Original Research

How leader-member exchange affects work outcomes in small-and-medium enterprises?

Dorothea W. Ariani, Nur Feriyanto
SA Journal of Human Resource Management | Vol 22 | a2397 | DOI: https://doi.org/10.4102/sajhrm.v22i0.2397 | © 2024 Dorothea W. Ariani, Nur Feriyanto | This work is licensed under CC Attribution 4.0
Submitted: 19 July 2023 | Published: 19 March 2024

About the author(s)

Dorothea W. Ariani, Department of Management, Faculty of Economics, Universitas Mercu Buana Yogyakarta, Yogyakarta, Indonesia
Nur Feriyanto, Department of Management, Faculty of Business and Economics, Universitas Islam Indonesia, Yogyakarta, Indonesia

Abstract

Orientation: Employees with a collectivistic culture want the closeness and support of their leaders. How leader-member exchange (LMX), perceived organisational support (POS), job satisfaction (JS) and organisational commitment (OC) influence each other still requires in-depth research because there are differences between the results of previous studies.

Research purpose: This study examined the relationship model of LMX and POS as antecedent, mediator and moderator variables on work outcomes such as JS and OC in small- and medium enterprises (SMEs) with a collectivistic culture and high-power distance.

Motivation for the study: Leadership in SMEs gets less attention because of its role in managing and carrying out operational activities.

Research approach/design and method: Data were collected from 427 employees using questionnaires with purposive sampling, which was tested for validity and reliability. Structural equation modelling (SEM) and multi-group SEM were used to test the relationship model.

Main findings: The results of testing four relationship models proved that the LMX relationship did not directly affect JS and OC but was mediated by POS. LMX can also be a mediator and moderator of the relationship model.

Practical/managerial implications: This study emphasises the need to minimise the differences between in-group and out-group in the leaders-followers relationship to improve employee performance. Leaders must expand the range of their relationships with followers to improve work outcomes.

Contribution/value-add: This study examined LMX as an important predictor of work outcomes with clearer mechanisms. LMX cannot be a predictor if employees do not feel the leader’s support as a representative of the organisation.


Keywords

leader-member exchange; perceived organisational support; job satisfaction; organisational commitment; collectivistic culture

JEL Codes

J53: Labor–Management Relations • Industrial Jurisprudence; J81: Working Conditions; M12: Personnel Management • Executives; Executive Compensation

Sustainable Development Goal

Goal 10: Reduced inequalities

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