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The consequences of differentiated leadership

in team settings

Student: Viltaute Aleksockyte

Student number: 10258507

Track: BSc Business administration

Supervisor: Claudia Buengeler

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Statement of originality

This document is written by student Viltaute Aleksockyte who declares to take

full responsibility for the contents of this document.

I declare that the text and the work presented in this document is original and

that no sources other than those mentioned in the text and its references have

been used in creating it.

The Faculty of Economics and Business is responsible solely for the

supervision of completion of the work, not for the contents.

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Table of Contents

Abstract... 4

1. Introduction ... 5

2. Theoretical background and hypotheses ... 6

2.1 Leadership ... 6

2.2 Effectiveness... 7

2.3 Leadership and effectiveness... 8

3. Methodology ... 10 3.1 Research design... 10 3.2 Collection of data ... 10 3.3 Coding ... 11 4. Results ... 12 4.1 Sample... 12 4.2 Differentiation measures ... 15

4.3 Differentiation effect on performance dimension of effectiveness ... 16

4.4 Differentiation effect on members attitudes dimension of effectiveness ... 24

4.5 Differentiation effect on behavioral outcomes dimension of effectiveness... 29

4.6 Other findings ... 32

4.7 Summary ... 34

5. Discussion, limitations and suggestions for future studies ... 34

5.1 Discussion ... 34

5.2 Limitations and suggestions for future studies ... 36

5.3 Conclusion ... 36

6. References ... 38

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Abstract

Leader differentiation among members is a current pheno mena that researchers concentrate on. There a number of studies that investigate the relationship between differentiation and outcomes. However, there is a gap in research that looks at a big amount of outcomes at once in order to find whether differentiat ion affects team and individual effectiveness positively or negatively. This research that was based on systematic literature review looks at various published papers to summarize what kind of outcomes differentiated leadership influences and what kind of effect it is. The study has provided with 39 articles that include group and individual level outcomes that are related with effectiveness. The research has found more positive effects of differentiation on outcomes rather than negative. Individual outcomes related more positively with differentiation rather than group outcomes, because individuals tended to receive more benefits if they were more favorably differentiated. It was also found that differentiation has different influences on the same outcomes due to different moderator and mediator effects.

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1. Introduction

Teams are important to organizational effectiveness. Firms rely on teams in order to produce ideas to boost their own business performance (Sivasubramaniam, Liebowitz & Lackman, 2012). Strong team culture and relationships foster a group’s effectiveness, therefore, monitoring the team’s functioning is important (Kunze & Leicht-Deobald, 2014). Cohen and Bailey (1997) introduce group effectiveness as complex entity that depends on various aspects: task, group size, external factors, environment, internal communication and others. Leaders are one of the factors presented by Cohen and Bailey (1997) as well, because leaders are mostly considered as the ones capable of creating an inspiring climate in the team and lead it to successful results. Therefore, leaders and their leadership play an important role in the organizations (Den Hartog & Koopman, 2001). Den Hartog and Koopman (2001) claim that the effectiveness of the leaders depends on their leadership style. The latter and supervisors’ behavior towards employees can influence team settings from performance to the attachment to the company (Cohen & Bailey, 1997). Some leaders choose to focus on the group as a whole and others treat team members individually. This leads to a concept – differentiated leadership - when leader of the group starts treating his/her individual members of the team differently – not equally.

Reasons can be found for why leadership differentiation can be effective. O ne of the reasons is that some members of the team participate better than the others and some leaders may see value in paying more attention to over-performing employee in order to increase group results. Furthermore, the leader tends to distinguish members according to their personality traits (Benoliel & Somech, 2014) and in such case he/she might start paying more attention to extroverts and leave introverts with less attention, because on the whole it is a win-win outcome. Lastly, differentiation gives an opportunity for the team members to learn from each others’ diverse capabilities and exploit member variety benefits for collective performance (K unze & Leicht-Deobald, 2014).

However, there are also arguments pointing to the potential negative effects of differentiated leadership. There is a potential decrease in team effectiveness, because differentiation may lower group collectiveness (Wu, Tsui & K inicki, 2010). When differentiation occurs, members of the team become less devoted to the company (K unze, de Jong & Bruch, 2013) which may affect company’s performance. In addition to that, differentiation among team members increase competition and uncertainty feelings (Biemann, Kearney & Marggraf, 2015) which could lead to lower job satisfaction or even withdrawal.

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6 | P a g e To sum up, arguments can be made in favor as well as against the value of differentiation for teams. This is also reflected in the empirical researches on differentiated leadership: whereas some studies find positive effects, others show negative effects. There is a need of an explicit review over past empirical research on this topic. With regards to this statement I am going to conduct a systematic literature review of the existent research on the effects of differentiated leadership on relevant outcomes at the team- and the individual level. Differentiation topic is going to be investigated using literature review, in order to find and summarize the outcomes and effect on them initiated by differentiation. The research is going to contribute to the existing literature by providing a review over existing literature in order to find out what impact differentiated leadership has for teams and individuals working in them. This is going to help answer the question what consequences of differentiated leadership are in team settings.

2. Theoretical background and hypotheses

2.1 Leadership:

Graen and Uhl-Bien (1995) define leadership through follower, leader and relationship settings. Leadership is relationship between follower and leader (Graen & Uhl-Bien, 1995). The following section discuss relationships between leader and member.

2.1.1 LMX

Leader- member exchange is defined as leaders creating individual relationship with subordinates (Graen & Scandura, 1987). Le Blanc & Gonzalez-Roma (2012) discuss in their article that there can be high and low level of leader- member-exchange relationships. This concept leads to the differentiation phenomena when the leader creates different relationships with team members. Such differentiation may affect team and individual performances and commitment (Le Blanc & Gonzalez-Roma, 2012). Graen and Uhl- Bien (1995) finds support in differentiating leader- member exchange to achieve better individual, team and organizational outcomes and to develop deeper relationships betwee n leader and member. Henderson et. al (2009) introduce a number of factors that may influence a relationship between LMX differentiation and outcome. Henderson et. al (2009) main idea is that LMX differentiation does not always have a straightforward influence on outcome. Henderson et. al (2009) propositions state that differentiated LMX affect subordinates fairness perceptions,

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7 | P a g e task interdependence and subordinates ratings of leader behaviours. In addition to that, Henderson et. al (2009) have proposed tha t differentiated LMX moderates the relationship between LMX and subordinate outcomes.

2.1.2 Transformational leadership

Transformational leadership goal is to determine the needed change and inspire workers to perform greatly (Den Hartog & Koopman, 2001). It is a change- focused leadership style. Transformational leadership consists of four dimensions: 1) charisma, 2) inspirational motivation, 3) intellectual simulation and 4) individualized consideration (Bass, 1985). The last dimension definition include s the leader distinguishing between individual team members strengths and needs (Bass, 1985), which leads to a differentiation in the team setting. Individualized consideration allows the leader to address the needs of every subordinate, whereas intellectual stimulation helps to access and improve each member’s capabilities to increase individual and group performance. In addition to that the leader also has to differentiate among the members in order to intellectually stimulate them as members require different method of stimulation (Wang & Howell, 2010).

Transformational leadership is usually separated into group- focused and individual-focused leadership. The need for separation lies in the fact that methods to affect and make change in teams and individuals are different (Podsakoff et. al, 1990). Group- focused leadership relies on speeches, inspiration (Kark & Shamir, 2012). However, individual-focused leadership can make a change by acknowledging diverse capabilities of members and finding a way to use those capabilities for a collective benefit through individualized consideration and intellectual stimulation (Kark & Shamir, 2012). Leader- member exchange is a key in individual- focused leadership setting.

2.2 Effectiveness:

Leadership and effectiveness are two separate entities. However, in recent past researchers started connecting both of them to see what influence leadership has on group and individual effectiveness (Wu, Tsui and K inicki, 2010). Cohen and Bailey (1997) have expanded the definition of effectiveness and presented three major dimensions that help to assess effectiveness: performance, member attitudes and behavioural outcomes. Performance based effectiveness is related with efficiency, productivity, quality and innovation (Cohen & Baley, 1997). The next dimension is more individualistic one as it relates with members’

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8 | P a g e satisfaction, commitment to the company and the team, and employees’ trust in management (Cohen & Bailey, 1997). The behavioural dimension is mainly related with outcomes that come from employee and leader behaviours that may include absenteeism and turnover (Cohen & Bailey, 1997).

Ilgen et. al (2004) introduces input-process-output framework as team effectiveness predictor and with a help of the framework introduces some var iables affecting effectiveness. To begin with, team potency is member’s collective belief that they can be effective and was found as a measure of self-effectiveness (Guzzo et. al, 1993; Campion et. al). Task cohesion is also important to group effectiveness as it mediates relationship between collective efficacy and group effectiveness (Ilgen et. al, 2004). In addition to member’s belief in their effectiveness, they also have to have trust in their members as it influences team shared vision and knowledge sharing and these settings mediate higher group effectiveness.

Ilgen et. al (2004) emphasizes the benefit of understanding each members unique capability and initiating learning from minority or best team member. Being different and leader initiations of idea sharing have a positive effect on team effectiveness due to higher performance and on individual effectiveness due to higher sense of inclusion (Ilgen et. al, 2004).

All in all, team and individual effectiveness is affected by many factors that fall under three dimensions: performance, member attitudes and behavioural outcomes and there are many team and individual related influences that affect these dimensions and lead to effectiveness.

2.3 Leadership and effectiveness:

Ilgen et. al (2004) provides theory that effectiveness can be affected positively if member are differentiated with a goal of learning. Assessing different qualities of members can provide with higher group and individual effectiveness, because subordinates learn from each other and maximized usage of different qualities influence performance positively (Ilgen, et. al, 2004). In addition to that, Kark and Shamir (2002) proposed that differentiating among members create a better possibility to access work-related needs and create intellectual challenges to employees which would increase individual and consequently group effectiveness. Sparrowe and Liden (1997) argue that differentiation in diverse member team can create a positive impact on the whole team effectiveness, because differe ntiated leadership allows the supervisor to exploit individual beneficial characteristics that distinct team members may possess. This especially shows when task interdependence is high,

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9 | P a g e because the leader can distribute the tasks according to members’ strengths and therefore increase group effectiveness (Liden, Erdogan, Wayne & Sparrowe, 2006). Le Blanc and Gonzalez – Roma (2012) argue that team effectiveness can increase if the leader can pursue high quality LMX with most of his/her team members or if the supervisor uses empowering leadership by giving employees more autonomy which may lead to higher individual and team performance as the employees feels higher motivation (Biemann, Kearney & Margraf, 2015). Therefore, the following alternative hypothesis is put forward:

Hypothesis: Differentiated leadership is positively related to team and individual effectiveness.

Ilgen et.al (2004) proposed that trust in other members’ actions and shared mental model is an important asset to group effectiveness. Differentiating among members could affect employees’ trust of their team members and may disrupt shared team vision which would affect team effectiveness negatively. In addition to that Henderson et. al (2009) proposed that differentiation creates sense of unfairness that may lead to negative results on individual and team effectiveness. Research shows by Cobb and Lau (2015) who studied LMX effects found that differentiated leadership leads to different type of quality relationship between leader and the various members of the group. Some of the employees get higher-quality relationship with leader and others get lower-higher-quality. According to Cobb and Lau (2015) this leads to dissatisfaction of employees that experience lower-quality LMX and creates sense of unfairness. Within group this situation can also lead to conflict and shrinking relationships among members (Cobb & Lau, 2015). Ilgen et. al (2004) listed conflict having a negative effect of team and individual effectiveness. Differentiation that appears through providing individual-rewards would have a negative effect on group effectiveness (Ilgen et. al, 2004). Zhang, Li, Ullrich and van Dick (2013) research on transformational leadership shows that leaders’ differentiated attention to employees has a negative effect on leader’s ability to motivate the group. In other words, differentiated leadership makes it difficult for the supervisor to articulate vision, provide role model example and foster acceptance of group goals, because employees’ sense of group collectiveness is negatively affected by differentiation in team settings. Their knowledge sharing would also be affected negatively, because team vision is challenged and employees become unaware of who has what kind of information (Ilgen et. al, 2004). Consequently, differentiated leadership is expected to impact group and individual team member effectiveness negatively, because of difficulties regarding

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10 | P a g e the supervision, lack of ability to share team vision and employees dissatisfaction with unfair treatment. Therefore, the following hypothesis is put forward:

Alternative hypothesis: Differentiated leadership is negatively related to team and individual effectiveness.

3. Methodology

3.1 Research design:

The goal of this thesis is to examine the consequences of differentiated leadership on teams and individuals by means of a systematic literature review on the basis of primary quantitative studies. Cooper (1988) argues that primary data increase validity of the study and prevents from misinterpretations that can be pursued by other researchers. This systematic literature review uses primary data unaffected by any form of statistical process (e.g. regression) in order to find a pure relation between a form of differentiation and its influence on diverse outcomes.

3.2 Collection of data:

The collection of academic articles related with differentiated leadership topic was pursued with a help of PRISMA 2009 Flow Diagram. This diagram was developed by David Moher, Liberati, Tetzlaff and Altman in order to addres s the need for systematic review and meta-analyses in health care section1. The improved flow chart was useful for other sectors and therefore, researchers started using it broadly for their systematic reviews. The flow diagram from PRISMA helps to build systematic process of the review of studies that were already conducted by other researchers. This diagram is used as a reference in the following explanations of data collection and identification.

The literature search was conducted as follows: database, selective search and references. As a database PsycInfo has been selected, because it is one of the leading databases on psychology in the world containing over 2 million studies in various fields of psychology (American Psychological Association, 2000). I n this database there were used several keywords in other to get articles related to this research topic. These keywords include leadership and: differentiation, differentiated, shared, agreement, group focus,

1

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focused, individual focus and individual-focused. Basic search option was used, but the

boundaries were set to peer-reviewed journals to increase the quality of studies to be found. In order to lower amount of irrelevant articles per keyword, a function was used that looks for chosen keywords only in the title and abstract of any article (e.g.: (leadership AND

differentiated).ab). Every keyword has provided with a number of articles (hits) containing

the chosen keywords. Table 1 shows amount of hits got per keyword.

Table 1. Amount of hits got on all keywords

Keyword Hits Search Engine Date

(Leadership AND differentiated).ab 226

PsycInfo (Basic

search) 21/04/2015

(Leadership AND differentiation).ab 249

PsycInfo (Basic

search) 21/04/2015

(Group focus AN D leadership).ab 7

PsycInfo (Basic

search) 21/04/2015

(Shared AND leadership).ab 1847

PsycInfo (Basic

search) 27/04/2015

(Leadership AND agreement).ab 451

PsycInfo (Basic

search) 21/04/2015

(Leadership AND individual

focus).ab 5

PsycInfo (Basic

search) 21/04/2015

(Leadership AND group- focused).ab 16

PsycInfo (Basic

search) 22/04/2015

(Leadership AND

individual-focused).ab 11

PsycInfo (Basic

search) 22/04/2015

All the articles in the hits were extracted to an Excel file with a help of PsycInfo database Export function. Afterwards, the steps presented in PRISMA 2009 Flow Diagram were followed in order to sort the articles collected. Sorting was needed for distinguishing relevant articles to the study from irrelevant ones. Firstly, screening step was followed by checking manually if there are any duplicates as there was a possibility of an article that would be hit more than once due to different author order, or minor difference in the title. Secondly, the eligibility step was used by scanning all of the articles titles to have a first view if the article could be relevant. For those cases where the article title appeared to be relevant (relevance was determined if it seemed that the title had aspects of leadership, differentiation or both; in such a case the article was passed to the next step) or there was a doubt whether it can be relevant the third step was applied: reading the abstract. The abstract indicates the most important part – if the study conducted in the article is primary empirical data. The usage of this type of data was the goal of this review. In addition to that, abstract tells the story of the study conducted in the article, which helped to determine whether the article

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12 | P a g e would be relevant for this research or not. In case the article appeared not to be a primary data quantitative paper or abstract showed that the study is not relevant, the article was marked as not suitable for coding.

Using PsycInfo database and keywords 15 articles were selected as suitable for coding. The other articles were not suitable due to lack of connect ion with leadership, differentiated leadership topics and some did not provide quantitative data. In addition to the articles retrieved from PsycInfo database, 24 more articles were used from an existing database that runs a project related with the differentiated leadership topic. All in all, both databases provided 39 articles in total that are suitable for coding.

3.3 Coding

After collection of papers was done, the relevant articles were coded and the respective information was entered into the program - Statistical Package for Social Sciences (SPSS). The coding includes all details of the articles from information about the participants (sex, age, position) to indication of dependent and independent variables. Correlations between differentiated leadership and relevant outcomes have been coded as well.

Following the coding section the data is reviewed to check which one of the alternative hypotheses finds support in existent empirical research. From these results follows an interpretation of the data and a discussion of the outcomes in order to find a new insight in differentiated leadership theory and practical implications.

4. Results:

The results section consists of 17 tables (2 of them in the appendices) that introduce findings regarding collected articles.

4.1 Sample:

Article collection has yielded 39 articles. All of them are presented in table 2 (can be seen in the appendix no. 1). The paper by Hooper and Martin (2008) was the only one that provided two distinct samples with their own measurements and separate correlation tables. Other articles containing more than one sample have merged the samples for the final statistical processes such as correlations and regressions (not discussed in this research). Majority of the papers were published in the last 10 years (84.61%) and most of the articles in the last 5 years (46.15%), showing researchers’ increasing interest in differentiation phenomenon. O nly eight studies out of 39 were pursued over longer period of time instead of

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13 | P a g e a one-time survey. A lot of studies were pursued by researchers from United States universities. However, most of the samples come from 2 countries: China (10) and United States (12). The other studies were conducted in a variety of countries: Canada, Turkey, India, South Korea, Australia, Germany, Spain, Taiwan, Denmark and Israel. Not all the researchers used participants from the country that they reside in.

The samples consisted of participants from variety of sectors. Some of the studies included more than one branch participators in their samples. Most of the contributors were coming from healthcare, manufacturing, retail, bank, telecommunication, hospitality and military institutions. Fewer studies were conducted in libraries, universities and public sectors such as utilities or fire- fighters. Two studies did not indicate the sector that the participants were from.

Regarding the sample size, all studies indicated either total amount of participants or separated them into employees and supervisors and presented the sizes of those respective groups. Employee sample size was mostly between 200 and 300 workers with an exception of two cases under this range (138 and 186) and 4 cases above this range (425, 561, 573 and579). Supervisor sample was between 25 and 100 leaders with exception of one study that listed 125 participants. Some of the supervisor sample sizes were the same as group size, which means that one leader meant one group and amount of leaders corresponded to amount of groups. In studies were the whole sample was listed without a distinction of position, the size of the sample had a great variation. 3 studies had samples of less than 100 participants, in 8 articles there between 150 and 300 contributors. 3 cases had between 350 and 500 participants and 2 studies had 828 and 834 participators. Finally, there were 3 articles that in comparison had exceptionally high amount of participants: 2493, 4500 and 16911. Thirty one articles presented the amount of groups that were studied. This shows that many cases were studied in terms of groups, not only individuals. Majority of articles studied up to 100 groups. Only 4 studies had a sample of a little bit more than 100 groups. The study by Biemann, Kearney and Marggraf (2015) had the highest specified group sample of 704 groups. The mean amount of members in one group varied from 2 to 9 members with an exception of 4 studies that had mean sizes of 10.2, 15.15, 24.1and 28.2.

To express male and female variety in the sample, this research based on masculinity by notifying percentage of men in the sample. Not all the studies specified the male percentage in their sample. Some of the articles distinguished between employees and supervisors. In employee sample 58.82% of participants had masculinity percentage above 50%, whereas in supervisor sample 75% of leaders had 50% or more chance of being male. There is identified tendency of having more male leaders than employees. In the sample

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14 | P a g e where position was not specified, 52.94% of the articles that stated total sample size were 50% or more masculine.

In the table there is a variable regarding mean age of the sample. It is distinguished into employees, supervisors and not specified position participants as well. In two papers: Herdman, Yang and Arthur (2014) and Nishii and Meyer (2009), the re was provided a percentage for various ages from 18 years old, therefore, those articles are indicated as

various age reported. In addition to that, in papers by Ford and Seers (2006), Kunze and

Leicht-Deobald (2014), and Herman and Chiu (2014) an age range instead of the mean age was reported. All the samples had age variation from 18 to 50 years. No sample had mean of higher than 50 years. 21.5% of the participants with no specified position fell into 20 to 30 years old range, 52.63% were 30-40 and 26.32% of the contributors were above 40 years old but not more than 50 years old. In the sample of employees, 28.57% of them were 20-30, 42.86% were 30-40 and 28.57% were 40-50 years old. In comparison, supervisors’ sample mean age was always above 30 years o ld: 28.57% were 30-40 and 71.43% from given cases were between 40 and 50 years old. The measurements were not corrected for sample size. All in all, there was a tendency of participants being mainly 30 to 40 years old with a distinction of supervisors who were mainly above 40 years old.

Lastly the table provides with the information of what kind of leadership assessment construct was assessed in each of the papers. 30.77% of the articles have discussed transformational leadership, whereas 61.54% have considered leader- member exchange influences. There were found two new leadership constructs that were not considered before. Somech (2003) study has considered participative decision-making and defined participative leadership in the article. Biemann, et al. (2015) described empowering leadership and its influences. Stamper and Masterson (2002) do not present any leadership construct, but discusses differentiation through perceived insider status. This is going to be explained further in another results section. To sum up, there were more representations of LMX than any other leadership construct in this systematic review sample.

To conclude, most of the papers were published in the last five years and were mostly pursued by the researchers based in the United States. Most of the samples came from the US or China. There was a variety of sectors, but majority samples were from healthcare, manufacturing, retail, bank, telecommunication, hospitality and military institutions. The sample was often separated into emplo yees and supervisors. Employee sample was mainly from 100 to 600 people, main age range was 30-40 and it was more masculine than feminine. Supervisor sample consisted of 25 to 125 people, majority were aged from 40 to 50 years old and it was more masculine than feminine. Some of the samples did not specify what position

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15 | P a g e people pursue and these samples’ sizes were great in variety from less than 100 to more than few thousands. The sample was more masculine and majority of participants had mean age ranged from 30 to 40 years old. The studies mostly were done in terms of groups, not only individuals and most group sizes varied from 2 to 9 members. Most of the focus was on LMX leadership construct and 3 new cases under leadership were indicated.

4.3 Differentiation measures:

Table 3 (can be found in appendix no. 2) provides with information of differentiated constructs in each of the studied articles. Not all papers provided differentiation optimization measures, but all studies provided leadership assessment scales. Some of the studies provided information whether the leadership was rated by leader or member and some of the researches consider both member and leader ratings of leadership. LMX differentiation is presented in the various studies under different na mes: relative LMX, deviance, variability, variance and disparity. However, differentiation optimizations show assessment similarities which leads to a conclusion that these differentiation constructs are the same LMX differentiation construct, just under d ifferent name.

Following the topic of differentiation construct, there was a variety of constructs that should be explained why they have been chosen. Ford and Seers (2006) assessed not only LMX but also team- member exchange to help access within-team agreement. TMX was separated into to sub-scales: contributions and receipts in other research what the members are willing to contribute from what they receive in exchange (Ford & Seers, 2006). Erdogan et. al (2010), Vidyarthi et. al (2010), Harris et. al (2014) and Ma and Qu (2010) have assessed LMX differentiation on group level, however their outcomes were on the team level, therefore, LMX relationship with the outcome was presented in the studies and LMX differentiation and the outcome were not linked during the statistical processes. In the research from Hrivnak (2009), differentiation was assessed through perceived similarity and it mediated LMX influence.

Nielsen and Daniels (2012) did not provide differentiated aspect from transformational leadership, because their research did not find significant proof that there is for a differentiation construct, therefore, group level and differentiated individual level transformational leadership is provided as one variable.

This systematic literature review provided new differentiation concepts that were not discussed in the theory. Firstly, Somech (2003) introduced participative decision making where employees participate in decision making. Similar to that was empowering leadership where leaders share power with their subordinates and leads to higher autonomy and member

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16 | P a g e responsibility (Biemann et. al, 2015). In addition to that were included findings of perceived insider status that show the influence of leader and member relationship on feeling of inclusion (Stamper et. al, 2002).

LMX – 7 scale by Graen & Uhl- Bien (1995) was found to be the most used LMX measurement. The most popular transformational leadership measurements were mostly created and varied by researcher Podsakoff. Differentiation was mainly assessed by measuring leadership score variance or standard deviation, which is a similar measure as standard deviation is square root of variance. Another popular measure was dividing Within-group SD by within- Within-group mean, this measurement was proposed by Allison (1978) and used in a few researchers listen in this systematic review.

The following sections summarize the findings of differentiation constructs on various outcomes. As the goal of this research is to find the influence of differentiation on group and individual effectiveness, the outcomes that were found are going to be grouped in group effectiveness dimensions by Cohen and Bailey (1997) that were presented in theoretical background. Those dimensions include performance-related, member attitudes and behavioural outcomes measures of effectiveness. At the end of these dimensions there is a section dedicated to other findings retrieved by this systematic review.

4.3 Differentiation influences on performance dimension of effectiveness:

This systematic review provided with some articles that studied the relationship between differentiation and group effectiveness itself. It is presented in the first sub-section. The other performance-related outcomes are presented afterwards separately. As Cohen and Bailey (1997) distinguished performance (group and individual) from innovation, all three variables are going to be explained in separate sub-sections. In addition to that, there are two important levels – team and individual one. The latter is a cornerstone aspec t to the group as the team consists of various employees and individual aspects influence each of their effectiveness. The following section includes group and individual level variables.

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4.3.1 Group effectiveness

Table 4. Differentiation impact on group effectiveness

Reference Outcome Form of differentiation Correlation

Wu, Tsui & K inicki

(2010) Group effectiveness

Differentiated individual-focused transformational

leadership -0.24

Zhang, Li, Ullrich

& van Dick (2013) Group effectiveness

Differentiated CEO Individual-focused transformational

leadership -0.24

Herdman, Yang &

Arthur (2014) Group effectiveness LMX disparity 0.08

Choi (2013) Group effectiveness Member LMX differentiation 0.10 Choi (2013) Group effectiveness Leader LMX differentiation 0.09

Group effectiveness is one of the main points in the hypotheses of this research. The table shows correlations between group effectiveness and differentiated LMX or transformational leadership. There are alternative findings listed by different authors. The opposing difference can be explained by the mediators that affect a relationship between differentiation and group effectiveness. Wu, Tsui and K inicki (2010) studied transformational leadership. Their research found that differentiated transformatio nal leadership diverges leader identification which leads to divergence in self-efficacy and affects group effectiveness negatively (Wu et. al, 2010).. There was also one more assumption that self-efficacy may also lead to a decrease in collective-self-efficacy which finally also affects group effectiveness negatively (Wu et. al, 2010).

Zhang, Li, Ullrich and van Dick (2013) also found a negative relation between differentiated leadership and group effectiveness. They researched top management teams (TMT) and CEO leadership effects on TMT effectiveness (Zhang et. al, 2013). Their findings were that differentiated CEO individual- focused transformational leadership had negative impact on TMT potency which mediated a negative relationship between differentiated TFL and group effectiveness (Zhang et. al, 2013). Differentiation fragments the team instead of integrating it to make collective decisions, therefore, TMT potency decreases (Zhang et. al, 2013).

Herdman, Yang and Arthur (2014) have found a positive relation between LMX disparity and team effectiveness. Their research claimed that low leader- leader exchange moderates greater relationship between LMX disparity and teamwork that leads to higher group effectiveness (Herdman et. al, 2014). Another LMX differentiation by Choi (2013) also

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18 | P a g e showed similar results but through mediating effect of conflict and group potency. In addition to that, the relationship between conflict and group potency was moderated by power distance and leader prototypicality (Choi, 2013). Higher power distance and leader prototypicality would affect relationship conflict and group potency negatively (Choi, 2013). Leader LMX differentiation and relationship conflict correlated negatively meaning that higher LMX differentiation would mean decrease in relationship conflict, whereas member LMXD correlation with conflict was really low (0.01) (Choi, 2013). Group potency had positive relationship with LMXD and led to increase in group effectiveness, therefore, the total influence of LMX differentiation on group effectiveness is positive with a help of moderators and mediators.

There could be noticed that studies about group effectiveness lead to negative effect if there is transformational leadership related differentiation, whereas in this review LM X differentiation led to a positive relationship between differentiation construct and group effectiveness. However, as there are various mediators and moderators involved, it is beyond this systematic review to conclude if TF leadership differentiation te nds to lead to a negative effect on group effectiveness and LMX differentiation tends to lead to positive impact on group effectiveness.

4.3.2 Group performance

Table 5. Differentiation impact on group pe rformance

Reference Outcome Form of differentiation Correlation

Wang & Howell

(2010) Task performance

Individual- focused

transformational leadership 0.17 Boies & Howell

(2006) Team potency LMX differentiation 0.24

Vidyarthi, Liden and Anand, Erdogan &

Ghosh (2010) Job performance RLMX 0.15

Choi (2013) Group performance

Member LMX

differentiation 0.11

Choi (2013) Group performance Leader LMX differentiation 0.19 Zhang, Waldman &

Wang (2012) Group performance LMX differentiation 0.07 Le Blanc &

Gonzalez-Roma

(2012) Group performance LMX differentiation 0.06

Stewart & Johnson

(2009) Group performance LMX variance -0.08

Li & Liao (2014) Group performance LMX differentiation 0.03 Liden, Erdogan, Group performance LMX differentiation 0.07

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19 | P a g e Wayne & Sparrowe

(2006)

Zhang, Li, Ullrich & van Dick (2013) Subsidiary team performance Differentiated CEO Individual- focused transformational leadership -0.27 Kunze, Barend de

Jong & Bruch (2013)

Organizational performance

Differentiated

Individual-focused leadership -0.12

Cohen and Bailey (1997) extended definition of effectiveness into performance in terms of group performance and output. To begin with, Wang and Howell (2010) investigated task performance which is also related with group performance that was measured on group level in their study. They found a positive relation between individual- focused transformational leadership and task performance, because leaders provided recognition and acknowledgement that and increased self-efficacy (Wand & Howell, 2010) that was also introduced by Wu et al. (2010) study. Boies and Howell (2006) studied team potency that is also related with group performance related variable. This study was introduced in previous section as LMXD was a moderator. Team potency related positively with LMXD because of high leader- member exchange and lower competition among members (Boies & Howell, 2006).

Job performance is an important factor in assessing group performance. Vidyarthi, Liden and Anand, Erdogan and Ghosh (2010) found that relationship between differentiation construct of relative LMX and job performance is moderated by LMX social comparison. LMXSC provide an overview of how employees perceive themselves in comparison with their coworkers (Vidyarthi et. al, 2010). According to Vidyarthi et. al (2010), LMX differentiation give higher job-related support from leaders to subordinates which affects their LMXSC positively and leads to higher job performance.

Moreover, 6 papers have studied differentiation relationship with group performance. Choi (2013) study provided mediating and moderating effects that influence LMXD relationship with group performance. According to Choi (2013), LMXD influence on group performance is mediated by group role clarity and team work coordination. Group clarity and coordination are also affected by a thoro ugh expertise distribution in the team and leader-leader exchange (Choi, 2013). Distributed expertise had higher positive effect on mediators than LLX which lead to a high positive even (0.51 and 0.51) influence of group role clarity and coordination on group performance (Choi, 2013). Differentiated LMX provides higher group role clarity and coordination that makes individual role clear to team members which increases a feeling of being useful and leads to higher group performance (Choi, 2013). Li and Liao (2014) also studied group performance with the team coordination as the mediator.

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20 | P a g e However, the relationship between LMXD and team performance turned out to be positive but little (Li & Liao, 2014). Smaller correlation may be explained that team coordinatio n puts boundaries on subordinates and not all of them may be happy with their social setting and contribute less to group performance (Li & Liao, 2014). Moreover, Zhang, Waldman and Wang (2012) have also studied LMX variability effect on team performance t hrough moderator and mediator influences. Their study introduced team shared vision as a moderator that moderates relationship between LMX and informal leader emergence (Zhang et. al, 2012). The latter then mediates the relationship between LMX and team performance (Zhang et. al, 2012). Higher informal leader emergence increases team performance. In order to access differentiation, team variability in LMX is used which has a little correlation with team performance (Zhang et. al, 2012)

Other researchers that have studied the relationship between LMXD and team performance are Le Blanc and Gonzalez-Roma (2011). Their construction was based having LMX median as a moderator which is slightly different from other studies were LMXD was considered as a moderator. The relationship between LMXD and team performance was found to be low, however, LMX median correlation with team performance is way higher (0.36) (Le Blanc & Gonzalez-Roma, 2011), which shows that LMXD really has an influence on outcomes and should not be generalized to LMX construct. In addition to that, the comparison shows that LMXD leads to lower group performance even if it is positive. Study by Liden, Erdogan Wayne & Sparrowe (2006) yields the same type of result as research by Le Blanc and Gonzalez-Roma (2011). Here LMX median also was a moderator and resulted in higher correlation with team performance (0.20) than LMX differentiation (Liden et. al, 2006). In addition to that, Liden et. al (2006) also considered task interdependence as a moderator of LMXD and group performance relationship. LMXD has affected task interdependence negatively, however, task interdependence had little influence on team performance (Liden et. al, 2006). In comparison, the research by Stewart and Johnson (2009), took LMX variance as a moderator between group diversity such as gender, function, age and team size, and team performance. The study found that such demographics as size, function fit and gender fit have negative influence on LMX differentiation and finally leads to lower group performance (Stewart & Johnson, 2009).

Three more variables were considered next to performance: subsidiary team performance and organizational performance. Zhang et. al (2013) who also studied group effectiveness discussed earlier, found that differentiated CEO transformational leadership also leads to lower subsidiary team performance through mediation of TMT potency that decreases due to differentiation impact (Zhang et. al, 2013). In addition to that, organizational

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21 | P a g e performance is also found to decrease, because differentiation decreases commitment climate and organizational citizenship behaviors (OCB) climate which mediate lower organizational performance (K unze, de Jong & Bruch, 2013).

4.3.3 Individual performance

Table 6. Differentiation effects on individual performance

Reference Outcome Form of differentiation Correlation

Zhang, Waldman & Wang (2012)

Individual job

performance LMX differentiation 0.02

Wang & Howell

(2012) Individual performance

Individual- focused transformational

leadership 0.19

Li & Liao (2014) Individual performance LMX differentiation 0.11 Liden, Erdogan,

Wayne & Sparrowe

(2006) Individual performance LMX differentiation 0

Henderson and Wayne, Shore, Bommer & Tetrick

(2008) In-role performance RLMX 0.26

Hrivnak (2009) In-role performance Leader LMX 0.59

Hrivnak (2009) In-role performance Follower LMX 0.20

Hrivnak (2009) Extra-role performance Leader LMX 0.57

Hrivnak (2009) Extra-role performance Follower LMX 0.19

Some of the studies has assessed not only group performance but also individual performance. It is important for the research, because we based our hypotheses not only on group level effectiveness, but also individual one.

Research by Liden, Erdogan, Wayne and Sparrowe (2006) has assessed individua l performance on individual level and averaged it for team level. As LMX differentiation is assessed only through group level, there was no relationship found between LMX differentiation and individual performance (Liden et. al, 2006). However, the study stated that the relationship between LMXD and individual performance is moderated by LMX, which was true as higher LMX indeed led to higher individual performance (0.16) (Liden et. al, 2006). Another author that found a positive relationship with individual performance was Wang and Howell (2012). They stated that individual- focused transformational leadership leads to higher leader identification which mediates a positive relationship between individual- focused TFL and individual performance (Wang & Howell, 2012).

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22 | P a g e Two papers: by Li and Liao (2014) and Zhang et. al (2012) have assessed both team and individual performances. Team performances were discussed in the previous sub-section. In both cases individual performance was affected by the same set of mediato rs and moderators and lead to positive results. In addition to that, Zhang et. al (2012) individual performance is again affected differently by LMX and LMXD. Correlation between individual performance and LMX is negative (-0.05), whereas with LMXD relatio n is little but positive (Zhang et. al, 2012). It can be explained with negative relation between team shared vision and individual performance. This negative relation arises; because team shared vision may contradict individual goals (Zhang et. al, 2012).

In addition to individual performance we also consider individuals’ in-role and extra-role performances. Henderson & Wayne, Shore, Bommer and Tetrick (2008) present relationship between RLMX and in-role performance through mediation of psychological contract fulfilment. Higher RLMX leads to higher levels of PC fulfilment which makes employees perform their tasks better (Henderson et. al, 2008). The research by Hrivnak shows that LMX influences an increase in in-role and extra-role performances through perceived similarity. It leads to higher interpersonal affect (liking the leader) which mediates a positive relationship between LMX and in-role and extra-role performances, because the positive environment (perceived similarity and favourable leader) increase willingness to perform better in and outside the role.

4.3.4 Innovation

Table 7. Differentiation effects on innovation

Reference Outcome Form of differentiation Correlation

Tordera & Gonzalez-Roma

(2013) Team innovative climate LMX differentiation 0.04 Liao, Liu & Loi

(2010) Creativity LMX differentiation -0.09

Liao, Liu & Loi

(2010) Creativity TMX differentiation 0.04

Herman & Chiu

(2014) Creative behavior

Individual- focused

transformational leadership 0.21 Jiang, Gu & Wang

(2014)

Team innovative performance

Differentiated

Individual-focused leadership -0.44 Kunze &

Leicht-Deobald (2014)

Team innovative performance

Differentiated

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23 | P a g e Innovation was also presented as one of performance dimension categories. The findings presented in the table show different results regarding creativity and climate, however, innovative performance seems to be affected negatively by differentiation.

Herman and Chiu (2014) has studied creative behaviour. Their discussion includes individual- focused TFL with individual differentiation as a mediator ( Herman & Chiu, 2014). In this case individual differentiation aspect can be considered as differentiation measure. Therefore, both correlations are going to be considered. Individual- focused TFL leads to an increase in individual differentiation which mediates higher creative behaviour ( Herman & Chiu, 2014). Individual differentiation also has a positive correlation with creative behaviour (0.24), therefore, positive impact is proved with both measures: leadership style and individual differentiation (Herman & Chiu, 2014).

In the paper by Liao, Liu & Loi (2010) LMXD and TMXD are moderators that influence the effect of LMX/TMX quality on self-efficacy which by theory enhances creativity. LMXD has a negative effect on self-efficacy and leads to negative influence on creativity (Liao et. al, 2010). TMXD on the other hand leads to higher positive self- efficacy due to increased relationships between team members (Liao et. al, 2010). Positive self-efficacy then influence a higher creativity in the team (Liao et. al, 2010). Tordera and Gonzalez-Roma (2013) studied mean LMX and innovation climate relationship that is moderated by differentiated LMX. LMXD had a negative influence on innovation climate (-0.20) at time one; however it became positive in time 2. This study shows that the influence on a variable can change completely in a period of time and longitudinal studies show more variety.

Kunze and Leicht –Deobald (2011) have looked for a relationship between age-gender faultines and team innovative performance through moderation of differentiated individual- focused TFL. This type of differentiation affects team innovation performance negatively. The same is the case in Jiang, Gu and Wang (2014) research, however, the relationship between differentiated individual- focused transformational leadership and team innovation is mediated by team knowledge. Differentiated individual- focused TFL has negative effect on team knowledge through the moderation of ne gative team interdependence (Jiang et. al, 2014). This chain of dependencies leads to a negative effect on team innovation.

To sum up, performance dimension has provided support for both contradicting hypotheses. Differentiation affects group effectiveness positively and negatively depending on which moderators and mediators influence the relationship. The main hypothesis fins

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24 | P a g e support in group performance is mainly influenced positively by differentiation which supports the main hypothesis. Also, on individual level differentiation has a positive effect on individual and role performances. In addition to that, differentiation influences positively the creativity as well. However, alternative hypothesis also finds support in performance dimension. First of all, on a broader level (subsidiary team, organizational): performance is negatively affected by differentiation. Secondly, differentiation affects team innovative performance negatively. All in all, the main hypothesis finds more support in performance dimension than the alternative hypothesis, with an exception of group effectiveness variable where differentiation effect results support both hypotheses evenly.

4.4 Differentiation influences on member attitudes dimension of effectiveness:

Second dimension that was introduced by Cohen and Bailey (1997) is member attitudes. With respect to theory the following section is going to present findings in such member categories as trust in management and employee challenge opportunities (expressed as within- group agreement), OCB, satisfaction and commitment.

4.4.1 Within-group agreement

Table 8. Differentiation effects on within-group agreement

Reference Outcome

Form of differentiation

Correlati on

Ford & Seers (2006)

Within-group climate agreeme nt Supportive management DTMX contributions 0.35 Ford & Seers (2006) Supportive management DTMX receipts 0.41 Ford & Seers (2006) Supportive management DLMX 0.35

Ford & Seers (2006) Recognition

DTMX

contributions 0.31 Ford & Seers (2006) Recognition DTMX receipts 0.43

Ford & Seers (2006) Recognition DLMX 0.23

Ford & Seers (2006) Contribution

DTMX

contributions 0.34 Ford & Seers (2006) Contribution DTMX receipts 0.39

Ford & Seers (2006) Contribution DLMX 0.39

Ford & Seers (2006) Challenge

DTMX

contributions 0.46

Ford & Seers (2006) Challenge DTMX receipts 0.37

Ford & Seers (2006) Challenge DLMX 0.27

Ford & Seers (2006)

Senior management effectiveness

DTMX

contributions 0.35

Ford & Seers (2006)

Senior management

effectiveness DTMX receipts 0.39

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25 | P a g e effectiveness

Cogliser &

Schriesheim (2000) Climate Challenge LMX 0.20

Cogliser &

Schriesheim (2000) Role conflict LMX 0.33

Cogliser &

Schriesheim (2000) Autonomy LMX 0.40

Cogliser &

Schriesheim (2000) Support LMX 0.42

Cogliser &

Schriesheim (2000) Social relations LMX 0.40

Table 8 provides with climate that affects members’ attitudes. Differentiated leadership affects within- group climate positively through work interdependence and social interactions (Ford & Seers, 2006). Differentiation in LMX and TMX in this research had positive effect on work interdependence and social interactions which led to positive relationship between LMXD/TMXD and within- group agreement (Ford & Seers, 2006). The study by Cogliser & Schriesheim (2000) found similar positive relationship between LMX and climate fragments.

4.4.2 Organizational citizenship behaviours (OCB)

Table 9. Differentiation effects on OCB

Reference Outcome

Form of

differentiation Correlation

Vidyarthi, Liden and Anand, Erdogan & Ghosh (2010) Organizational citizenship behaviours LMX 0.15 Harris, Li & Kirkman (2014) Organizational citizenship behaviours LMX -0.32

Herman & Chiu (2014)

Organizational citizenship behaviours towards individuals

Individual- focused transformational

leadership 0.07

Herman & Chiu (2014)

Organizational citizenship behaviours towards groups

Individual- focused transformational

leadership 0.15

Henderson and Wayne, Shore, Bommer & Tetrick (2008)

OCB

Sportsmanship RLMX 0.31

Henderson and Wayne, Shore, Bommer & Tetrick (2008)

Helping behaviour

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26 | P a g e Wang & Howell

(2010) Personal initiative

Individual- focused transformational

leadership 0.18

Erdogan & Bauer (2010)

Helping behaviour targeting

coworkers LMX quality 0.28

Li, Shang, Liu & Xi

(2014) Knowledge sharing

Individual- focused

leadership 0.35

Wang, Hsieh, Tsai &

Cheng (2011) Cooperative voice

Individual- focused transformational

leadership -0.18

Wang, Hsieh, Tsai &

Cheng (2011) Cooperative silence

Individual- focused transformational leadership 0.05 Stamper & Masterson (2002) Altruism Perceived insider status 0.19 Stamper &

Masterson (2002) Production deviance

Perceived insider

status -0.21

Table 9 shows that OCB is affected positively by differentiation with an exception of one case. Differentiation has a positive effect on OCB through moderator LMXSC influence (Vidyarthi et. al, 2010). Increase in subordinate support from leaders raise their LMX social comparison levels and, therefore, employees tend to be more responsible and willing to help (Vidyarthi et. al, 2010). The study by Herman and Chiu (2014) has studied focused on group-focused TFL effect on OCB, however, the study results also identify individual- group-focused TFL positive effect on OCB towards individuals and groups (the latter has a higher positive relationship) through moderation of individual differentiation.

OCB can be separated into more fragments such as sportsmanship, helping behaviours altruism, personal initiative and knowledge sha ring. Differentiation had positive effect on all of those fragments. Helping behaviour targeting co-workers was influenced positively by LMXD through moderation of high procedural and distributive justice that increased subordinates feeling of fairness and willingness to help out (Erdogan & Bauer, 2010). Helping behaviour and sportsmanship had a positive relationship with RLMX through positive effect of RLMX on the mediator: PC fulfilment (Henderson et. al, 2008). Moreover, high perceived insider status also led to a higher altruism levels through mediation of tenure and hours worked per week (the relationship is relatively low) and high perceived organizational support (0.60) (Stamper & Masterson, 2002) which both count for a perceived inclusion in the organization (Stamper & Masterson, 2002). This result was an opposite of the production deviance result which represents employees responsible behaviour in creating product or providing service (Stamper & Masterson, 2002). Higher altruism meant more responsibility over one’s own actions and lower production deviance. In addition to that

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27 | P a g e differentiated individual- focused TFL also had a positive effect on knowledge sharing with a help of mediator LMX, which meant that differentiated leadership increased leader- member exchange and led to people willingness share knowledge more among team members (Li, Shang, Liu & XI (2014). In one case OCB and differentiation had a negative relationship. LMX differentiation acted as a moderator between LMX and OCB (Harris et. al, 2014). Higher levels of LMXD increased inequality between team members which led to a negative impact on OCB (Harris et. al, 2014).

Research by Wang, Hsieh, Tsai and Cheng (2011) studied value congruence influence of cooperative voice and silence. This rela tionship was moderated by differentiated individual- focused leadership and had negative impact on cooperative voice and positive effect on corporate silence (Wang et. al, 2011). Higher differentiated leadership meant decrease in created existence of in and out-group members that made members feel more uncomfortable to speak in front of the peers of different groups (Wang et. al, 2011).

4.4.3 Commitment

Table 10. Differentiation effects on commitment

Reference Outcome

Form of

differentiation Correlation

Green, Anderson &

Shivers(1996) Commitment LMX 0.46

Erdogan & Bauer (2010)

Organizational

commitment LMX quality 0.40

Le Blanc & Gonzalez-Roma

(2012) Affective commitment

LMX

differentiation 0.17

Kunze, Barend de Jong & Bruch (2013) Affective organizational commitment climate Differentiated Individual-focused leadership -0.47

Differentiated LMX leads to higher levels of commitment. Green et. al (1996) explains that positive leader-member exchange increases subordinates positive feelings about the organization which leads to higher commitment. Erdogan & Bauer (2010) presents high positive organizational commitment as a result of moderating effect of a strong procedural and distributive justice climate in the organization which creates a sense of fairness and increases employees’ commitment to the organization. LMX differentiation also relates positively to affective commitment through moderator LMX median were higher leader-member-exchange creates a better relationship between leader and subordinate and increase their affective commitment (Le Blanc & Gonzalez- Roma, 2011). However, affective

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28 | P a g e organizational climate and differentiated individual- focused leadership has a negative correlation due to moderating effect of contingent-reward leadership climate (K unze et. al, 2013). Contingent-reward is related with amount of rewards that leaders provide to individuals, which may cause a feeling of unfairness and affect commitment climate negatively (K unze et. al, 2013).

4.4.4 Satisfaction

Table 11. Differentiation effects on satisfaction

Reference Outcome

Form of

differentiation Correlation

Erdogan & Bauer (2010)

Satisfaction with

co-worker relations LMX quality 0.31

Green, Anderson & Shivers(1996)

Satisfaction with working

relationships LMX 0.66

Biemann, Kearney &

Marggraf (2015) Career satisfaction

Empowering

leadership SD -0.12 Hooper & Martin (2008) Extrinsic satisfaction LMX variability -0.19 Hooper & Martin (2008) Intrinsic satisfaction LMX variability -0.16 Hooper & Martin (2008) Job satisfaction LMX variability -0.23 Erdogan & Bauer (2010) Job satisfaction LMX quality 0.37

Hrivnak (2009) Job satisfaction Leader LMX 0.17

Hrivnak (2009) Job satisfaction Follower LMX 0.48

Satisfaction can be related with various variables. Table 11 presents satisfaction with relationships, environment and work. LMX quality has a positive effect on satisfaction with co-worker relationships with an influence of demographics (Green et. al, 1996) and job through moderating impact of procedural and distributive justice climate that creates sense of fairness (Erdogan et. al, 2010). Hrivnak (2009) also has found a positive relationship between leader/member-rated LMX and job satisfaction through perceived levels of similarity and mediating effect of liking the leader. These two factors increase employees’ positive reaction to its team and leader which leads to higher job satisfaction (Hrivnak, 2009).

Hooper and Martin (2008) have studied not only job satisfaction, but also extrinsic and intrinsic satisfaction and found a negative result. LMX variability creates team conflict in the team due to unfair treatment; therefore, increased team conflict mediates a negative relationship between LMXD and extrinsic/intrinsic job satisfactions (Hooper & Martin, 2008). Differentiation also affects career satisfaction negatively, because career success is perceived through salary or hierarchical levels (Biemann et. al, 2015). Therefore,

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29 | P a g e differentiation through salary or hierarchy rewards affect employees’ career self-efficacy negatively and mediates negative effect on career satisfaction (Biemann et. al, 2015).

To sum up, the main hypothesis finds much support in member attitudes measure of effectiveness. Differentiation affects positively climate, within-group agreement, OCB and its fragments, commitment job and relationship satisfaction. Alternative hypothesis is true only for differentiation negative effects on affective organizational commitment climate, career, extrinsic and intrinsic satisfaction, cooperative voice and OCB when LMXD is considered as a moderator between mean LMX and OCB.

4.5 Differentiation influences on behavioural outcomes dimension of effectiveness:

Cohen and Bailey (1997) defined behavioural outcomes mainly through absenteeism and turnover. However, employee and leader behaviour may lead to more outcomes. The following section provides findings from this systematic review that include behavioural outcomes such as conflict, well-being, turnover and other possible behavioural outcomes that may affect group and individual effectiveness.

4.5.1 Conflict

Table 12. Differentiation effects on conflict

Reference Outcome

Form of

differentiation Correlation

Boies & Howell (2006) Conflict LMX differentiation -0.22 Cobb & Lau (2015) Conflict LMX differentiation 0.28

This systematic review has found relationship conflict as an outcome of LMX differentiation. According to the theory, LMX leads different quality relationship between leaders and his/her subordinates (Cobb & Lau, 2015). Cobb & Lau (2015) study that investigated several relationship based variables found that differentiating among members relates to an increase in relationship conflict. It is explained through feelings of deprivation and creation on inequality in the team (Cobb & Lau, 2015). Another paper by Boies and Howell (2006) found a completely different result. In this research LMX differentiation was distinguished as a moderator between mean LMX and conflict. Boeis and Howell (2006) found that if LMX relationship is positive then higher LMX differentiation is a positive action, because it decreases competition among team members for leader’s attention due to high LMX relationships. All in all, LMXD effect on conflict has a few dependencies: LMXD

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