Leader-Member Exchange as a Mediator in the Relationship between Benevolence Value and Leader Effectiveness: An Insight into the Hotel Industry of Bali

Abstract

Manuscript type: Research paper.
Research aim: Some studies indicate that benevolence value directly
affects leader effectiveness while others argue for the potential of the
leader-member exchange (LMX) as a mediator. Aiming to delineate
the mechanism of benevolence value and its influence on leader
effectiveness, this paper specifically investigates the mediating role
of the LMX on the two elements.
Design/ Methodology/ Approach: A survey is conducted on 131
leader-subordinate pairs who are from the hotel industry in Bali. The
scales measuring the outcomes are adapted from previous studies
and they carry strong reliability scores of between .78 to .95. The
regression analysis is then used with the PROCESS to obtain results.
Research findings: Results indicate that the relationship between
benevolence value and leader effectiveness is fully mediated by the
LMX.
Theoretical contribution/ Originality: This research contributes to
the body of literature by suggesting that: (1) the impact of benevolence
value only occurs if subordinates perceive and feel a good
relationship with their leaders; and (2) the degree of importance of
LMX as a powerful mediator between leaders’ values and positive
outcomes depends on its context.
Practitioner/ Policy implication: This study highlights the importance
of leaders to pay prime attention on their relationship with their subordinates, in order for their subordinates to understand and
feel the leaders’ concerns for them and thus become more motivated.
This effort is especially important in the service industries, such as
the hotel industry, in vertical-collectivistic culture.
Research limitation: In addition to the usual restraint of cross section
design, the impact of this study is limited by its focus on only a
single value (benevolence) from Schwartz et al.’s (2012) ten values.
Keywords: Benevolence Value, Indonesia, Leader Effectiveness,
Leader-Member Exchange, Vertical-Collectivistic Culture.
JEL Classification: L20