Exploring work unit context and leader–member exchange: a multi‐level perspective

Leader–member exchange relationships have rarely been explored within the context of the work unit. Employing a sample of 285 employees of a southeastern county library system, the work unit contextual factors of work group size, work group cohesiveness, organizational climate, and leader power were examined for their relationship with LMX from the subordinate's perspective, using a within and between analysis (WABA) approach. All of the contextual variables except size were significantly related to LMX. The WABA and r_WG analyses revealed that effects occurred at both within‐ and between‐group levels, indicating individual difference effects. Thus, practitioners should emphasize enhancements to group and organizational processes as well as contributions toward relationship building in LMX dyads. Future research should expand the network of contextual variables that may have potential relevance with LMX, since this study demonstrated that the work context in which the dyad resides contributes in part to the LMX phenomenon. Additional study of the work unit size and LMX relationship is also warranted, as the current research failed to replicate previous research with a predicted negative relationship. Copyright © 2000 John Wiley & Sons, Ltd.