Trust and leader--member exchange: a closer look at relational vulnerability.

Trust in work relationships is an intriguing topic in leader--member exchange (LMX) research, however, previous LMX studies examined trust as unidimensional. Research on LMX has yet to explore the multidimensional nature of trust and how different dimensions may affect LMX quality. This study with 228 full-time employees explores the effect of different trust dimensions on LMX relationships. It is interesting that LMX quality was positively related to identification-based trust as well as calculus-based trust, which involves calculative exchanges. Results found support for a nonlinear association between calculus-based trust and LMX. Thus, contrary to expectations, trust appears to be vulnerable even in high-quality LMX relations.

Keywords: leader--member exchange; LMX; social exchange; trust

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More than four decades ago, leadership research began to challenge the existence of an average leadership style (Fleishman & Harris, 1962; Likert, 1967; Schriesheim & Stogdill, 1975; Taylor & Bowers, 1972). These studies indicated that leaders differentiate among followers rather than enacting one leadership style with all members (Dansereau, Graen, & Haga, 1975; Graen, 1976; Graen, Liden, & Hoel, 1982; Graen & Schiemann, 1978). When employees were asked to describe their relationship with their boss, different employees reported varying views of the same manager. Some employees reported high-quality exchanges characterized by a high degree of mutual trust, respect, and obligation (in-group). Others reported low-quality exchanges with their manager, where the employee fulfills job description requirements but contributes nothing extra; the relationship remains within the bounds of the employment contract (out-group) (Graen & Uhl-Bien, 1995).

These early studies led to the development of leader--member exchange (LMX) research, which posits that supervisor--subordinate relationships fall along a continuum ranging from low-quality, in which the relationship is based strictly on the transactional part of the employment contract, to high-quality relationships based on mutual liking, trust, obligation, and respect (Dienesch & Liden, 1986; Graen & Scandura, 1987; Graen & Uhl-Bien, 1995). More than 30 years of research repeatedly linked LMX quality to a wide range of work outcomes including promotion, turnover, organizational commitment, job satisfaction, citizenship behaviors, willingness to contribute, performance, and trust in supervisor (Dulebohn, Brouer, Bommer, Ferris, & Kato, 2008; Gerstner & Day, 1997; Ilies, Nahrgang, & Morgeson, 2007; Liden, Sparrowe, & Wayne, 1997).

Despite the fact that research on trust is essential to a deeper understanding of LMX relationships, previous research on LMX examined trust as a unidimensional construct, and research has yet to examine different trust dimensions in the context of LMX relationships. Essentially, researchers have suggested that high-quality LMX relations involve high levels of interpersonal trust, which carries the relationship beyond the formal employment contract (Bauer & Green, 1996; Dienesch & Liden, 1986; Uhl-Bien, Graen, & Scandura, 2000). Therefore, prior research primarily studied LMX as a social exchange relationship involving high levels of affective interpersonal trust. However, in social exchange relationships, social transactions may coexist with economic transactions (Cropanzano & Mitchell, 2005). Accordingly, high-LMX relationships may also involve a transactional (i.e., calculative) component, which may render trust to be vulnerable even in high-quality exchange relationships (Uhl-Bien, 2007).

Trust is a construct that has received broad attention in social sciences including psychology, sociology, political science, and economics (see Gambetta, 1988; Lewicki & Bunker, 1995; Lewicki, Tomlinson, & Gillespie, 2006, for reviews). In the context of organizations, research on trust has proliferated, which was reflected a decade ago in a 1998 special issue of Academy of Management Review on trust in work relationships. Furthermore, there are two recent metaanalyses on trust in organizations that found trust in manager to be positively related to job performance and organizational citizenship behavior and negatively related to counterproductive work outcomes, such as intention to quit the organization (Colquitt, Scott, & LePine, 2007; Dirks & Ferrin, 2002).

Although trust is critical to the success of professional relationships, little effort has been made to synthesize research on trust to advance LMX theory. A number of recent studies examined the association between trust and LMX and found support for a significant and positive association (Dulebohn et al., 2008; Gomez & Rosen, 2001; Wat & Shaffer, 2005). However, there is still a considerable lack of agreement among LMX researchers with regard to whether trust is an antecedent or a consequence of LMX quality. Some studies examined trust as an antecedent of LMX (Dulebohn et al., 2008; Gomez & Rosen, 2001), whereas others studied it as an outcome of LMX (Wat & Shaffer, 2005). Thus, research integrating trust and LMX literatures is timely and warranted.

LMX has been defined as a trust-building process that develops fairly quickly and remains stable over time (Bauer & Green, 1996; Graen & Cashman, 1975; Liden, Wayne, & Stilwell, 1993). This definition considers trust to be a unidimensional construct (Graen & Uhl-Bien, 1995). However, trust in work relationships is multidimensional and its meaning cannot be captured by a single, static definition (Brower, Schoorman, & Tan, 2000; Dirks & Ferrin, 2002; Lewicki & Bunker, 1996; Shapiro, Sheppard, & Cheraskin, 1992). Different forms of trust may have different influences on the development of work relationships (Shapiro et al., 1992). However, previous research on LMX has overlooked the multidimensional nature of trust.

In high-quality LMX relations, the leader engages in risk-taking behaviors such as delegation and empowerment (Bauer & Green, 1996; Schriesheim, Neider, & Scandura, 1998). According to Brower et al. (2000), the amount of risk taken is related to the level of trust the leader has in the employee. Despite the importance of trust in LMX, empirical research has only recently begun to integrate the two literatures (Mitchell & Uhl-Bien, 2004). In addition, previous LMX research studied trust as unidimensional, which has delayed a more in-depth study of the role of trust in exchange relations. However, to advance LMX theory, it is essential that research examines the effects of different trust forms on relationship quality. Thus, the primary goal of this study is to explore the relations of different trust dimensions with the quality of LMX relationships. An examination of trust as a multidimensional construct may help provide much-needed inquiry into the LMX literature concerning the role of trust in LMX relations.

First, we provide a brief introduction to the LMX literature. Next, we integrate the existing LMX models with the current literature on trust in business organizations. Finally, we test hypotheses derived from our model with a sample of 228 full-time employed professionals.

LMX Models

LMX theory articulates the development of a work relationship between the supervisor and the subordinate. LMX researchers proposed various models of this process (Dienesch & Liden, 1986; Graen & Scandura, 1987; Graen & Uhl-Bien, 1995). Graen and Scandura's (1987) role-making model described LMX as comprised of three phases: role-taking, role-making, and role-routinization. In the role-taking stage, the leader makes a request or assigns a task and evaluates the member's behavior and performance to assess the underlying motivation and potential. This phase corresponds to the first step in Dienesch and Liden's (1986) model in which demographic characteristics and personalities may influence the initial interaction between the two parties (due to limited information early in the relationship). Role-making is the continuation of the developmental process where the nature of the leader--member relationship becomes more defined. It is at this stage that managers and subordinates begin to cement the relationship (Bauer & Green, 1996). The leader provides an opportunity to the member by assigning an unstructured task. If the member accepts that opportunity, the relationship continues to develop into a high-quality exchange relationship (Liden et al., 1997). The third stage is role-routinization. At this point, leader and member develop a common understanding and clear mutual expectations. The behaviors of the leader and member become interlocked (Graen & Scandura, 1987) and the quality of exchange typically remains stable after this phase (Liden et al., 1997).

Although the role-making model has traditionally formed the basis of LMX research, more recent work has proposed the leadership-making model (Graen & Uhl-Bien, 1995). The LMX relationship in this framework begins with the stranger phase. The leader and member occupy interdependent organizational roles and begin interactions. They interact on a formal basis, which Graen and Uhl-Bien (1995) refer to as a "cash-and-carry" economic exchange. The model characterizes the stranger phase as low-quality LMX because of the absence of caring and commitment (Liden et al., 1997). In this phase, once an offer for an improved work relationship through career-oriented exchange has been accepted by both members, the dyad can then move to the acquaintance phase. In the acquaintance phase, leader and member begin to share greater information both on a personal level and work level. This is a critical stage because dyads that do not develop may revert to the stranger phase (Graen & Uhl-Bien, 1995). The next stage is referred to as mature partnership, in which the exchanges are not only behavioral but also emotional. The members count on each other for loyalty and support, and mutual trust, respect, and obligation also grow throughout this process. Leaders count on their followers to provide them with assistance whenever needed, and followers rely on their leaders for support, encouragement, and career investments. The leadership-making model refers to this stage as mature partnerships because it reflects high-quality LMX (Graen & Uhl-Bien, 1995).