Leader-member exchange and resource accessibility of subordinates : Perception towards MNC global integration strategy

Purpose – The purpose of this paper is to develop a framework for leader-member exchange (LMX) in the context of global integration strategy of multinational corporations (MNCs). Further, an interaction effect of leader's network centrality and leader's alignment with MNC policies on LMX and resource accessibility is proposed. Design/methodology/approach – The paper begins with the notion that different departments in a subsidiary of an MNC are likely to have different requirements for integration within the MNC network. This paper extends the literature by suggesting that employees working in the same department of a subsidiary of an MNC are likely to have different perception of the degree of integration of their subsidiary with other nodes in the MNC network. Findings – The paper posits that employees forming the “in-group” of a subsidiary leader are more likely to perceive their subsidiary as more integrated than the “out-group” employees; contribute more by way of knowledge transfer than the “out-group” employees; and perform better than the “out-group” employees, because of the moderating effect of leader's network centrality on the relationship between LMX and resource accessibility. Research limitations/implications – The research has implications for the role of subsidiary leaders in shaping the perceptions of their subordinates toward the global integration strategy of an MNC. Originality/value – The study fills a gap by integrating the LMX and MNC global integration strategy literatures and proposing the existence of perceptual differences, even at subordinate level.