A multilevel study of group‐focused and individual‐focused transformational leadership, social exchange relationships, and performance in teams

• Date: 01 April 2016
• Published date: 01 April 2016
• Author: John J. Sosik,Kyoungmin Cho,Jae Uk Chun
• DOI: http://doi.org/10.1002/job.2048

A multilevel study of group-focused and

individual-focused transformational leadership,

social exchange relationships, and performance in

teams

JAE UK CHUN

1

*, KYOUNGMIN CHO

2

AND JOHN J. SOSIK

3

1

Korea University Business School, Korea University, Seoul, Korea

2

Michael G. Foster School of Business, University of Washington, Seattle, Washington, U.S.A.

3

School of Graduate Professional Studies, The Pennsylvania State University, Malvern, Pennsylvania, U.S.A.

Summary Using matched reports from 73 team leaders and 359 of their members across 23 companies in Korea, we ex-

amined a multilevel model where group- and individual-focused transformational leadership and their influ-

ence processes operate at the team and dyadic levels independently and interactively to be associated with

team and member performance. Results indicated that group-focused transformational leadership was posi-

tively associated with team performance through team member exchange (TMX), whereas individual-

focused transformational leadership positively related to team members’in-role and extra-role performance

through leader–member exchange (LMX). TMX not only positively mediated the relationships between

group-focused transformational leadership and member performance after controlling for LMX but also

positively moderated LMX–performance relationships. Moreover, the indirect effect of individual-focused

transformational leadership through LMX on member performance was contingent upon the level of TMX.

Theoretical and applied implications are discussed. Copyright © 2015 John Wiley & Sons, Ltd.

Keywords: group-focused and individual-focused transformational leadership; team member exchange;

leader–member exchange; multilevel research

Transformational leadership (TFL) has been one of the most actively studied topics of leadership with respect to its

potential to facilitate high levels of individual, team, and organizational performance (Bass, 2008; van Knippenberg

& Sitkin, 2013). Most prior studies, however, have treated it as an overarching construct despite its multidimen-

sional nature and thus failed to identify how each of its dimensions may have distinct influence processes and effects

(van Knippenberg & Sitkin, 2013). Such a distinction as, for example, the group- and individual-focused dimensions

of TFL is critical, as it helps identify how team leaders effectively manage both individual members and the team of

members to enhance team effectiveness. The benefit of uncovering the underlying processes and effects is evident, in

that a key challenge for team leaders is to create a team setting where members individually responsible for their own

work are willing to collaborate for common goals (Kozlowski & Bell, 2013; Zaccaro, Heinen, & Shuffler, 2009).

The simultaneous emphasis on both individual members and the team as a whole (e.g., the dual effects of TFL: Kark

& Shamir, 2002), however, raises an important issue of potential trade-offs between leading individuals and leading

a team (Chen & Kanfer, 2006). Addressing this issue may require answering two questions: what the distinct under-

lying influence processes of the two forms of leadership are and how one form of the influence processes interacts

with the other. This study focused on addressing these questions to validate the dual effects of TFL.

A few recent studies of TFL attempted to demonstrate the dual effects of TFL that a team leader can display both

group- and individual-focused leadership simultaneously to promote team and individual performance. For example,

*Correspondence to: Jae Uk Chun, Korea University Business School, Korea University, Anam-Dong, Seongbuk-Gu, Seoul, 136-701, Korea.

E-mail: juchun@korea.ac.kr

Copyright © 2015 John Wiley & Sons, Ltd.

Received 19 February 2014

Revised 13 July 2015, Accepted 20 July 2015

Journal of Organizational Behavior, J. Organiz. Behav. 37, 374–396 (2016)

Published online 18 August 2015 in Wiley Online Library (wileyonlinelibrary.com) DOI: 10.1002/job.2048

Research Article

Wang and Howell (2010, 2012) found (in)direct effects of group-focused and individual-focused TFL (through

group and leader identification) on group and individual performance, respectively. However, findings of such main

effects alone are not sufficient enough to ascertain the dual effects of TFL, because it is unknown how the two forms

of influence processes interact to amplify or attenuate the other’s positive effect. Specifically, a compensatory inter-

action indicates that it may be acceptable for a leader to prioritize one form of TFL and its influence process, insofar

as one substitutes for the other. This either-or proposition implies that the dual effects of TFL are limited. Contrarily,

an augmentative interaction suggests that the dual effects of TFL are valid and necessary, because one amplifies the

other’s positive effect. Thus, exploring the interaction pattern as well as identifying the distinct influence processes

of group- and individual-focused TFL is essential to validate the dual effects of TFL, yet this topic has not been sub-

ject to empirical scrutiny. To advance this line of research, the current study is grounded in the dual effects of TFL

(Kark & Shamir, 2002), in which group- and individual-focused TFL are distinguished. To explore the influence

processes of such leadership, this study also builds on the social exchange literature specific to member–member

(team member exchange (TMX): Seers, 1989) and leader–member (leader–member exchange (LMX): Graen &

Uhl-Bien, 1995) relationships.

Figure 1 presents this study’s multilevel research model. Two salient workplace linkages in a team are TMX and

LMX relationships (Cole, Schaninger, & Harris, 2002). Because linking leader behavior to member responses is

based on the quality of such relationships (Dulebohn, Bommer, Liden, Brouer, & Ferris, 2012; Uhl-Bien, 2006),

these social exchanges serve as mediators in the leadership process (Cropanzano & Mitchell, 2005). Team leaders

are required to effectively manage the two interwoven leader–member and member–member relationships

(Kozlowski & Bell, 2013), as a transformational leader interacts with each member to utilize the strengths of indi-

vidual members and catalyzes interaction among members to align them for coordinated action (Kark & Shamir,

2002). Prior studies (e.g., Wang & Howell, 2012; Wu, Tsui, & Kinicki, 2010) may not tap into the relational nature

of TFL, because the follower self-concepts (e.g., group and leader identification) examined in those studies merely

reflect how members define themselves and do not describe the interactional dynamics in such social exchanges

(Uhl-Bien, 2006). To better capture the relational properties, we examined whether group-focused and individual-

focused TFL positively related to team and member performance through TMX and LMX in a parallel manner.

We then examined a cross-level mediation model, whereby TMX mediates the relationship between group-

focused TFL and member performance, because a team leader is an authorized social architect who not only exerts

vertical influence on individual members but also indirectly affects them by facilitating horizontal peer relations

(Kozlowski & Bell, 2013; Zaccaro et al., 2009). Finally, we investigated a cross-level interaction effect of TMX with

LMX on member performance, which has not been examined despite a consistent call for exploring the potential for

and the pattern of the interaction among social exchange relationships (e.g., Cole et al., 2002; Cropanzano &

Mitchell, 2005; Dulebohn et al., 2012). By integrating this interaction with the lower level mediation, we tested a

cross-level moderated mediation, whereby the indirect effects of individual-focused TFL (via LMX) on member

Figure 1. A multilevel model of group-focused and individual-focused transformational leadership

GROUP- AND INDIVIDUAL-FOCUSED LEADERSHIP 375

Copyright © 2015 John Wiley & Sons, Ltd. J. Organiz. Behav. 37, 374–396 (2016)

DOI: 10.1002/job