others based on their social capital is unacceptable. Overall, the organizational climate dictates which leader behaviors are normative, so we expect that organizational climates that encourage leaders to prioritize relationships with high-status team members should be associated with more LMXD.
Compensation system: Second, the compensation system of the organization will influence the relationships in our conceptual model. More specifically, we focus on the extent to which a company utilizes pay-for-performance (PFP), or the degree to which an employee’s pay is determined by their performance or output (Maltarich, Nyberg, Reilly, Abdulsalam, & Martin, 2017). A broad group of literature has shown that there is an incentive effect in organizations that utilize PFP (Cadsby, Song, & Tapon, 2007), as exemplified by multiple studies that show a positive relationship between PFP and in-role task performance (He, Li, Feng, Zhang, & Sturman, 2021). In other words, employees in PFP organizations are likely to increase their performance in order to increase their pay.
Hence, we believe that organizations utilizing a PFP compensation system (i.e., He et al., 2021; Maltarich et al., 2017) will exacerbate the influence of social capital in our model. If the pay for a leader in an organization is dependent upon their performance, they will want to maximize their productivity. In order to maximize output under a high PFP system, the leaders will likely want to work more closely with higher status team members that perceivably have higher social capital, because these followers are most likely to have the resources and information available to help increase the leader’s output, and ultimately, pay. Overall, PFP will lead to leaders prioritizing higher quality follower relationships over lower quality follower relationships, which influences the LMXD of the team.
Discussion
Theoretical Implications
By exploring the relationship between social networks and LMXD, our study provides several contributions to theory. First, we extend current literature on LMXD by providing a potential antecedent of LMXD: follower social networks. Prior research on LMXD focused primarily on the outcomes of LMXD and has largely overlooked its antecedents (Chen, He, & Weng, 2018; Henderson et al., 2009; Le Blanc & González-Romá, 2012; Lee et al., 2016; Ma & Qu, 2010; Wang, Xu, Liu, & Jiang, 2015). By identifying potential origins of LMXD, we extend the construct’s nomological network and provide a basis for understanding a leader’s subjectivity in the differentiation process within a team. In doing so, we offer a conceptual framework to better understand why a leader may differentiate amongst followers on a team.
Second, by utilizing social capital theory, we apply a novel theoretical lens to the LMXD literature. Various scholars have called for an integration of LMXD and social networks (Buengeler et al., 2021; Goodwin et al., 2009; Martin et al., 2018), which makes sense because less research has focused on antecedents of LMXD than its consequences, and what little work that has been done focuses on human capital variables. Surprisingly, we found no research investigating the impact of social networks on a leader’s differentiation amongst follower relationships at the team level. Hence, our model adds important understanding to the emergence of LMXD on a work team and provides a framework upon which future research can build.
Finally, by examining this relationship at multiple levels, we answer prior calls for multilevel approaches in both the social networks and LMXD literatures (e.g., Carter et al., 2015; Matta & Van Dyne, 2020). For instance, in a recent review Matta and Van Dyne (2020) argue that “it is critically important to consider the effects of LMX and LMX differentiation across multiple levels of analysis” (p. 175). Thus, our multilevel analysis contributes to this literature by deepening our understanding of how individual-level characteristics may drive team-level LMXD, while being influenced by moderating factors at the follower, leader, team, and organizational levels.
Practical Implications
This paper also provides several practical implications for organizations. Employees are spending more time at work in teams (Cooper, Rockmann, Moteabbed, & Thatcher, 2021; Li, Kristof-Brown, & Nielsen, 2019). There is thus a growing need to better understand team-level phenomena such as LMXD. By identifying social networks as a potential antecedent of LMXD, this model provides insight to employees who wish to stand out in their work teams. Specifically, employees should attempt to gain more notable positions in prominent social networks, and those employees who strive for higher quality relationships with their leaders should be strategic in communicating their social capital to their leader.
Our paper also illuminates an inherent downside for certain team members: what happens to the followers with low status due to their social networks? By proposing that leaders are more interested in followers who provide crucial social capital resources, we acknowledge that leaders may exclude some followers due to their low status. This dynamic could be particularly detrimental to under-represented minorities and women by reinforcing the “in-group” and further excluding the “out-group.” These decisions may not only cause division within the team, but may also lead to certain employees being overlooked because they do not offer the leader enough social resources. Thus, organizations should evaluate their support of under-represented minority groups and ensure they have opportunities to network and build social capital.
In addition, leaders should be cognizant of the ways that differentiating LMX among team members may lead to divergent outcomes. Though our model focuses on the antecedents of LMXD, prior research demonstrates that perceptions of justice moderate the relationship between LMXD and important outcomes such as team proactivity and performance (Chen et al., 2018; Wang et al., 2015). Thus, leaders who differentiate LMX on the basis of social networks should be strategic in the ways that they maintain perceptions of justice. In other words, although a manager may desire to maximize their careers by prioritizing followers based on social capital, they must do so in a balanced way for the team.
Future Research
Our model provides several avenues for future research. First and foremost, our model should be tested to provide empirical evidence of the relationship between social networks and LMXD. Longitudinal studies would be particularly useful in this endeavor as they would provide evidence for causal relationships among social networks, status, and LMXD. Longitudinal studies may also help uncover temporal effects of social networks on LMXD. That is, do social network characteristics have more influence on status during the interview process than midway through a team’s life cycle? Evaluating the temporal nature of status attributions and LMXD would help scholars understand how previous attributions of status might change in light of new information regarding a follower’s social network.
Empirical testing also provides a way to understand the nuanced impact of a follower’s social network on leader attributions of status. In the present paper, we posit that an individual’s centrality within a social network and network’s structural characteristics influence a leader’s status attributions of their followers. We encourage future research to explore additional facets of a follower’s social network, such as homophily (the tendency for people to seek out others who are similar to themselves) or tie multiplexity (the overlap of roles, affiliations, or exchanges; Park et al., 2020), that may also influence this relationship. Further, it is possible that some network factors are more influential than others in a leader’s perception of follower social capital. By using social network analysis in teams (e.g., Wölfer, Faber, & Hewstone, 2015), researchers could evaluate which social network factors influence leader perceptions of social capital more than others.
Qualitative research may also be helpful in this endeavor, as it provides thick descriptions regarding individuals’ lived experiences (Tracy, 2019). Thus, qualitative research could be used to interview leaders about the cues that indicate a follower has particularly rich social capital and how their decisions to invest in relationships with certain followers are strategic (and controlled) or automatic (Schneider & Shiffrin, 1977). Qualitative research may be also helpful in determining how a leader’s own biases regarding an ideal follower influences their perception of social capital. If leaders hold implicit theories regarding prototypical social networks, this could influence their decision to attribute status. Thus, qualitative research could unpack some of these nuanced biases.
Second, we echo the call of previous scholars to continue to integrate novel theoretical frameworks into the LMXD literature (Martin et al., 2018). For instance, scholars could use affective events theory (Weiss & Cropanzano, 1996) to investigate the ways in which attributing status may trigger emotions for followers and their teammates. Future research could also use signaling theory (Spence, 2002) to explore the various ways that followers signal information regarding their social networks to their leader. Our model does not distinguish between active or passive ways that a leader learns about a follower’s social network. However, this perspective may illuminate how followers actively signal this information to their leaders. Thus, future research could explore the processes followers use to actively send social network cues to their leaders.
Lastly, we encourage scholars to examine other factors that may serve as boundary conditions that would influence the relationships in this model. Certain personality characteristics of both leader and follower may be particularly interesting to investigate in this context. For instance, we know that Machiavellian individuals are prone to manipulating situations for their own gain (Paulhus & Williams, 2002), so Machiavellian leaders may be more likely to assess followers’ social networks as opportunities to manipulate for self-gain. In addition, a follower’s level of extroversion may impact the likelihood of communicating their social network to their leader, thus impacting LMXD. Overall, our proposed model serves as a catalyst for these and other avenues of future research.
Conclusion
In sum, in this paper, we draw on social capital theory to propose a link between followers’ social networks and LMXD. In doing so, we offer a multilevel framework that explains why leaders may differentiate among followers. Specifically, we propose that as leaders assess each follower’s social network and inherent social capital, they attribute various levels of status within the team, which influences the leader’s decision to develop higher quality relationships with members of high status. This decision should ultimately impact team-level LMXD. This paper contributes to our understanding of the individual-level factors that impact team-level LMXD and identifies one potential antecedent of LMXD. By offering this theoretical account of the origins of LMXD, we hope to advance theory by providing a conceptual model that offers several opportunities for future research.
Footnotes
Declaration of Conflicting Interests
The author(s) declared no potential conflicts of interest with respect to the research, authorship, and/or publication of this article.
Funding
The author(s) received no financial support for the research, authorship, and/or publication of this article.
