Organisational Behaviour Report: Conflict, LMX, and Ethical Leadership

This research study investigates the problem of relationship conflict in organizations, focusing on the connection between Leader-Member Exchange (LMX) differentiation and team conflict. The study also examines the moderating effect of ethical leadership on this relationship. Using questionnaires administered to 79 teams in Shenzhen, China, the research explores how LMX differentiation, stemming from leaders' varying relationships with subordinates, can trigger social comparison processes and subsequently increase conflict. The study's findings suggest a direct link between LMX differentiation and relationship conflict, with ethical leadership playing a significant role in mitigating this effect, especially when ethical leadership is low. The research highlights the importance of ethical leadership and its impact on team dynamics, providing insights into conflict management strategies and the role of leaders in fostering positive work environments. The study's limitations include common method bias and a cross-sectional design, recommending future research to address these shortcomings and further explore the relationship between ethical leadership, LMX, and team conflict.

Organisational behaviour

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Problem discussed in Research Article
Relationship conflict refers to work-related conflicts arising among superior and subordinates n
the organization and is prevalent in existing organizations. Various researches have shown that it
is harmful to every individual and groups which are involved in the conflict. It has emerged that
relationship conflict has negative impact on the performance, behavior and team effectiveness
(Simons and Peterson, 2000). Leader-Member Exchange Theory gives an effective framework in
understanding superior-subordinate work relationships. The purpose of this research study is to
expand the understanding of leader’s role in the management of relationship conflict in the team.
This research study focuses on broadening the knowledge and impact of relationship conflict on
the team.
Hypothesis formulated in the article
H1. LMX differentiation will be positively related to team relationship conflict.
H2. Ethical leadership will moderate the relationship between LMX differentiation and team
relationship conflict, such that the relationship will be stronger when ethical leadership is low
rather than high.
Importance of the study
The need for studying the relationship conflict is important so that people can stop repeating
detrimental patterns in the team or group they are working. Conflict is an inevitable, natural part
of communication. In an organization, management and study of conflict are significant. For
employees, it is necessary, as they can learn how to come along with colleagues, manager, and
rest of the public. If we talk about superior or supervisor, he/she can see the emerging conflicts,
can get cooperation from the employees, and can help in resolving conflicts amidst each other

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and help in constraining personal conflicts from spreading in other departments. When a number
of people work together, it is natural to arise conflicts, and it is unavoidable. Various issues that
result in conflict should be constrained, so that emergence of big conflict can be prevented at the
right time. Organizations are run for earning profits. The productivity of the organization will
decrease when employees are continuously involved in criticizing and fighting with each other.
Leaders should ensure that various roles and responsibilities are clearly communicated to each
employee, and they should be demotivated for interfering other work. Conflict management
helps in avoiding conflicts to a large extent and therefore leads to the reduction of tension and
stress among employees.
Methodology used in the study
In the research article, data has been collected using questionnaires. The sample consists of 79
teams of 16 firms situated in Shenzhen, China. Questionnaires were put into an envelope and
were given to the respondents, with a letter explaining the purpose of study and confidentiality of
survey process. Participants filled up the questionnaire and returned them in envelopes to the
researchers and respondents received ¥ 20 in return as a reward. 350 employees from 80 teams
participated in this survey, and all questionnaires were filled. Finally, 334 samples from 79 teams
were obtained. The majority of the sample size consists of male, and 59% of them are in twenties
age group. Mostly widely used scales have been used to measure the variables in this study.
Responses to the questions in the questionnaire are measured on 5 point scale (5 strongly agree
to 1 strongly disagree). LMX differentiation has been calculated by the usage of the standard
deviation of members rating for LMX. Seven point measure coined by Graen and Uhl-Bien has
been used to analyze LMX (Graen and Uhl-Bien 1995).

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Literature Review
The impact of LMX differentiation on relationship conflict of the team consists of tension and
personal disagreements between the team members and generally described with negative
feelings like distrust, anger frustration and fear (Jehn, 1995). Therefore man-made differences
between the members of the team, viz. differences in quality of LMX in this study, have also
been related to relationship conflict of the team. LMX differentiation is constructed at the group
level, which is referred to “a set and outcome of dynamic and interactive exchanges that occur
between leaders and members” (Henderson et al., 2009). Previous research provides that another
individual in a social group acts as reference point and basis for social comparison (Brown et al.,
1992). Social comparison refers to the process of analyzing and thinking about information more
of other individuals as compared to self, consisting upward, parallel and downward comparison
(Wood, 1996). Ethical leadership is referred to as a demonstration of a proper code of conduct
via actions of personal nature and interpersonal relations, and promotions likely conduct via two
faced communication, decision making and reinforcement (Brown et al., 2005). Ethical leaders
pay attention to ethics not only regarding themselves, but side by side provides juniors
employees with voice, a procedure or interpersonal process, and set ethical standards for the
regulation of the behavior of subordinates. High levels of ethical leadership have been forecasted
and will increase the positive effect of LMX differentiation. The literature on LMX provides for
that relationship of LMX starts developing from the very first interaction among the subordinates
and leaders, and is it also came to know through literature that subordinates cannot enhance their
LMX without the intervention of their leaders (Dienesch and Liden, 1986).

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Limitations and potential for future research
One of the limitations of this study is that it have common method bias. In this study,
relationship conflict, LMX differentiation, and ethical leadership were reported by employees
everywhere. Techniques have been used to reduce the effect of common method bias in the
study, but it may still have some effect on the study. Secondly, arguments of the study largely
rest on social comparison theory, and no theoretical variables are included in the theoretical
model. In future studies, if social comparison variables are introduced and mediated moderation
model is examined, and if the models are supported, then arguments of the study will become
much more convincing. Cross-sectional designs of the study could not validate mobility
proposed in the study and thereby weakens explanations of the study. Future studies should use
longitudinal designs and should analyze mobility of LMX for effective understanding of effects
of mobility of LMX on team conflict. In this study, ethical leadership has been found relating
negatively to relationship conflict, thereby researchers in future can investigate relations amidst
relationship conflict and ethical leadership.
Conclusion
In this research study, a direct relation between relationship conflict and LMX differentiation
have been found; possible reasons can be explained by the social comparison theory and LMX.
Differentiation done by the leaders leads to various levels of LMX relations amidst the group and
can lead to the start of social comparison processes and thereby increase conflict in that group. In
addition to this, formulation of subgroups a lead to serious conflicts among the group and out the
group. There is the mediating effect of ethical leadership in the relation between LMX

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differentiation and team conflict. This mediating effect is even stronger when ethical leadership
is low instead of high.
Analysis
Theory of Leader-Member Exchange provides with a very good framework for the
understanding of superior and subordinate work relations. According to this theory, leader
distinguishes among their subordinates, which results in high exchange relation with some and
low exchange relation with the others. Leaders formulate distinguished relations with their
subordinates. It is surprising that no study till date has researched about the relations among
relationship conflict and differentiated LMX. LMX differentiation starts a social comparison
process inside the group and leads to conflicts. In this context leaders needed to be blamed. But
this not all. With the integration of theory of ethical leadership along with the LMX, it is argued
ethical leadership affects team conflict and acts as a buffer in the relationship. Leader-Member
Exchange can result in an efficient leadership. If Leader-Member Exchange functions properly in
leadership, then everybody enjoys their work and gets motivated to perform tasks. Keeping each
member of the group informed and treating them equal, results in the negotiation of their roles
and increases trust among group members and leader. It also increases the morale of the team
members, sometimes in the worst situations that can be imagined. Subordinates get a sense of
loyalty towards their leader and even gets ready to go beyond their job description. It becomes a
productive and enjoyable experience, for all including the leader and leads to better capacities as
everyone pushes others to be a better version of themselves. When leader-member exchange
goes wrong, and leader has high-quality exchange with some and low exchange with the others
then out the group and in group conflicts emerges. Out-group members feel dejected and get the
feeling their work being overlooked. Resentment and jealousy take place in the out-group

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members, which results in direct conflicts amidst the in the group and out the group. In the out
group leader is only respected out of the authority in the organization. In this direct study relation
between LMX differentiation and relationship conflict have been found.
Ethical leaders pay their attention to ethic themselves and give subordinates voice their
problems. They set standards for regulation of the behavior of subordinates in addition to this
they take care of consequences of a decision made. The positive impact of LMX differentiation
is increased with high level of ethical leadership. Ethical leaders pay more of their attention to
procedural justice which tends to weaken psychology of group members for social comparison.
Leaders who give more importance to procedural justice can respond positively to employees in
order to improve goodwill of their LMX relations and to allocate their resources. When
comparison of superior others is done with low exchange relations they will try best for
improving LMX relations, self-evaluation and self-identity will not be weakened in ascending
comparison. Subordinates of high exchange do not get too much delighted for their superiority in
descending comparison and may feel alerted at the thought of low exchange relation. The overall
boundary between in group and out group team members will undermine and get vague, and
processes of comparison and relation will not get started further. In this study, it has been found
that ethical leadership tends to decrease the moderating effect on LMX when done properly and
increases when ethical leadership is not strong.
Summary
This research study focuses on the problem of relationship conflict that is prevalent in
organizations. It tries to analyze the relation between LMX differentiation and team conflict.
Beside it also focuses on the impact of ethical leadership on the relationship among the two i.e.
LMX differentiation and relationship conflict. A significant limitation of the existing literature is

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that most of the studies have taken the only perspective of team members for analyzing effects of
relationship conflict. In order to address the existing gap in the literature, this research paper
focuses on analyzing team conflicts from the perspective of the leader and developing a model
that takes into consideration roles of leadership. One of the hypotheses formed in this study is
differentiated LMX is to be related positively to relationship conflict. The second hypothesis
formed in this study is moderating effect of ethical leadership between LMX differentiation and
relationship conflict, such that relationship, to access relationship when it is stronger when
ethical leadership is low rather than high. Questionnaires have been used to collect data in this
study. Sample size 79 teams of 16 firm in Shenzhen, China. The majority of respondents have
earned a secondary school degree, and half of the participants are married. Mostly used scales
have been used to analyze the data in this study. To analyze relationship conflict, 3 frequency
sub scales have been utilized from Jehn (1995). Mean of the group, size and other 3 demographic
variables viz. gender, age, and education have been analyzed as control variables as previously
done research have shown that team of size is positively related to the conflict. This gives the
conclusion that LMX is related to the conflict in negative terms (Boies and Howell, 2006). Blau's
index has been used in this study to analyze diversity on self-introduced demographic variables
viz. gender, age and level of education Blau’s (1987). This research study consists of various
limitations, future researchers needs to do in-depth research of the role of leaders in the
management of relationship conflict. One of them is common method bias, which has been tried
to control. Secondly, arguments of the study largely rest on social comparison theory, and no
theoretical variables are included in the theoretical model. Cross-sectional designs are not able to
provide mobility as proposed in the study which weakens explanation of the study. New models
can be developed in future for better understanding of leader’s role in team conflict. It has been

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concluded from this research study that there is the positive relation between relationship conflict
and differentiated LMX. Differentiation on the part of leaders leads to conflict among the team
members. It has been found that there is very less effect of ethical leadership on the relationship
between LMX differentiation and relationship conflict.

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