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Moderation and Mediation Effects of Distance on the Leader-Follower Relationship

As the world rapidly changes due to globalization alongside technological transformation, resulting in increased organizational geographic dispersion, transformational leadership seems to suit today’s requirements of effective leadership (Lowe et al., 1996). Especially in an unstable and turbulent environment, transformational leadership shows benefits of supplying confidence and optimism in followers by an almost heroic leading figure (Furtner & Baldegger, 2013). In cases where charismatic leaders are suddenly separated from their subordinates and communication becomes primarily available via AIT, it is unclear whether the leaders can still yield the same level of subordinate performance. Empirical evidence shows that distance can indeed moderate the impact of leadership behavior on follower performance (e.g., Avolio et al., 2004; Howell et al., 2005) and thus, traditional leadership requires further investigation in the context of a distant environment.

The influence of self-leadership in a physically distant environment has received inadequate academic attention. Andressen and colleagues (2012) were the first, to wit, to incorporate self-leadership into a recent investigation of a virtual work context. The authors assessed the role of self-leadership in the leadership/work outcome relationship, finding that self-leadership acted as a process factor for determining the motivation of followers. More importantly, virtuality was found to moderate the relationship between transformational leadership and self-leadership. The findings indicate that follower self-leadership is less strongly predicted by transformational leadership when leader-follower distance is high.

Hypothesis 2.1:

Physical distance negatively moderates the influence of leadership behavior on follower self-leadership strategies.

Similar to its moderating effects on the leadership/self-leadership relationship, physical distance is also expected to have a moderating effect on the influence of leadership on followers’ performance. Indications for that assumption are provided by Howell and Hall-Merenda (1999). It was found that relationships between leadership behavior (transformational, contingent reward, MBEa, and MBEp) and follower performance were moderated by physical distance. Transformational leadership was found to be more effective in predicting performance under close conditions. Conversely, contingent reward leadership predicted follower performance under distant conditions. Active management-by-exception led to lower performance under distant conditions, whereas passive management-by-exception resulted in a decrease in performance under close conditions. Similar outcomes were published by Howell et al. (2005). The researchers revealed that under distant conditions, transformational leadership failed to predict business unit performance. For contingent reward leadership the opposite occurred; under close conditions, contingent reward leadership did not predict business unit performance. However, in distant leader-follower relationships, contingent reward predicted business unit performance.

Hypothesis 2.2:

Physical distance negatively moderates the influence of leadership behavior on follower performance.

Since one of the first investigations in this area by Howell and Hall-Merenda (1999), research looked at distance leadership with more differentiated eyes. Rather than focusing solely on the geographical aspect of leadership at a distance, academic work came to recognize the importance of establishing high quality relationships. Research covering leader-member exchange theory while exploring a physically distant leader-follower engagement has therefore recently gained attraction (e.g., Eichenberg, 2007; Kacmar et al., 2003). Schyns (2013, p. 140) proposes that it may be more difficult to establish and maintain high quality relationships if leader- follower physical distance is high.

Hypothesis 2.3:

Physical distance does show negative effects on the quality of relationship.

One of the first investigations on relationship quality to take virtuality into account was pursued by Golden and Veiga (2008). Summarizing their work, the authors discovered virtuality to be influential on the relationship between LMX and commitment, job satisfaction, and job performance. Team members in high quality LMX relationships revealed a high degree of commitment when working virtually. Members in less-established relationships thus showed less commitment when they were working in virtual mode. Similarly, job satisfaction was highest when subordinates were working frequently virtually and had well-established relationships. Limitations of high quality relationships resulted in a decrease of followers’ job satisfaction. Testing for the influence of virtuality on the LMX/job performance linkage, it was discovered that LMX - on all levels - was more positively associated with individual performance when jobs were performed virtually. Assessing mediating effects of LMX on the influence of leadership behavior on work-related outcomes, Wang et al. (2005) discovered that LMX fully mediated the effects of transformational leadership on performance. The researchers interpreted the outcome to reveal that LMX makes transformational leadership meaningful to subordinates (Wang et al., 2005, pp. 429). Carter et al. (2009) assumed LMX to be equally mediating the relationship between transformational leadership and follower job performance. The results indicated that both, LMX and interactional justice mutually mediated this relationship. When regarded alone, LMX still acted as mediator. Transformational leadership stimulated LMX, while the quality of LMX positively affected job performance.

Hypothesis 2.4:

Relationship quality mediates the influence of leadership behavior on follower performance.

Working together at physical distance increases the need for interaction through different media channels. Advances in technology have the potential to substitute for missing face-to-face communication and enhance workplace collaboration even in the context of dispersion (Duarte & Snyder, 1999). Yet, geographical dispersion does not have to impede interaction. A study by Neufeld et al. (2010) found that physical distance does not necessarily have a negative effect on leadership or communication. The key to leadership effectiveness rather seemed to lie in communication. The researchers discovered communication to have mediating effects on both transformational and contingent reward leadership on leader performance. Since both leader archetypes are perceived as good communicators, the combination of both behaviors positively influenced follower performance. The authors conclude that without effective communication, leadership becomes irrelevant, particularly under conditions of physical distance (Neufeld et al., 2010).

The use of digital media facilitates communication although it does not make the entire work process visual. Therefore, special attention has to be paid to loafing team members, whereas communicating the quality of their work might be difficult for others (Bradner & Mark, 2008, p. 67). Compared to face-to-face teams, computer-mediated groups are also more likely to feel ignored, while face-to-face teams consider themselves more influential than virtual teams (Thompson & Coovert, 2002). If technological support is lacking, the feeling may arise that virtual teamwork is too complicated (Horwitz et al., 2006).

Kacmar and colleagues (2003) studied the effect of LMX and communication frequency on performance ratings by supervisors. The researchers found that communication frequency moderated the relationship between LMX and job performance ratings. For followers who reported frequent interaction with their supervisors, LMX was more strongly related to positive performance outcomes. For infrequent communication, the relationship was found to be weak. When LMX quality was low, frequent interaction led to unfavorable performance ratings, whereas infrequent leader-follower interaction led to higher performance ratings. Those followers who communicated frequently with their managers received the highest job performance ratings while those communicating infrequently received unfavorable ratings. Another investigation by Patrashkova and McComb (2004) found that per?formance improved with the degree of communication up to a certain level, after which it remained stable.

Hypothesis 2.5:

Interaction frequency positively moderates the influence of transformational leadership and transactional leadership behavior on follower performance.

Chapter summary

Eight hypotheses are analyzed in this work. The first section is concerned with three propositions examining direct effects of Full Range Leadership behavior on the work-related outcomes of self-leadership and performance. The second sequence, containing five hypotheses, studies moderation effects of physical distance and interaction frequency as well as mediation effects of relationship quality. Research methodology and test procedures are outlined in the following chapter.

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