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Journal of Applied Psychology 1999, Vol. 84, No. 5, 680-694 Copyright 1999 by the American Psychological Association, Inc. 002I-9010/99/S3.00 The Ties That Bind: The Impact of Leader-Member Exchange, Transformational and Transactional Leadership, and Distance on Predicting Follower Performance Jane M. Howell and Kathryn E. Hall-Merenda University of Western Ontario The authors examined the linkages between leader-member exchange (LMX), transforma- tional and transactional leadership, and physical distance in predicting performance of 317 followers over a 1-year period. Results from a partial least squares analysis revealed that LMX was related positively to transformational and contingent reward leadership and negatively to management-by-exception. LMX and active management-by-exception posi- tively predicted follower performance, and physical distance moderated leadership-perfor- mance relationships. Transformational leadership produced significantly higher follower performance in close versus distant situations, whereas LMX produced high follower per- formance irrespective of physical distance between leaders and followers. Interest in leadership in complex organizations is charac- terized by the parallel development of two different per- spectives. One viewpoint is leader-focused. This stream of research attempts to explain individual, group, or organiza- tional performance outcomes by analyzing specific leader behaviors and linking them directly to those outcomes. Examples of such perspectives include transformational, charismatic, and value-based theories of leadership, as de- veloped by Bass (1985), House (1977), and House, Del- becq, and Taris (1996), respectively. In contrast, the second perspective focuses on the explicit one-on-one relationships that develop between leader and follower. Adherents of this perspective propose a link between follower performance and the quality and level of mutual trust, respect, and influence within those individual leader-follower relation- ships. The best example of this perspective is the leader- member exchange (LMX) theory of leadership originated Jane M. Howell and Kathryn E. Hall-Merenda, Richard Ivey School of Business, University of Western Ontario, London, On- tario, Canada. Funding for this research was provided by the Social Sciences and Humanities Research Council of Canada (Grant 410-92- 1115). We gratefully acknowledge Derrick Neufeld for assisting us with data collection and Bruce Avolio for his thoughtful comments on the study's design. We also thank David Day and Francis Yammarino for their constructive comments on earlier versions of this article. Correspondence concerning this article should be addressed to Jane M. Howell, Richard Ivey School of Business, University of Western Ontario, London, Ontario, Canada N6A 3K7. Electronic mail may be sent to [email protected]. by Graen and his colleagues (Graen, 1976; Graen & Cash- man, 1975; Graen, Novak, & Sommerkamp, 1982; Graen & Scandura, 1987; Graen & Uhl-Bien, 1995). Leader-focused research implicitly assumes a relation- ship of some sort between leader and follower, and that implied relationship is fundamental to the link between leader behavior and follower response. An implied relation- ship, however, fails to answer questions of how, and per- haps why, followers perform differently for different lead- ers. Research focused on leader-follower relationships, on the other hand, pays only marginal attention to what leaders do to develop a relationship with followers. Linking the two perspectives, emphasizing both how leaders behave in order to elicit different levels of follower performance and what leaders do to encourage distinct leader-follower relation- ships with each follower, is potentially important in two ways. First, it may provide a reasonable explanation for what is happening inside the "black box" between observed leader behaviors and measured follower outcomes. Second, leader behaviors may provide an explanation regarding how the leader actually establishes and develops differing qual- ities of relationships with different followers. The theoretical integration of transformational and LMX models of leadership has recently been proposed by Graen and Uhl-Bien (1995) and Gerstner and Day (1997). How- ever, the empirical linkages between these models of lead- ership are relatively unexplored to date. One purpose of the present study is to test empirically the joint impact of the behaviorally based transformational and the relationship- based LMX models of leadership on predicting follower performance. Previous research on LMX theory has primarily investi- 680

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Page 1: The Ties That Bind: The Impact of Leader-Member Exchange, … · 2018-12-21 · what is happening inside the "black box" between observed leader behaviors and measured follower outcomes

Journal of Applied Psychology1999, Vol. 84, No. 5, 680-694

Copyright 1999 by the American Psychological Association, Inc.002I-9010/99/S3.00

The Ties That Bind: The Impact of Leader-Member Exchange,Transformational and Transactional Leadership, and Distance on Predicting

Follower Performance

Jane M. Howell and Kathryn E. Hall-MerendaUniversity of Western Ontario

The authors examined the linkages between leader-member exchange (LMX), transforma-tional and transactional leadership, and physical distance in predicting performance of 317followers over a 1-year period. Results from a partial least squares analysis revealed thatLMX was related positively to transformational and contingent reward leadership andnegatively to management-by-exception. LMX and active management-by-exception posi-tively predicted follower performance, and physical distance moderated leadership-perfor-mance relationships. Transformational leadership produced significantly higher followerperformance in close versus distant situations, whereas LMX produced high follower per-formance irrespective of physical distance between leaders and followers.

Interest in leadership in complex organizations is charac-terized by the parallel development of two different per-spectives. One viewpoint is leader-focused. This stream ofresearch attempts to explain individual, group, or organiza-tional performance outcomes by analyzing specific leaderbehaviors and linking them directly to those outcomes.Examples of such perspectives include transformational,charismatic, and value-based theories of leadership, as de-veloped by Bass (1985), House (1977), and House, Del-becq, and Taris (1996), respectively. In contrast, the secondperspective focuses on the explicit one-on-one relationshipsthat develop between leader and follower. Adherents of thisperspective propose a link between follower performanceand the quality and level of mutual trust, respect, andinfluence within those individual leader-follower relation-ships. The best example of this perspective is the leader-member exchange (LMX) theory of leadership originated

Jane M. Howell and Kathryn E. Hall-Merenda, Richard IveySchool of Business, University of Western Ontario, London, On-tario, Canada.

Funding for this research was provided by the Social Sciencesand Humanities Research Council of Canada (Grant 410-92-1115). We gratefully acknowledge Derrick Neufeld for assisting uswith data collection and Bruce Avolio for his thoughtful commentson the study's design. We also thank David Day and FrancisYammarino for their constructive comments on earlier versions ofthis article.

Correspondence concerning this article should be addressed toJane M. Howell, Richard Ivey School of Business, University ofWestern Ontario, London, Ontario, Canada N6A 3K7. Electronicmail may be sent to [email protected].

by Graen and his colleagues (Graen, 1976; Graen & Cash-man, 1975; Graen, Novak, & Sommerkamp, 1982; Graen &Scandura, 1987; Graen & Uhl-Bien, 1995).

Leader-focused research implicitly assumes a relation-ship of some sort between leader and follower, and thatimplied relationship is fundamental to the link betweenleader behavior and follower response. An implied relation-ship, however, fails to answer questions of how, and per-haps why, followers perform differently for different lead-ers. Research focused on leader-follower relationships, onthe other hand, pays only marginal attention to what leadersdo to develop a relationship with followers. Linking the twoperspectives, emphasizing both how leaders behave in orderto elicit different levels of follower performance and whatleaders do to encourage distinct leader-follower relation-ships with each follower, is potentially important in twoways. First, it may provide a reasonable explanation forwhat is happening inside the "black box" between observedleader behaviors and measured follower outcomes. Second,leader behaviors may provide an explanation regarding howthe leader actually establishes and develops differing qual-ities of relationships with different followers.

The theoretical integration of transformational and LMXmodels of leadership has recently been proposed by Graenand Uhl-Bien (1995) and Gerstner and Day (1997). How-ever, the empirical linkages between these models of lead-ership are relatively unexplored to date. One purpose of thepresent study is to test empirically the joint impact of thebehaviorally based transformational and the relationship-based LMX models of leadership on predicting followerperformance.

Previous research on LMX theory has primarily investi-

680

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TIES THAT BIND 681

gated the characteristics of the LMX relationship and therelationship between LMX and organizational variables(Graen & Uhl-Bien, 1995). The preponderance of empiricalstudies on transformational leadership has focused on com-paring the impact of transformational and transactionalleadership on follower performance, satisfaction, and effec-tiveness (Bass & Avolio, 1993; Howell & Avolio, 1993).The role of organizational context in these two leadershipmodels has been largely neglected (Gerstner & Day, 1997;Liden, Sparrowe, & Wayne, 1997; Pawar & Eastman,1997). Because situational moderators may affect the link-age between leadership and performance outcomes (Gerst-ner & Day, 1997), the present study examines how thephysical distance separating leader and follower moderatesthe impact of LMX relationships and transformational andtransactional leadership on predicting follower performanceover an extended time interval.

Leadership and Performance

In his extension of Burns's (1978) analysis of politicalleadership, Bass (1985) differentiated between the quid proquo dynamics of transactional leadership and transfor-mational leadership. In transactional leadership, leader-follower relationships are based on a series of exchanges orbargains between leaders and followers. Bass (1985) differ-entiated two types of transactional leadership—contingentreward and management-by-exception—according to theleader's level of engagement with followers and activitylevel. In contingent reward leadership, the leader and fol-lower negotiate an agreement regarding what rewards orrecognition the follower will receive for a specific levelof performance. Rewards, recognition, or both are pro-vided when the follower attains the contracted level ofperformance.

Leaders can also transact with followers by practicingmanagement-by-exception, that is, by focusing on mistakes,intervening only after standards have not been met, anddelaying decisions. Hater and Bass (1988) distinguishedbetween passive management-by-exception, where theleader remains passive until problems that need correctingemerge and then intervenes with criticism or reproof, andactive management-by-exception, where the leader activelymonitors followers' performances to anticipate mistakes ordeviations from standards before they become a problem. Ineither case, negative feedback, punishment, and disciplineare the likely results (Bass & Avolio, 1993).

Bass (1985) posited that transformational leadership en-ables followers to transcend their own self-interests for acollective higher purpose, mission, or vision and to exceedperformance expectations. Transformational leaders com-municate a compelling vision of the future (charisma);provide symbols and emotional appeals to increase aware-ness of mutual goals (inspirational motivation); encourage

followers to question traditional ways of doing things (in-tellectual stimulation); and treat followers differently butequitably on a one-on-one basis (individualized consider-ation; Bass & Avolio, 1993).

Previous empirical research and meta-analyses have in-dicated that transformational and transactional leadershiphave differential effects on individual performance. Over 35studies have reported positive relationships between trans-formational leadership and follower performance (Kirk-patrick & Locke, 1996). Empirical evidence has suggestedthat transformational leadership or its components predictpositive performance outcomes in field studies (Curphy,1992; Hater & Bass, 1988; Howell & Avolio, 1993; Keller,1992), laboratory studies (Howell & Frost, 1989; Kirk-patrick & Locke, 1996), historical archival studies (House,Spangler, & Woycke, 1991), field experiments (Barling,Weber, & Kelloway, 1996), and meta-analytic studies(Lowe, Kroeck, & Sivasubramaniam, 1996). Thus, transfor-mational leaders who encourage followers to question as-sumptions and generate new ideas, develop their capabili-ties, and aspire to accomplish challenging future goals areexpected to enhance followers' performance on the job.

The majority of previous empirical studies have demon-strated that contingent reward leadership also has a positiveimpact on follower satisfaction and performance (Hunt &Schuler, 1976; Klimoski & Hayes, 1980; Podsakoff, Todor,Grover, & Huber, 1984; Podsakoff, Todor, & Skov, 1982;Sims &-- Szilagyi, 1975), although negative relationshipshave been reported (Howell & Avolio, 1993; Yammarino &Bass, 1990). The majority of research findings suggest thatcontingent reward leadership has a positive effect on indi-vidual follower performance.

Empirical examination of the impact of management-by-exception leadership on followers' performance has ob-tained mixed results. Leadership scholars have reportedpositive relationships (Greene, 1976), negative relationships(Bass & Avolio, 1990; Bass, Waldman, Avolio, & Bebb,1987; Hater & Bass, 1988; Sims & Szilagyi, 1975), and norelationships (Hunt & Schuler, 1976; Podsakoff et al., 1984)between leader contingent sanctioning behavior and fol-lower performance. However, the weight of empirical evi-dence suggests that constant reprimand can lead to Bass's(1985) prediction of follower hostility, reduction in effort,and ultimately lower levels of performance. Thus, priorresearch on transformational and transactional leadershipsuggests the following hypotheses:

Hypothesis 1: Transformational leadership will positivelypredict follower performance over a 1-year period.

Hypothesis 2: Contingent reward leadership will positivelypredict follower performance over a 1-year period.

Hypotheses 3a and 3b: Management-by-exception leader-ship, either active or passive, will negatively predict followerperformance over a 1-year period.

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682 HOWELL AND HALL-MERENDA

Leader-Follower Relationships, LeadershipBehaviors, and Performance

LMX theory proposes that leaders establish different so-cial exchange relationships with different followers. Low-quality LMX relationships are characterized by unidirec-tional downward influence, economic exchange behaviors,formal role-defined relations, and loosely coupled goals.Leaders in low-quality LMX relationships rely almost ex-clusively on the formal employment contract in exchangeswith their members and maintain a distance between them-selves and their followers (Dunegan, Duchon, & Uhl-Bien,1992). Members in these relationships abide by the prescrip-tions and proscriptions of the employment contract, affordtheir leaders the authority of their positions, and are com-pensated for task performance by the organization (not theleader) in coin and various benefits (Dunegan et aL, 1992;Graen & Uhl-Bien, 1995; Sparrowe & Liden, 1997; Wayne,Shore, & Liden, 1997).

High-quality LMX relationships are characterized by mu-tual trust, respect, influence, and obligation (Graen & Uhl-Bien, 1995). Leaders in such relationships rely more heavilyon followers to act in their stead (Dunegan et al., 1992) andencourage them to undertake more responsible activitiesthan they otherwise would (Graen & Uhl-Bien, 1995). Fol-lowers in high-quality LMX relationships interact fre-quently with their leaders and have their leaders' support,confidence, encouragement, and consideration, and theytake on added duties, play a greater role in meeting work-group goals, and deliver performance beyond contractualexpectations (Dunegan et al., 1992; Sparrowe & Liden,1997; Wayne et al., 1997).

Graen and Uhl-Bien (1995) noted that LMX is bothtransactional and transformational because it begins as atransactional social exchange and may evolve into a trans-formational social exchange. Separating high- and low-quality relationships is the relative weight placed on mate-rial exchange and social exchange in that "materialexchange is different from social exchange (and LMX)[because] when material exchange is the basis for the rela-tionship, the process is not really leadership; it is closer to'managership' or 'supervision'" (Graen & Uhl-Bien, 1995,p. 238).

Graen and Uhl-Bien (1995) posited that low-qualityLMX, characterized by downward influence, economic ex-change, and formal role-defined relationships, is analogousto transactional leadership (Bass, 1985), in which leadersmake requests of followers based on their organizationalposition, and followers comply because of their reportingrelationship to the leader and the leader's control of re-wards. Under transactional leadership, followers are moti-vated to fulfill their self-interests. Conversely, high-qualityleader-follower relationships, defined by mutual trust, re-spect, internalization of shared goals, and the willingness of

followers to exert extra effort, are aligned with transforma-tional leadership, in which leaders inspire followers to tran-scend their own self-interests for the broader collectivepurpose (Gerstner & Day, 1997; Graen & Uhl-Bien, 1995).In this instance, formal hierarchical relationships give wayto "partnerships" between leaders and followers based onmutual reciprocal influence.

Graen and Uhl-Bien's (1995) arguments relating thequality of LMX to transformational and transactional lead-ership parallel Burns's (1978) discussion of these leadershipbehaviors as two ends of a continuum. Bass and Avolio(1993), on the other hand, conceived of transformationaland transactional leadership as conceptually distinct butpositively related behaviors. Empirical evidence supportsBass's (1985) fundamental proposition that transforma-tional leadership augments transactional leadership in pre-dicting leader effectiveness (Hater & Bass, 1988; Seltzer &Bass, 1990; Waldman, Bass, & Einstein, 1987). Moreover,the majority of previous studies and meta-analyses havedemonstrated that transformational leadership and transac-tional contingent reward leadership have a positive impacton follower outcomes, although transformational leadershipis more positively related to these outcome variables thancontingent reward (e.g., Curphy, 1992; Lowe et al., 1996).Thus, in the words of Bass and Avolio (1993, p. 70), "theevidence to date indicates that viewing transformationalleadership as an extension to transactionally based modelsof leadership is clearly warranted."

In a study of naval officers, Deluga (1992) directly dem-. onstrated that transformational leadership is significantly

associated with high-quality exchanges. Thus, we hypothe-sized that the quality of LMX would be positively related totransformational leadership, which helps followers reframewhat the future might be, encourages them to question thetried-and-true ways to explore alternative possibilities, andcoaches them to fully develop their capabilities. We furtherhypothesized that the quality of LMX would be positivelyrelated to contingent reward leadership but to a lesser extentthan it is related to transformational leadership, becausecontingent reward leaders attend less to the relational as-pects of leadership and more to defining the task and levelof performance expected from followers. Finally, we pro-posed that the quality of LMX would be negatively relatedto management-by-exception leadership, which emphasizesmistakes, delays decisions, and avoids intervening untilsomething has gone wrong.

Hypothesis 4: The quality of leader-follower relationshipswill be positively related to transformational leadership.

Hypothesis 5: The quality of leader-follower relationshipswill have a lower positive relationship with contingent rewardleadership than with transformational leadership.

Hypotheses 6a and 6b: The quality of leader-follower rela-tionships will be negatively related to management-by-exception leadership that is active or passive.

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Prior empirical studies (e.g., Graen, Novak, & Som-merkamp, 1982; Liden & Graen, 1980; Liden, Wayne, &Stilwell, 1993; Scandura & Schriesheim, 1994; Wayne &Ferris, 1990; Wayne et al., 1997) and a recent meta-analysis(Gerstner & Day, 1997) have demonstrated positive associ-ations between LMX and performance ratings. Thus, theaccumulated empirical evidence suggests a positive rela-tionship between LMX and follower performance, as doesthe conceptual link between LMX and transformational andcontingent reward leadership, which indirectly links LMXto follower performance. On the basis of this literature, weproposed the following hypothesis:

Hypothesis 7: The quality of leader-follower relationshipswill positively predict follower performance.

Physical Distance, Leadership Behaviors, andLeader-Follower Relationship Quality

How organizational context influences the emergenceand effectiveness of transformational leadership is a rela-tively unexplored issue (Avolio & Bass, 1988; Bass, 1985;Bass & Avolio, 1993; Bryman, 1992; Pawar & Eastman,1997; Shamir, House, & Arthur, 1993). Likewise, Gerstnerand Day (1997) observed that the role of organizationalcontext in the LMX model requires further examination.One contextual variable that may influence both the qualityof leader-follower relationships and leadership behaviors isphysical distance. Dramatic changes in organizational struc-tures, size, complexity, and work arrangements imply thatleaders are increasingly responsible for managing followerswho reside in different locations. Leaders in network orga-nizations, multinational companies, or domestic companieswith far-flung sites are faced with the challenges of moti-vating and evaluating followers who they cannot see. Howleaders' behavior and relationships with their followers isaffected by the need to span physical distances is relativelyunexplored.

Several leadership scholars have argued that physicaldistance decreases the opportunities for direct influence andpotentially the effectiveness of the working relationshipbetween leader and follower (Bass, 1990; Liden et al., 1997;Napier & Ferris, 1993). In fact, Kerr and Jermier (1978)observed that physical distance creates circumstances inwhich effective leadership may be impossible, as it tends toneutralize both relationship-oriented and task-oriented lead-ership behaviors. Conversely, physical proximity betweenleaders and followers facilitates the communication processand quality of exchange between leaders and followers(Bass, 1990).

The moderating effects of physical distance on the rela-tionship between different leadership behaviors and fol-lower performance and satisfaction have been directly stud-ied in the leadership literature. For example, Podsakoff et al.(1984) reported that physical distance negatively moderated

the relationship between contingent reward leadership andperformance. They concluded that the leader's ability toestablish contingent contracts between performance expec-tations and rewards, to observe follower performance, andto provide timely rewards on the fulfillment of the perfor-mance contract are undermined with increasing physicaldistance from followers. Extrapolating from Podsakoff etal.'s (1984) conclusion, with increasing physical distancefrom followers, leaders may be more likely to practicearbitrary or noncontingent punishment. In situations inwhich physical distance precludes personal interactionswith followers, the leader's performance-related commentsmay be seen as arbitrary because the leader may not havehad the opportunity to observe follower performance di-rectly or to provide timely feedback. If distant follow-ers perceive punishment as arbitrary or unwarranted, thentheir performance may be more negatively affected bymanagement-by-exception leadership than punishment thatis perceived as contingent or warranted, which may be thecase for more proximate followers. The empirical evidenceto date supports the moderating influence of physical dis-tance on the relationship between contingent reward lead-ership and follower performance. Podsakoff et al.'s (1984)argument, extended to management-by-exception, suggeststhat management-by-exception leadership will produceworse follower performance when physical distance is highrather than low. Their study suggests the following hypoth-eses:

Hypothesis 8a: Physical distance between leader and followerwill moderate the relationship between contingent rewardleadership and follower performance such that contingentreward leadership will produce higher follower performancewhen physical distance is low rather than high.

Hypotheses 8b and 8c: Physical distance between leader andfollower will moderate the relationship between active andpassive management-by-exception leadership and followerperformance such that active and passive management-by-exception will have a more negative impact on followerperformance when physical distance is high rather than low.

High-quality relationships are characterized by followersspending more time and energy communicating with theleader than do those in low-quality relationships (Graen &Scandura, 1987). Additionally, followers in high-qualityrelationships receive higher levels of support, confidence,and consideration from the leader (Graen & Uhl-Bien,1995). Such high-quality relationships can be depicted interms of social exchanges that are more easily fosteredwhen physical proximity and face-to-face interactions arepossible (Sparrowe & Liden, 1997).

Shamir (1995) advanced similar arguments in his discus-sion of the influence processes used by transformationalleaders who are socially close versus those who are sociallydistant from their followers. He contended that in closeleadership situations, leaders have a greater opportunity to

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684 HOWELL AND HALL-MERENDA

show individualized consideration, sensitivity to and inter-est in followers' needs, and support towards followers.Trust between leaders and followers is more likely in closethan in distant circumstances because there are greater op-portunities to interact directly, establish continuity in per-sonal contacts, and engage in relationship building. Find-ings from a content analysis of interview transcripts ofdescriptions of close versus distant charismatic leaders re-vealed that close charismatic leaders were viewed as show-ing more consideration and openness with others, settinghigh performance standards, being unconventional in theirbehavior, and having a greater impact on followers' task-related motivation and behavior. Although Shamir's theo-retical arguments and empirical evidence apply to socialdistance, similar arguments can also be applied to physicaldistance between leaders and followers (Napier & Ferris,1993) because both variables influence the potential forinteraction.

It may be equally challenging to be a follower at adistance. Working in the impression management field,Gardner and Martinko (1988a) noted that workers withoffices located near their boss probably receive more cuesand opportunities for upward influence than do relativelyisolated employees. They also found that school principalsspent more time on verbal self-presentation to higher status,external (physically distant) audiences, in this case super-intendents and other central administrative staff (Gardner &Martinko, 1988b). Ferris, Judge, Rowland, and Fitzgibbons(1994) noted that physical distance had a significant nega-tive effect on supervisor-focused influence tactics, possiblybecause of the types of behaviors used (doing personalfavors for supervisors, complimenting them on their dress orappearance, showing interest in their personal life and vol-unteering help on tasks). This research implies that employ-ees perceive a greater need to use upward influence tacticsand engage in impression management when they are dis-tant from their leaders, but that their opportunity to usethose tactics effectively, and possibly to establish high-quality relationships with their leader, is limited by distance.In support of this argument, Judge and Ferris (1993) notedas the number of opportunities a supervisor has to observean employee increases, that employee's performance ratingalso increases.

Increasing physical distance decreases the likelihood offorming and sustaining high-quality relationships by limit-ing the opportunities for both leader and follower to engagein the necessary behaviors to form high-quality relation-ships. Distance also means less opportunity for leaders toobserve followers and potentially lower performance ratingsfor employees at a distance. Thus:

Hypothesis 8d: Physical distance between leader and followerwill moderate the relationship between LMX and followerperformance such that LMX will produce higher followerperformance when physical distance is low rather than high.

Hypothesis 8e: Physical distance between leader and followerwill moderate the relationship between transformational lead-ership and follower performance such that transformationalleadership will produce higher follower performance whenphysical distance is low rattier than high.

Method

Sample

The sample included 109 community banking managers and the317 employees who reported directly to them (hereinafter referredto as direct reports') in a large Canadian financial institution. Eachmanager, who was responsible for personal and commercial finan-cial services delivery to customers, had four to six branch manag-ers in a designated geographic area reporting to him or her. Thecommunity banking managers were primarily men (95%) who hadworked an average of 25 years with the company and werebetween 37 and 60 years of age, with the average age being 48years. The direct reports were almost evenly split between men(52%) and women (48%), had worked an average of 20 years withthe company, and were between 27 and 66 years of age, with theaverage age being 44 years.

Procedure

Two sources of data were used in the present study. First, alldirect reports of each target leader were asked to describe theleadership behavior of their boss. Six months later the same directreports were asked to complete the LMX scale. Second, directreport performance data were gathered from company records.These"performance data were obtained approximately 1 year afterthe second administration of the survey measures to direct reports.To minimize the problem of common method bias, we gathereddata at multiple points in time and from different sources. Inparticular, because ratings of LMX and leadership behaviors weregenerated by the same direct reports, effect sizes may be overes-timated because of direct reports' proclivity to maintain consis-tency in their responses (Podsakoff & Organ, 1986). As recom-mended by Avolio, Yammarino, and Bass (1991), a temporal delaybetween data collection points for different constructs from samesources was adopted in the present study to reduce the potential forinflated relationships.

Surveys were distributed through the company's internal mailsystem and were returned directly by external mail to the investi-gators. All respondents were assured by the investigators and thevice-chairman of the personal and commercial financial servicesdivision that their responses would remain confidential. The over-all response rate was 86% for leaders and 67% for direct reports.

Measures

Leadership behavior. Leadership behavior was measured withBass and Avolio's (1990) Multifactor Leadership Questionnaire(MLQ) Form 5X. The four scales used to measure transformationalleadership were (a) charisma (six items; sample item: "Communi-cates a shared vision of the future"), (b) inspirational motivation(six items; sample item: "Communicates a positive and hopefuloutlook for the future of our organization"), (c) intellectual stim-ulation (five items; sample item: "Asks questions that prompt me

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to think"), and (d) individualized consideration (seven items; sam-ple item: "Listens attentively to my concerns"). Because transfor-mational leadership is a higher order construct comprising con-ceptually distinct yet typically highly intercorrelated scales (Bass,1985; Bass & Avolio, 1993), as was the case in the present study,the four subscales were aggregated to represent the construct oftransformational leadership. The three scales measuring transac-tional leadership were (a) contingent reward (six items; sampleitem: "Gives me positive feedback when I perform well"), (b)active management-by-exception (four items; sample item: "Fo-cuses attention on irregularities, mistakes, exceptions and devia-tions from standards"), and (c) passive management-by-exception(four items; sample item: "Waits for problems to arise beforetaking action"). Direct reports were asked to judge how frequentlytheir leader engaged in the specific behaviors measured by theMLQ, ranging from 0 (not at all) to 4 (frequently, if not always).

LMX. LMX measurement instruments have been continuallychanged over time, and different studies have used different LMXscales (Dansereau, 1995; Gerstner & Day, 1997; Graen & Uhl-Bien, 1995). Gerstner and Day (1997, p. 828) recently observedthat "despite claims of an apparently robust phenomenon (Graen &Uhl-Bien, 1995), there is surprisingly little agreement on whatLMX is or how it should best be measured." Prior to 1995, whenGraen and Uhl-Bien addressed the controversy surrounding themeasurement of the LMX construct and recommended the use ofthe seven-item LMX measure, there was no clear guidance onwhich LMX measure to use. The present study, conducted in early1995, used the four-item Leader-Member Exchange scale origi-nally developed by Graen and Schiemann (1978) and extended andvalidated in subsequent research (e.g., Graen, Liden, & Hoel,1982). Items were rated on 4-point scales. An illustrative sampleitem from the scale is "What are the chances that your leaderwould use his or her power to help you solve problems in yourwork?" in which the scale ranges from 1 (would not) to 4 (certainlywould).

Graen and Scandura (1987) recommended the use of themember-only questionnaire in instances of a one-time measure-ment of the LMX, a condition that characterizes the present study.They argued that leaders are more likely to provide sociallydesirable answers about relationships with their followers (i.e., thatthey treat them all the same) when surveyed on one occasion, thanwhen repeated measures are taken over time.

Physical distance. We used an adaptation of Klauss andBass's (1982) measure of physical distance between direct reportsand their leader. Direct reports were asked to rate their physicalproximity to their leader on a 5-point scale ranging from 1 (veryclose—i.e., same floor, within 100 ft or 30.48 m) and 5 (verydistant—i.e., different city). The vice president of human re-sources for the division verified direct reports' ratings of theirphysical proximity to their respective leaders.

Follower performance. The measure of follower performancerepresented the direct report's overall performance appraisal ratingby his or her leader on a 3-point scale that ranged from 1 (belowexpectations—i.e., performance does not meet the job require-ments with the level of quality expected) to 2 (quality contribu-tion—i.e., performance meets the job requirements with a level ofquality expected of employees), to 3 (exceptional contribution—i.e., performance exceeds the requirements of the position through

excellence in majority of work dimensions). The performanceappraisal rating was based on three components: (a) the accom-plishment of quantitative objectives related to corporate strategicgoals (i.e., financial performance, customer satisfaction, employeeeffectiveness, and company image); (b) the accomplishment ofqualitative objectives specifically related to the community (i.e.,customer service, asset quality, portfolio mix, workplace equality,and personal growth); and (c) personal effectiveness (i.e., manag-ing change, identifying business opportunities, and thinking stra-tegically). The direct report's overall performance appraisal ratingwas determined by the leader's summary assessment of these threecomponents. The performance of each direct report was appraisedby his or her leader on an annual basis.

Control variable. The length of time direct reports reported toa particular leader was used as a control variable in the presentstudy, given empirical evidence that the length of the leader-follower reporting relationship moderates follower performanceevaluations (Duarte, Goodson, & Klich, 1994). Direct reports wereasked to rate on a 6-point scale how long they had worked withtheir leader, ranging from 1 (under 1 year) to 6 (more than 5years).

Data Analysis

Because the fundamental premise underlying the LMX model ofleadership is that unique types of relationships develop betweenleaders and followers, the follower level of analysis was used toanalyze the data in the present study.

The hypotheses were tested using partial least squares (PLS)analysis, a structural equation modeling technique. PLS is appro-priate fortesting predictive research models during the early stagesof theory building, which is appropriate for the present study(Barclay, Higgins, & Thompson, 1995; Fornell & Bookstein,1982). PLS does not make assumptions about data distributions toestimate model parameters, observation independence, or variablemetrics (Faulk & Miller, 1992).

The path coefficients in a PLS structural model are standardizedregression coefficients. The loadings of items on the constructs arefactor loadings. Therefore findings can be interpreted within thecontext of regression and principal-components analysis. Withinthe leadership literature, several recent empirical studies have usedPLS (Howell & Avolio, 1993; Sosik, Avolio, & Kahai, 1997).

To test the hypotheses predicting direct effects of the transfor-mational and transactional leadership and the quality of the leader-follower relationship constructs on follower performance, we as-sessed the paths from the different leadership behavior and LMXconstructs to follower performance concurrently. The hypothe-sized direct paths from the quality of leader-follower relationshipto the different transformational and transactional leadership con-structs were also assessed simultaneously. The moderated modelwas tested by examining the path from the quality of the leader-member relationship construct to follower performance and fromthe transformational and transactional leadership constructs tofollower performance under both physically close and distantconditions. To partition the data, followers who were located in thesame city as their leader were considered close followers, whereasfollowers who were located in a different city from their leaderwere deemed distant followers. In the moderated model, the con-trol variable, the length of the leader-follower reporting relation-

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686 HOWELL AND HALL-MERENDA

ship, was modeled as a direct path to the quality of leader-memberrelationship construct.

PLS tests the specified model separately for each group of cases,similar to more traditional moderated regression analysis. To testthe significance of the moderator variable, physical distance, themodel was analyzed twice. Jackknifed path coefficients and jack-knifed standard errors generated from PLS analysis were calcu-lated initially for close followers and then for distant followers. Anunpaired t test was used to test the significance of the differencesbetween the path coefficients for close versus distant followers(Howell & Avolio, 1993). A p value of .05 was used to testsignificance.

Results

Reliability and Validity of Measures

The measurement model was tested by examining indi-vidual item reliability, internal consistency, and discrimi-nant validity. Individual item reliability was determined byexamining factor loadings of the measures on their associ-ated constructs. In PLS analysis, factor loadings exceeding.70 are acceptable (Fornell, Tellis, & Zinkhan, 1982).

Table 1 summarizes the factor loadings of the leadershipbehavior measures. Factor loadings for contingent reward,active management-by-exception, and passive management-by-exception items were all greater than .70. In addition, theloadings of the individual scales that comprise the higherorder construct, transformational leadership, are also sub-stantially greater than .70.

Table 1Factor Loadings, Weights, and Internal ConsistencyReliabilities (IRCs)

Construct and measure Factor loading Weight of measure IRC

Transformational leadershipCharismaInspirational motivationIntellectual stimulationIndividualized consideration

Contingent reward (CR)CR1CR2CR3CR4CR5CR6

AMBEAMBE1AMBE2AMBE3AMBE4

PMBEPMBE1PMBE2PMBE3PMBE4

.92

.91

.89

.89

.74

.88

.92

.92

.93

.93

.75

.83

.78

.82

.86

.86

.92

.88

.26

.25

.28

.32

.15

.17

.20

.20

.20

.19

.27

.36

.31

.32

.30

.22

.31

.31

.93

.95

.86

.90

Note. AMBE = active management-by-exception; PMBE = passivemanagement-by-exception.

Reliability may also be assessed through a construct'scomposite scale reliability, which is a measure of internalconsistency reliability (Fornell & Larcker, 1981). Fornelland Larcker recommend using a criterion cut-off of .70 ormore. Examination of the composite scale reliabilities forthe leadership behavior measures displayed in Table 1 in-dicates that all of the internal consistency reliabilities for theconstructs are greater than the .70 advocated by Fornell andLarcker (1981).

The reliabilities of the aggregated scales used in thestructural model were also assessed. Because the LMX scalewas entered into the PLS model as a single indicator, it wasnot possible to test its reliability using the method proposedby Fornell and Larcker (1981). Consequently, prior to ag-gregating the scale into a single measure, the scale reliabil-ity was assessed by Cronbach's alpha. Cronbach's alpha forthe LMX scale was .80, which exceeds Nunnally's (1978)criterion of .70.

Discriminant validity of constructs was also assessedusing PLS analysis. Table 2 presents the correlation matrixof the constructs in the model. The elements on the diagonalshow the square root of the average variance extracted bythe constructs from measures. For adequate discriminantvalidity, these elements should be greater than entries in thecorresponding rows and columns (Fornell & Larcker, 1981).A comparison of the variance shared by a construct and itsmeasures to the variance shared between constructs re-vealed adequate discriminant validity among the respectiveleadership constructs. Although the correlation betweentransformational leadership and contingent reward leader-ship is high, previous research indicates that these con-structs are typically highly correlated as transformationalleaders often display contingent reward behaviors as part oftheir behavioral repertoire (Bass & Avolio, 1993).

The intercorrelations among the measures revealed thatLMX was positively correlated with transformational andcontingent reward leadership. As expected, both LMX andtransformational leadership were negatively correlated withactive and passive management-by-exception and positivelycorrelated with follower performance. Physical distancewas not significantly correlated with any of the leadershipor performance measures.

Tests of Hypotheses

Results testing the hypotheses regarding leadership be-haviors, LMX, and follower performance are summarized inFigure 1. Hypothesis 1, which predicted a positive andsignificant relationship between transformational leadershipand follower performance, was not supported (path coeffi-cient = .12, t = 1.37, p > .05). Contrary to Hypothesis 2,contingent reward leadership was not significantly posi-tively related to follower performance (path coefficient =-.03, t = —.34, p > .05). Hypotheses 3a and 3b were not

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Table 2Means, Standard Deviations, and Correlations of Latent Variables

Measure M SD No. of items

1.2.3.4.5.6.7.8.

Leader— member exchange3

Transformational leadershipContingent reward leadershipActive management-by-exceptionPassive management-by-exceptionPerformance"Length of leader-follower relationship2

Distance'

12.362.772.481.240.741.183.553.89

2.690.771.03.0.900.910.431.441.31

424644111

.53*

.45*-.40*-.34*

.24*-.06-.07

(.89).79*

-.41*-.62*

.10*-.04-.02

(.89)-.36*-.49*

.09*-.or

.00

(.78).38*.06.00.03

(.70)-.03 —

.13* .05 —-.05 -.09 .05 —

Note. Items in parentheses represent the square root of the average variance extracted.a For the partial least squares analysis, these measures consisted of one indicator. Therefore, average variance extracted for these measures could not becalculated.*p < .05.

TransformationalLeadership

ContingentReward

Leadership

FollowerPerformance

Active ManagementBy Exception

Passive ManagementBy Exception

Figure 1. Partial least squares analysis of the relationship between leadership behaviors, leader-member exchange (LMX), and follower performance. ** p < .005. *** p < .0005.

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688 HOWELL AND HALL-MERENDA

supported: Active and passive management-by-exceptionwere not significantly negatively related to follower perfor-mance (path coefficients = .15 and -.12, ts = 2.78 and— 1.36, p < .005 and p > .05, respectively). Finally, aspredicted in Hypothesis 7, there was a positive and signif-icant path between LMX and follower performance (pathcoefficient = .34, t = 6.15, p < .0005).

Figure 2 shows the results of tests for the hypothesizedrelationships between LMX and leadership behaviors. Aspredicted in Hypothesis 4, LMX was significantly and pos-itively related to transformational leadership (path coeffi-cient = .54, t = 10.34, p < .0005). Hypothesis 5 was notsupported: Although LMX was significantly and positivelyrelated to contingent reward leadership (path coefficient =.45, t = 6.86, p < . 0005), results of a test of means(Duxbury & Higgins, 1991) indicated that the quality ofleader-member relationships did not have a significantlylower positive relationship with contingent reward leader-ship than with transformational leadership, r(77) = .98, p >

.05. The significant negative paths between LMX and activeand passive management-by-exception support Hypothe-ses 6a and 6b, respectively (path coefficients = -.38 and-.35, ts = -8.48 and -7.46, ps < .0005).

In Hypothesis 8a, we posited that contingent rewardleadership would produce higher follower performancewhen physical distance was close rather than distant. Asshown in Table 3, the opposite result occurred: Contingentreward leadership produced significantly higher followerperformance under distant versus close conditions, t(lT) =—4.96, p < .0005. Hypothesis 8b was supported: Activemanagement-by-exception produced significantly lower fol-lower performance when followers were physically distantrather than close, r(77) = 3.17, p < .005. Contrary toHypothesis 8c, passive management-by-exception producedsignificantly lower follower performance when physicaldistance was close rather than distant, t(ll) = —2.74, p <.005. Hypothesis 8d was not supported: The relationshipbetween LMX and follower performance was not moder-

.54

H4

TransformationalLeadership

ContingentReward

Leadership

Passive ManagementBy Exception

Figure 2. Partial least squares analysis of the relationship between leader-member exchange(LMX) and leadership behaviors. *** p < .0005.

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Table 3Partial Least Squares Analysis of Unmoderated and Moderated Models

Moderated model

Unmoderated model Close Distant

Hypothesis and proposed path

H8a: Contingent reward — > Follower performanceH8b: Active management-by-exception — » Follower performanceH8c: Passive management-by-exception —> Follower performanceH8d: LMX — » Follower performanceH8e: Transformational leadership — » Follower performance

Standardizedpath

coefficient

-.03.15

-.12.34.12

r(316)

-.342.78**

-1.366.14***1.37

Standardizedpath

coefficient

-.13.25

-.41.31.30

1(194)

-1.223.38***

-2.19*3.05**1.91*

Standardizedpath

coefficient

.31

.08-.07

.41-.43

'(121)

2.12*1.11

-.62534***

-2.50*

Note. The Unmoderated model includes all cases across both distance conditions, whereas the moderated model tests the model under the two differentconditions: close (n = 195) and distant (n = 122). The variance explained in follower performance by all transactional, transformational, andleader-member exchange (LMX) measures was 9.3% for the Unmoderated model, 11.6% for the close moderated model, and 11.6% for the distantmoderated model.*p<.05. **p<.005. ***/?<.0005.

ated by physical distance, f(77) = -1.45, p > .05. Inaccordance with Hypothesis 8e, the path between transfor-mational leadership and follower performance was positiveunder physically close versus distant conditions, and thisdifference in path coefficients was significant, ?(77) = 6.17,p < .0005.

The control variable, the length of the leader-followerrelationship, was also entered into the moderated model;however, it was not related to LMX in either the unmoder-ated or moderated model.

Discussion

Our findings extend the validity of LMX and transforma-tional leadership theories in two ways. First, the present studyrepresents the first large-scale attempt to empirically test thelinkages between LMX and transformational leadership mod-els of leadership. This study extends prior research by exam-ining the extent to which different dimensions of leadership areadditively and simultaneously associated with performance.The current research demonstrates that LMX and activemanagement-by-exception each directly and positively predictfollower performance over time and that LMX and transfor-mational and contingent reward leadership are positively re-lated. Second, the inclusion of physical distance as a moderatorof the impact of LMX relationships and transformational lead-ership on predicting follower performance recognizes the roleof organizational context variables in these two leadershipmodels. Our results indicate that although transformationalleadership is significantly more effective in predicting fol-lower performance under close conditions, LMX positivelyaffects follower performance irrespective of physical distance.Thus, although LMX is positively related to transformationalleadership, these two constructs are differentially related tofollower performance under geographically close and distantconditions.

The current study provides support for Graen and Uhl-Bien's (1995) assertion that high-quality leader-followerrelationships are positively associated with transformationalleadership behaviors. Similar results were reported byDeluga (1992), who found a significant relationship be-tween the transformational leadership behaviors of charismaand individualized consideration and high-quality LMXamong 145 U.S. Navy officers. Thus, the present studycontributes to the extant leadership literature by supportingthe idea that transformational leadership may merge withthe formation of high-quality relationships in a mutuallyreinforcing way (Deluga, 1992).

As predicted, there were significant negative paths be-tween LMX and active and passive management-by-exception. This finding supports the characterization oflower quality relationships as unidirectional downward in-fluence, formal role-defined relation situations in whichleadership is essentially nonexistent (Graen & Uhl-Bien,1995). Also, although higher quality LMX was positivelyrelated to contingent reward leadership, LMX did not havea significantly lower positive relationship with contingentreward leadership than with transformational leadership.Because contingent reward leaders share expectations abouttheir own job, the followers' job, and their working rela-tionship (Gerstner & Day, 1997, p. 839), they may contrib-ute positively to the quality of leader-member relationships,albeit in a different way than transformational leaders.

Our findings suggest that Graen and Uhl-Bien's (1995)notion that transactional leadership is associated with lowerquality exchanges needs to be revised. In particular, itis important to differentiate the two types of trans-actional leadership, contingent reward and management-by-exception, according to the leader's activity level and natureof interactions with followers. Leaders who practice con-tingent reward, which represents a positive, constructive

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690 HOWELL AND HALL-MERENDA

transaction between leaders and followers in which follow-ers are rewarded or recognized for achieving agreed onobjectives, may also engage in higher quality dyadic rela-tionships. In contrast, leaders who engage in active andpassive management-by-exception with followers, a correc-tive transaction that emphasizes negative feedback and re-inforcement rather than the positive reinforcement usedwith contingent reward leadership, may have lower qualityof relationships with their followers, as suggested by Graenand Uhl-Bien (1995).

The significant positive relationship between LMX andfollower performance established in the present study isconsistent with prior research (Graen, Novak, & Som-merkamp, 1982; Liden & Graen, 1980; Liden et al., 1993;Scandura & Schriesheim, 1994; Wayne et al., 1997). Thisdemonstration of LMX as a significant predictor of followerperformance provides empirical support for Graen and Uhl-Bien's (1995) contention that leaders should provide all oftheir followers with the opportunity to develop high-qualityleader-follower relationships. Such relationships would, ac-cording to our results, lead directly to higher levels offollower performance.

Our examination of the extent to which different dimen-sions of leadership were additively and simultaneously as-sociated with performance indicated that although bothLMX and transformational leadership were positively re-lated to follower performance, the path from transforma-tional leadership to performance failed to reach statisticalsignificance when other leader behaviors and LMX wereincluded in the model. This finding is contrary to priorresearch that has consistently demonstrated positive associ-ations between transformational leadership and perfor-mance. One possible explanation for these results is thatdespite the demonstrated discriminant validity between theLMX and transformational leadership constructs, the signif-icant correlation between them may have attenuated therelationship between transformational leadership and per-formance. An alternative explanation, discussed below, isthat LMX and transformational leadership are differentiallyrelated to performance when physical distance is includedas a moderator in the analysis.

Results of the present study also demonstrate that therelationships between transformational, contingent reward,and active and passive management-by-exception leader-ship and follower performance were moderated by physicaldistance. This link has not been made in previous work ontransformational leadership. The results show that transfor-mational leaders produce higher follower performance inclose versus distant situations, as suggested by Shamir's(1995) findings related to charisma and social distance.These findings imply that transformational leaders requirephysical proximity to followers in order to attend to thedifferential development needs of followers, to encouragethem to invent novel solutions to problems, and to commu-

nicate a sense of mission and excitement. The results alsoimply that passive management-by-exception is signifi-cantly more detrimental to follower performance at closerange than at a distance. Contrary to our expectations, itappears that physical proximity exposes followers to per-ceived arbitrary punishment, which negatively affects theirjob performance. A possible explanation for this findingmay lie in the nature of passive management-by-exceptionleadership. Because physical distance precludes personalinteractions with followers, leaders who passively wait forproblems to arise before taking corrective action may haveto wait much longer to observe distant followers' perfor-mance problems, if, indeed, these problems ever becomeapparent. This implies that distant followers may perceiveless arbitrary punishment and at least partially avoid thenegative impact that perceived arbitrary punishment has onperformance.

Interestingly, LMX positively affected follower perfor-mance, irrespective of physical distance, implying that apositive leader-follower relationship will make leadingfrom a distance both possible and effective. Moreover,inspection of the size of the path coefficients from LMX toclose and distant follower performance, where the relation-ship between distant leaders and followers had a largerimpact on follower performance than that of physicallyclose leaders and followers, suggests that distance maymake the heart grow fonder, or the follower perform at ahighef level. The internalization of common goals, as wellas the mutual trust, respect, and obligation that characterizeshigh-quality leader-follower exchanges (Graen & Uhl-Bien, 1995; Liden & Graen, 1980) may enable followers totranscend geographic distance in pursuit of the unit's mis-sion and goals. Thus the results of the present study bringinto question Graen and Uhl-Bien's (1995) contention thathigh-quality LMX relationships require direct personal in-teraction to be developed, nurtured and sustained.

The strong positive path between active management-by-exception and follower performance when the leaderis physically proximate to the follower lends support to otherleadership scholars' assertion that management-by-exceptionmay increase performance levels if the leader clarifies perfor-mance standards, continuously monitors followers' perfor-mance to anticipate mistakes before they become a problem,and immediately takes corrective action when required (Bass,1985; Greene, 1976; Podsakoff et al., 1984). In fact, Bass andAvolio (1990) reported positive correlations betweenmanagement-by-exception and organizational effectiveness,especially for active management-by-exception.

We speculate that the positive results of activemanagement-by-exception may also stem from the compa-ny's culture, which has historically accepted correction ofemployees' behavior as an exemplary leadership practice, apractice that establishes and enforces performance stan-dards. Anecdotal evidence gleaned from interviews with

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company executives as well as recent theoretical develop-ments (Napier & Ferris, 1993) suggest that physically closefollowers may be subject to higher expectations and morepressure because their leader is able to observe and monitortheir performance more frequently and to note errors andslippage below standards more easily than distant followers.This evidence suggests the potential for effective activemanagement-by-exception of spatially proximate followers,at least in the present organizational context.

One limitation of the present study is that LMX wasmeasured from the followers' perspective only. In theirrecent meta-analysis of LMX research, Gerstner and Day(1997) recommended that future research should measureLMX from both leader and follower viewpoints and exam-ine leader-follower agreement as a relevant independent ordependent variable. However, in the present study we wereconcerned that the leader-performance correlations might beconfounded by same-source bias and their resulting effectsize estimate overstated, a conclusion also reached by Ger-stner and Day (1997). Accordingly, our results represent aconservative test of the hypotheses because LMX and per-formance ratings were provided by different sources.

Another limitation of this study is that we do not knowhow long the actual relationships between the leaders andfollowers are. We have data on how long each follower hasreported to each leader in their current position; however,we do not know about relationships that predate the currentposition. It is possible that some of these relationships aresignificantly longer than the data suggest. Future researchneeds to clarify how much "up-close and personal" time isrequired for building and maintaining high-quality leader-follower relationships.

The direction of causality represents another limitation ofthe present study. Although we conducted a longitudinalstudy in which leader behaviors and follower performancewere measured 1 year apart, the presence of this intervaldoes not obviate questions about the causal direction under-lying the results. It is possible that follower performancecould influence leader behavior, particularly if the relation-ship is an extended one. Thus the results of the present studyare vulnerable to the possibility of opposite or bi-directionalcausal explanations due to prior acquaintance between lead-ers and followers. Future research should be designed usingnewly established leader-follower reporting relationships inorder to more accurately assess the direction of causality.

Although the results indicate that LMX does not have asignificantly lower relationship with contingent rewardleadership than with transformational leadership, limitationsin our methodology mitigate against drawing such a con-clusion. According to Cooper and Richardson (1986), inorder to conduct a fair comparison of the relative strength ofthe contingent reward and transformational leadership con-structs, procedural and distributional equivalence of themeasures of the constructs need to be demonstrated. Differ-

ences in the number of items measuring the transforma-tional and contingent reward constructs, variations in themeans and standard deviations for these measures fromthose reported in other studies (e.g., Bass & Avolio, 1990;Lowe et al., 1996), as well as other considerations suggestthat procedural and distributional equivalence may be sig-nificant issues in the present study. Future research designedto test the augmentation hypothesis of transformational andcontingent reward leadership (Bass, 1985) and the poten-tially different relationships between LMX and variousleadership behaviors needs to ensure both procedural anddistributional equivalence of the leadership measures.

The present study's leader sample was predominantlymale (95%). Given that female managers are viewed byfollowers as more proactive role models who are trusted andrespected and who demonstrate greater sensitivity to andinterest in followers' needs in comparison with their malecounterparts (Bass & Avolio, 1994), it would be interestingto conduct the analysis split on gender. Unfortunately, hav-ing so few female leaders in our sample mitigated againstthis type of analysis. Replicating the present study in anenvironment in which there is a more even distribution ofroles by gender would allow for this interesting comparison.

Finally, we have only anecdotal data regarding charac-teristics of close and distant followers and survey dataregarding leader behaviors. Observational data on thesecharacteristics, as recommended by Hunt (1991), wouldenrich our understanding of the dynamics of leader-follower relationships and the role of transformational lead-ership behaviors in that process.

Future research is necessary to test whether the presentstudy's findings apply to multiple levels of analysis (Danse-reau, Yammarino, & Markham, 1995) and generalize toother organizational settings, industries and cultures. Inaddition, investigation of a wider array of individual vari-ables (e.g., follower autonomy and self-efficacy) and con-textual variables (e.g., resource availability and goal clarity)that may influence the leader-follower relationship shouldbe pursued. Finally, collecting data over multiple time pe-riods would allow researchers to trace the evolution ofleader-follower relationships. An understanding of the de-velopment of leader-follower relationships and leadershipstyle would provide insights into the career developmentexperiences and training needs of leaders and the timing ofthese experiences.

This study also opens an avenue for the development andtesting of theory regarding the potential moderating effectsof contextual variables, such as physical distance, on therelationship between LMX and the various leadership be-haviors. We suspect that physical distance would moderatethose relationships, as it does the LMX-follower perfor-mance relationship, and that such hypothesis developmentand empirical testing would further enlighten our under-

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692 HOWELL AND HALL-MERENDA

standing of how effective leaders deal with the distancefactor.

In summary, our study represents the first attempt tointegrate the transformational and LMX models of leader-ship over the full range of leadership behaviors. We ex-tended the work of transformational scholars (e.g., Bass,1985; Hater & Bass, 1988) and LMX scholars (e.g., Deluga,1992; Graen & Cashman, 1975; Graen & Uhl-Bien, 1995)by integrating the models in a longitudinal design and byadding a contextual factor in order to add richness to ourunderstanding of the predictors of follower performance.Finally, we have provided further evidence that the qualityof the leader-follower relationship has a strong, positiveimpact on follower performance. Five years ago, Bass andAvolio (1993, p. 75) commented that "we have onlyscratched the surface in terms of connecting the model oftransformational leadership to other [leadership] models."We hope this study has gone beneath the surface to illumi-nate the linkages between LMX, transformational leader-ship, distance, and performance.

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Received March 17, 1998Revision received November 5, 1998

Accepted November 9, 1998 •

Call for Nominations

The Publications and Communications Board has opened nominations for theeditorships of Behavioral Neuroscience, JEP: Applied, JEP: General, Psychologi-cal Methods, andNeuropsychology for the years 2002-2007. Michela Gallagher, PhD;Raymond S. Nickerson, PhD; Nora S. Newcombe, PhD; Mark I. Appelbaum, PhD; andLaird S. Cermak, PhD, respectively, are the incumbent editors.

Candidates should be members of APA and should be available to start receivingmanuscripts in early 2001 to prepare for issues published in 2002. Please note that theP&C Board encourages participation by members of underrepresented groups in thepublication process and would particularly welcome such nominees. Self-nominationsare also encouraged.

To nominate candidates, prepare a statement of one page or less in support of eachcandidate. The search chairs are as follows:

• Joe L. Martinez, Jr., PhD, for Behavioral Neuroscience• Lauren B. Resnick, PhD, and Margaret B. Spencer, PhD, for JEP: Applied• Sara B. Kiesler, PhD, for JEP: General• LyleE. Bourne, Jr., PhD, for Psychological Methods• Lucia A. Gilbert, PhD, for Neuropsychology

Address all nominations to the appropriate search committee at the followingaddress:

[Name of journal] Search Committeec/o Karen Sellman, P&C Board Search LiaisonRoom 2004American Psychological Association750 First Street, NEWashington, DC 20002-4242

The first review of nominations will begin December 6,1999.