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AbstractPurpose -Demographically similar individuals often believe they are similar, in spite of the differences in values, beliefs and expectations. However, dissimilar dyads experience will encounter more interpersonal difficulties due to misunderstandings, misperceptions and conflicts of interest. The purpose of this paper is to investigate the impact of leadership expectation gap on LMX quality and the moderating role of ethnic and nationality dissimilarity between manager and their superior on the relationship between leadership expectation gap and LMX quality. Design/methodology/approach -This study adopted a quantitative research design. A purposive sampling survey of 137 lower-to middle-level managers working under the supervision of Malaysian and Japanese superiors in Japanese multi-national corporations was conducted to test the hypotheses of this study. Findings -The study found the following: leadership expectation gap has a significant and negative effect on LMX quality; and ethnic dissimilarity and nationality dissimilarity moderates the relationship between leadership expectation gap and LMX quality. Practical implications -There is a need for a comprehensive training programme for both leaders and followers, towards developing their interpersonal skills on how to work better and more effectively in the workplace. Furthermore, prior to the start of the expatriate assignment, organisations can help expatriate superiors to adapt themselves by providing pre-departure and cross-cultural training. Originality/value -This paper addresses an important and not so well researched issue. It analyses the moderation effect of ethnic and nationality dissimilarity between manager and their superior on the relationship between leadership expectation gap on LMX quality in the Malaysian context.