Leader-member Exchange and Job Performance: Comparing the Influence of Actual and Perceived Cultural Similarity

Abstract

Building on similarity-attraction theory and social exchange theory, this study investigates the relationship between the actual and perceived cultural similarity, Leadership-Member Exchange (LMX) and job performance. Two fundamentally different approaches to conceptualizing cultural similarity are put forth in this study: real actual cultural similarity which relies on secondary sources data to calculate and infer the degree to which one is actually similar to another individual in cultural attribute, and perceived cultural similarity which subjectively evaluate psychic cultural similarity. Different from prior researches on similarity-LMX relationship that mostly involve demographic domain, the present study features the following: 1) focusing on comparing influence of actual cultural similarity and perceived cultural similarity on LMX, authenticating perceived cultural similarity is a stronger predictor of work outcomes; 2) verifying the role of LMX as a mediator between perceived cultural similarity and job performance. Support for hypotheses was found in the empirical studies, conducted with data from more than 400 participants working in multi-cultural corporations. This research is innovative in theory and methodology which enriches managerial literature and sheds light on further cultureLMX study. Especially, a new perception-based measure developed in this study by combining several measures in exist literature would lead to more accurate assessment.