The Application of Leader-Member Exchange Theory on Improving Team Performance

Abstract

Based on the literature review of Leader-Member Exchange theory (LMX) and Team Performance (TP), this paper proposes a model between LMX and TP, taking into consideration Team Cohesion (TC) operating as the mediator. To test this model, an empirical study was conducted in different industries, including IT, manufacturing and others in China. Data processing results indicate that LMX has positive influence on TP. Composite test procedures were performed to distinguish the mediator from moderator, showing that TC partially mediates the influence of LMX on TP. The results of this study suggest that building high LMX is an effective and credible method in improving TP.