Chapter 9: Examining The Relative Importance of Leader– Member Exchange on Group Performance Over Time

Despite its roots as a group-level construct, research in leader–member exchange (LMX) has typically focused on individual-level predictors and outcomes of LMX (Gerstner & Day, 1997). In particular, only a few studies have examined the impact of group LMX on group performance (e.g., Graen, Hui, & Taylor, 2004, 2006; Liden, Erdogan, Wayne, & Sparrowe, 2006). This lack of research attention is of concern given that examining LMX at the group level is both theoretically appropriate (Graen, 1976) and practical given the importance of team performance and team leadership in organizations (Graen et al., 2004; O’Neil, Allerd, & Baker, 1997; Zedeck & Goldstein, 2000). Moreover, understanding the development of any relationship, including those between leaders and followers, requires at least some attention to the role of time (Mitchell & James, 2001). This too has been closely examined in the LMX research (Graen, 2003). However, most of the work that does exist on the role of time in LMX relationships has been conducted solely at the individual or dyadic and within or between team levels of analysis (e.g., Bauer & Green, 1996; Bauer, Erdogan, Liden, & Wayne, 2006; Graen, 2003; Liden, Wayne, & Stilwell, 1993). Our focus in this chapter is the importance of group LMX and leader ability during the formation of new project teams as a predictor of team performance and team development. In the following sections, we review the extant literature on LMX and performance and describe previously published data that we used to examine the relationships of group LMX with group performance and development at different points in the life cycle of product development teams.