Career Development International

Leadership style and employee turnover intentions: a social identity perspective

Zhiqiang Liu Zhenyao Cai Ji Li Shengping Shi Yongqing Fang
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To cite this document:
Zhiqiang Liu Zhenyao Cai Ji Li Shengping Shi Yongqing Fang, (2013),"Leadership style and employee turnover intentions:
a social identity perspective", Career Development International, Vol. 18 Iss 3 pp. 305 - 324
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Leadership style
Leadership style and employee and employee
turnover intentions: a social intentions
identity perspective
305
Zhiqiang Liu
School of Management, Huazhong University of Science and Technology, Received 15 September 2012
Wuhan, China
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Revised 15 December 2012

21 March 2013
Zhenyao Cai and Ji Li Accepted 26 March 2013
Department of Management, School of Business Administration,
Hong Kong Baptist University, Kowloon, Hong Kong
Shengping Shi
Department of Logistics & Marketing, College of Economics and Management,
Southwest University, Chongqing, China, and
Yongqing Fang
School of Management Studies, University of Canberra, Canberra, Australia

Abstract
Purpose The purpose of this research is to study how an approach of culturally-specific human
resource management (HRM) should moderate the relationship between leadership style and employee
turnover.
Design/methodology/approach Questionnaire data were collected from firms in both Shenzhen
and Hong Kong. The subjects are 190 leader/member dyads (111 (58 percent) were from mainland
China (i.e. Shenzhen), and 79 (42 percent) were from Hong Kong). Hierarchical regression model is
adopted to test the hypotheses.
Findings Collecting empirical data from firms in different regions of China, it was found that a
leadership style, i.e. leader-member exchange (LMX), can have a significant effect on employee
turnover. Moreover, the effect of LMX can be moderated by the C-HRM-oriented HRM (C-HRM)
approach. The paper concludes with a discussion of the implications of the findings to academic
researchers and practitioners. There exist both the direct effect and interactive effect of LMX on
employees organization identity, which in turn affects their turnover. Moreover, collectivism-oriented
HRM (C-HRM) moderates the relationship between LMX and employees organization identity. Other
conditions being equal, the higher the C-HRM, the stronger is the positive relationship between LMX
and organization identity.
Originality/value Integrating prior research on LMX, C-HRM, organization identity and employee
retention, this study examines the relationships among LMX, organization identity and employee
retention. This is the first study testing these relationships. The findings have several important
implications. For instance, this study documents both the direct and moderating effects of C-HRM on
employees performance for the first time, which will be helpful for the development of new studies on
human resource management and cross-cultural management.
Career Development International
Keywords Leadership, Employees turnover, Human resource management, China, Vol. 18 No. 3, 2013
Leader-member exchange, Collectivism-oriented HRM, Organization identity pp. 305-324
q Emerald Group Publishing Limited
Paper type Research paper 1362-0436
DOI 10.1108/CDI-09-2012-0087
 CDI The perspective of social identity has been shown to help illuminate the motivational
18,3 basis of individual behaviors (Ashforth et al., 2008; Blader and Tyler, 2009; Olkkonen
and Lipponen, 2006; Riketta, 2005; Tyler and Blader, 2000; Van Knippenberg and
Ellemers, 2003). According to this perspective, organizational identification can
influence such performance outcomes as extra-role behaviors, creativity, and intention
to leave (Blader and Tyler, 2009; Hirst et al., 2009; Riketta, 2005). Based on this
306 perspective, we study the relationship between leadership style, organizational
identification, and employee turnover intentions. Specifically, in this study, we focus on
a specific leadership style, i.e. leader-member exchange (LMX) and test its relationship
with organizational identification, and employee turnover intentions.
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In spite of the plentiful research on leadership style, the relationship between LMX (as
the leaders perception) and organizational identification remains unclear. The boundary
condition of the relationship is particularly unclear. For example, cultural differences may
make the relationship inconsistent in different countries. Insufficient research has been
done on these issues. Addressing the research gaps, the first objective of this study is to
examine the direct effect of a leadership factor, i.e. LMX, on organizational identification,
and the second objective is to test the effect of a culturally specific human resource
management system (collectivism-oriented human resource management (C-HRM)), on
the relationship between the leadership factor and organizational identification. Figure 1
presents a schematic representation of the relationships this study examines.
This study can make several significant contributions. In terms of theory, this study
enriches the HRM literature by testing the moderating effects of C-HRM on the relationship
between leadership and employee turnover intentions, which has not been sufficiently
tested so far. In addition, this study will contribute to social identity theory (Ashforth et al.,
2008) by providing more empirical evidence from emerging economies on the relationships
among LMX, C-HRM, organizational identification, and employee turnover intentions.
In terms of real-world practice, the findings of this study can help practitioners
understand the effects of LMX and C-HRM on employee turnover intentions. This
understanding should help improve employees career development and reduce
employee turnover. In addition, this study is conducted in China, a major emerging
market. The empirical evidence from this study should help managers of international
firms improve career management among their employees in emerging economies.
In the rest of this paper, we first provide a brief review of the literature. After that,
we propose theoretical models with hypotheses for empirical testing. Finally, we report
an empirical study in Hong Kong and Shenzhen, two Chinese cities that differ in
C-HRM.

Figure 1.
How LMX helps reduce
employees intention to
leave a conceptual
model
 Theoretical background Leadership style
Organizational identification influenced by leadership and employee
Organizational identification refers to a process in which employees internalize their
relationships with their organization (Sluss and Ashforth, 2007). The theory of intentions
organizational identification covers both the construct of a noun (identity) and the
construct of a verb (identify) (Albert et al., 2000, p. 13). These two constructs help
understand individuals social identity, which locates individuals in a certain social 307
environment. Consistent with this perspective, Tafjel (1978, p. 63) defines social
identity as a part of an individuals self-concept that derives from her/his knowledge of
her/his membership in a group/organization together with the value and the emotional
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significance attached to that membership. It is through the process of social

identification that individuals perceive a sense of oneness with or belongingness to a
group (Ashforth and Mael, 1989). This sense of oneness enables individuals to perceive
themselves in terms of the characteristics they share with other members of that group,
as opposed to their unique attributes, which differentiate them from others. This
process is made possible through self-categorization. Researchers have argued that
individuals subjective sense of self can be conceptualized at different levels of
abstraction, varying from the self as a unique individual to the self as a member of a
group (Turner, 1985).
Researchers have also argued that social identification in an organization
(organizational identification) is a form of depersonalized self-categorization such that
individuals merge their self-perception with that of the group and assume the
motivations and perceptions of individuals who share this self-identity (Hogg and
Terry, 2000; Turner et al., 1987). As a result, social identity provides a common prism
through which individuals perceive and interpret the world, and it provides the
motivational basis for behaviors that are oriented to serving the welfare of the group.
Such group-serving behaviors are motivated by individuals desire to enhance their
sense of self-worth, which is contingent on the status of the group and its perceived
value (Haslam and Ellemers, 2005; Tajfel and Turner, 1986).
Consistent with Turners (1982, p. 21) observation that social identity is the
cognitive mechanism which makes group behavior possible, organizational research
has embraced the tenets of social identity theory to account for the motivational basis
of much organizational behaviors (Ashforth and Mael, 1989; Dutton et al., 1994;
Riketta, 2005), including their intention to stay or leave a given group/organization.
From this perspective, the reason that individuals tend to be concerned about their
status within their groups and those who perceive themselves as enjoying a favorable
status will be motivated to stay so that they can maintain their favorable social
identities (Tyler and Blader, 2000).
As suggested above, one type of leadership style (LMX) may help ensure
individuals perceive themselves as enjoying a favorable status in their
groups/organizations. In other words, LMX may help reinforce individuals
favorable status as members in their groups/organizations. According to the
literature, LMX can be defined as a leadership style through which leaders build
dyadic and mutually supportive exchange relationships with their followers
(e.g. Dansereau et al., 1975). Empirical studies on LMX suggest that, because they
have limited time and energy, leaders do not treat all followers identically. In other
words, leaders usually have different types of exchange relationships with their
 CDI followers, ranging from high-quality to low-quality LMX relationships (Dienesch and
18,3 Liden, 1986; Liden and Maslyn, 1998). High-quality LMX relationships are
characterized by high understanding, trust, interaction, support, formal rewards,
and informal rewards (e.g. Dienesch and Liden, 1986), which lead to greater attention
and benefits (e.g. more resource allocation and more frequent promotions) from the
leader. In contrast, low-quality LMX relationships are characterized by task orientation
308 and mistrust (Dienesch and Liden, 1986). Unlike in high-quality LMX relationships,
followers in low-quality LMX relationships are reported to receive much less attention
and benefits from their leaders (Dienesch and Liden, 1986; Liden and Maslyn, 1998).
Based on prior research, it could be argued that LMX influences employee turnover
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intentions. One way in which LMX could influence employee turnover intentions is by
influencing employees organizational identification, which can be defined as a process
through which employees identify with the organization (e.g. Mael and Ashforth, 1992).
There are several reasons why LMX may reduce employees intention to leave. For
instance, according to the perspective of leader-follower contract and exchange, LMX
should help increase the positive psychological contract between leaders and their
followers. This positive psychological contract can be defined as a set of reciprocal
obligations that involve mutual expectations and influences (Coyle-Shapiro and
Kessler, 2000), which can help increase employees organizational identification.
Moreover, the contract and exchange between leaders and their followers may also
have a positive relationship with followers in-role performance (Detert et al., 2007).
In-role performance can result in more positive feedback from leaders, which can also
help increase followers identification with the organization.
LXM should also lead to better two-way communication between followers and
their leader. Better communication, in turn, should encourage employees to form
healthy follower-to-leader identities (Sluss and Ashforth, 2008). This identity, in turn,
should also have a positive relationship with organizational identification. In other
words, better communication gives followers more opportunities to understand and
participate more effectively in decision-making, which should increase their sense of
belongingness and their willingness to identify with their organization.
In addition, with high-quality LMX, employees should feel more support, trust, and
encouragement from their leaders, which should increase their pride in their
organizations (Dienesch and Liden, 1986; Liden and Maslyn, 1998). Similarly,
high-quality LMX may lead to a more favorable work atmosphere, in which employees
can work more efficiently and effectively (Parnes and Noller, 1972). This atmosphere,
in turn, can also increase their organizational identification. Based on these research
findings, we propose the following hypothesis:
H1. LMX has a positive relationship with employees organizational
identification.

Organizational identification and employee turnover

As mentioned above, organizational identification may have a negative relationship
with employees intention to leave their organization (e.g. De Hoogh and Den Hartog,
2008; Mayer et al., 2009; Piccolo et al., 2010). This is because organizational
identification can give members a sense of psychological and relational benefits
(Walumbwa and Hartnell, 2011). Accordingly, when individuals identify strongly with
their group/organization, they are likely to have a more cooperative spirit and higher
 motivation to maintain their membership in their organization (e.g. Ashforth and Mael, Leadership style
1989; Shamir, 1990). In addition, organizational identification can help build positive and employee
views and positive interpersonal relationships in an organization (Hinde, 1997), which
can, in turn, also help reduce employees intention to leave. Therefore, we propose: intentions
H2. Organizational identification mediates the relationship between LMX and
employees intention to leave.
309
The moderating effect of C-HRM
Finally, we predict the effect of C-HRM on the relationship among LMX, organizational
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identification, and employee turnover intention. Here we define C-HRM as a set of HRM
policy/practice stressing the cultivation of collectivism in organizations (e.g. Li et al.,
2011). Further, organizational collectivism can be defined as an organizational norm
and value that stresses the subordination of personal interests to the interests of a large
group or organization (Hofstede, 1980). Organizational collectivism (collectivism) has
been shown to have both direct and moderating effects on individual intentions and/or
performance (e.g. Hofstede, 1980; Hofstede and Bond, 1988). For instance, collectivism
is often responsible for more submissive individual behaviors in groups and
organizations. Individuals in highly collectivistic cultures are also more likely to act in
a manner appropriate to their positions in a hierarchical structure (Bond and Hwang,
1986). In addition, collectivism also has strong emphasis on maintaining harmony in
groups or organizations, even if that harmony is built on the oppression of individual
will and personal interests (Hofstede and Bond, 1988). As a result, individuals in highly
collectivistic cultures are inclined to be more restrained, cautious, patient, and
self-contained, as well as less impulsive, excitable, spontaneous, and natural than their
counterparts in individualistic cultures (Cheng, 1946; Hsu, 1949; Tseng, 1973).
Consistent with these characteristics of collectivism, studies have suggested that
collectivism should influence organizations in terms of how their members perceive
and interact with each other, how they approach decisions, and how they solve
problems (Hofstede, 1980; House et al., 2004; OReilly and Chatman, 1996; Trice and
Beyer, 1993). In organizations with high collectivistic value, the goals of individuals
and their organization are closely aligned, and their behaviors are guided by collective
norms and duties (House et al., 2004).
Authors have suggested that C-HRM helps cultivate collectivism on every
dimension of HRM, including recruitment, training, evaluation, reward, compensation,
and promotion (e.g. Li et al., 2011). For instance, as we mentioned above, firms with a
system high in C-HRM normally give rewards to teams rather than to individuals. In
employee training and development, firms with high C-HRM normally stress training
for improving teamwork rather than improving individual performance. Finally, in
employee assessment and promotion, firms with high C-HRM normally give priority to
those who can work well with other people in their teams or organizations. All of these
factors may, in turn, lead to more team solidarity, joint responsibility, and harmony
(Doney et al., 1998; Newman and Nollen, 1996; Yilmaz et al., 2005), which may make
LMX more effective.
In addition, C-HRM can also be linked to a collectivistic orientation of organizational
identification (for a review, see Brickson, 2007). Firms with a collectivistic orientation
should try to develop collective membership among their employees and emphasize
group-based practices, such as group induction and group bonding, which help
 CDI members feel that they are all in the same boat (Van Maanen and Schein, 1979, p. 233).
18,3 Consistently, a collectivism-oriented HRM system consistent with this identity
orientation should help increase common meaning, teamwork, team contribution,
team-based performance appraisals, and team-based rewards (e.g. Li et al., 2011).
Finally, with C-HRM, employees will be selected based on their commitment to
organizational mission and goals, and their career development should also be
310 influenced by the degree to which they accept the collectivistic organizational culture.
Regarding employees task performance, empirical studies have shown that
employees task intention/performance can be influenced by collectivistic
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organizational culture, which might be manifested by HRM policy/practices (Li et al.,

2011). Consistent with this view, some authors have pointed out that, under certain
conditions, C-HRM has a positive effect on individual and organizational performance.
For example, by encouraging the subordination of personal interests to the goals of a
large group or organization, C-HRM in East Asian societies may encourage sharing of
information and other resources, cooperation among members, and supportive
organizational practices among members (Yilmaz and Hunt, 2001). All of these factors
should help increase employees organizational identification.
Past research also suggests that the positive effect of C-HRM on individual or firm
performance may be especially strong when organizational culture and societal culture
are aligned (Li et al., 2011). The alignment between organizational culture and societal
culture should be able to positively influence individual and organizational
performance because it helps reduce the stress of firm managers and employees
( Joiner, 2001). In collectivistic societies, any management style incompatible with the
C-HRMs may harm the public image of the organization or make the organization lose
legitimacy (Ramamoorthy and Carroll, 1998). Research has also suggested that China
has C-HRM at the societal level (e.g. Hofstede, 1980; House et al., 2004). Accordingly, it
could be argued that, in collectivistic societies such as China, the higher the level of
C-HRM, the higher the alignment between cultural values at the societal and
organizational levels, which should strengthen the mediation effect of organizational
identification on the relationship between LMX and turnover intention among
employees. Therefore, we propose:
H3. C-HRM moderates the extent to which organizational identification mediates
the relationship between LMX and employees turnover intention:
Organizational identification is more likely to mediate the relationship
between LMX and employee turnover intention when C-HRM is higher than
when C-HRM is lower.
Figure 1 presents a model summarizing the hypotheses. It is first predicted that LMX
will have a positive relationship with organizational identification. In addition, it
predicts that organizational identification will mediate the relationship between LMX
and employee turnover intentions. Finally, the model predicts a first-stage moderating
effect of C-HRM on the relationship between LMX and employee turnover intention
through organizational identification. In other word, in this model, C-HRM functions as
a first stage moderator on the relationship between the independent variable and the
mediator, which, in turn, helps reduce employees turnover intension. In the rest of this
paper, we test this model as well as a model without the moderating effect of C-HRM.
 Methods Leadership style
Sample and employee
To obtain more variance in the measurement of C-HRM, this study collected data from
electronic firms in both Shenzhen and Hong Kong. There are reasons to suspect that intentions
these two Chinese cities differ in C-HRM. Specifically, while Hong Kong was a British
colony from 1842-1997, Shenzhen is a new Chinese city, with the majority of its
residents coming from other parts of China only after August, 1980 (when the Chinese 311
government decided to build its first Special Economic Zone). The population of
Shenzhen is about 15 million, while that in Hong Kong is about seven million. Research
has shown that Hong Kong is heavily influenced by the individualistic cultural values
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from the West and that Shenzhen is influenced more by traditional Chinese culture,
which the migrant workers bring from their hometowns in inland China provinces
(e.g. Li et al., 2011). Because of this difference between the Chinese cities, we expect
variance in C-HRM between firms in these two Chinese cities.
In this study, we visited the firms and interviewed 190 leader-follower dyads in their
work teams. In each of the dyads, we first asked the team leaders to respond to a
questionnaire assessing their LMX and other factors. After that, we asked the followers
to respond to another questionnaire assessing C-HRM, their organizational
identification, intention to leave the organization, and other factors. Of the
member-leader dyads, 111 (58 percent) were from Mainland China (i.e. Shenzhen),
and 79 (42 percent) were from Hong Kong. In terms of gender, 67 percent of the
participants were male, and 33 percent were female. The average age of participants
was 27.79 years (SD 8.60). For education, 27 percent had a bachelors degree or
above, and the average co-work tenure of the team member-team leader was 38.83
months (SD 43.57).

Measurements
To prepare scales and questionnaires, this study used the back translation method. All
scales were first translated from English into Chinese and then back into English. After
that, the translated version was compared to the initial version and revised until it was
very close to the original. Below we discuss all of the scales and measurements in this
study.

Independent variables
Leader-member exchange (LMX). LMX was measured with a seven-item instrument
adapted from that of Graen and Uhl-Bien (1995; see also Maslyn and Uhl-Bien, 2001).
We changed some words in the instrument so that it could be used by leaders. For
instance, one original item read, How well does your supervisor understand your job
problems and needs? We changed this item to How well do you understand this
followers job problems and needs? Our data showed that this instrument had a high
degree of reliability, with a Cronbachs alpha of 0.86. Because one leader may have
several followers in our sample, we used intraclass correlation coefficient (ICC) to
assess non-independence of supervisor ratings. ICC (1) for supervisor ratings of LMX is
0.04 ( p . 0.05). Thus, we have confidence to ignore the potential non-independence in
LMX data.
Because we measured LMX from leaders rather than from members, we conducted
confirmatory factor analysis (CFA) to test the descriptive and convergent validities of
 CDI the measure (see Appendix, Table AI). Moreover, we also interviewed several members
18,3 in our sample to test their perception of LMX with their leader. Comparing the scores
from the leader and those from the members, we concluded that they are consistent,
implying that the instrument has good face validity.
As mentioned above, team leaders responded to the items of LMX. Below we
discuss C-HRM and the dependent variables. Front-line employees (i.e. the followers)
312 responded to the items assessing C-HRM and the dependent variables.
C-HRM. C-HRM was measured with a scale from Li and colleagues (2011). This
scale consisted of six seven-point likert items assessing HRM policies and practices in
the firm. For example The pay and bonus system in this organization is designed to
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maximize collective interests (strongly disagree/agree) (see Appendix, Table AI). Our
data analysis later showed that this scale had high reliability (Cronbachs a 0.88).

Dependent variables
Organizational identification. Organizational identification was measured with a
five-item instrument adapted from Mael and Ashforth (1992). This instrument includes
items such as:
.
Working at my company is important to the way I think of myself as an
individual;
.
When someone from outside criticizes my company, it feels like an individual
insult; and
.
The place I work says a lot about who I am as an individual. Our data showed
that this scale had high reliability (Cronbachs a 0.91).

Intention to leave. Each team member responded to items in a scale assessing turnover
intentions, which was adapted from the Michigan Organizational Assessment
Questionnaire (see Cook et al., 1981). This scale measures team members intention to
leave their organization with three seven-point items rated from 1 (strongly disagree) to
7 (strongly agree), such as I will actively look for a new job next year. This
instrument had a high degree of reliability (Cronbachs a 0.77; three items).

Control variables
Based on the literature review, we controlled for a number of variables in our data
analyses: employee gender, gender congruence between the employee and leader, age,
education, and job tenure in the company. We also controlled for the effect of location
(i.e. Hong Kong or Mainland China).

Validation of measurements
Confirmatory factor analysis (CFA) was used to assess convergent and discriminant
validities of the measurement model, in which each questionnaire item loaded only on
its respective latent construct and all latent constructs correlated. The effective sample
size was 190. The four-factor model yielded an acceptable fit to the data
x2(98) 135.69, p , 0.001; RMSEA 0.045; CFA 0.97, TLI 0.97. We also ran a
one-factor model, which yielded an unacceptable fit x2 (104) 573.26, p , 0.001;
RMSEA 0.155; CFI 0.75, TLI 0.72. The CFA results support using all proposed
constructs to test the hypotheses (see Appendix, Table AI for more information).
 To test the discriminant validity of the measures, we conducted chi-square Leadership style
difference analyses for all of the constructs in pairs. This was done to determine and employee
whether the constrained model (correlation fixed at 1) was significantly worse than the
unconstrained model (correlation estimated freely). All chi-square differences were intentions
highly significant (e.g., environmental dimension versus social dimension: Dx2 8.99,
p , 0.01), which supported the discriminant validity (Gerbing and Anderson, 1988).
These results suggest that our measures have acceptable reliability and construct 313
validity.
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Data analysis and hypothesis tests

Table I presents the descriptive statistics. Several interesting correlations can be seen
among the variables, and the correlations of the main variables are in the expected
directions. For instance, employee tenure is positively correlated with organizational
identification (r 0.23, p , 0.01), demonstrating that organizational identification is
higher among employees with longer tenure.
To ensure that the regression estimates were not biased by multicollinearity, we
conducted variance inflation factor (VIF) tests. None of the regression models had a
VIF over 10, the recommended threshold (Gujarati, 2003). Based on this result, we
believe that multicollinearity does not bias the findings of this study. One reason that
multicollinearity is not a problem could be that the main independent and dependent
variables came from different sources.

Hypothesis tests
To test H1 and H2, we used hierarchical regression analysis. We first entered
organizational identification as the dependent variable and the control variables: firm
location, employee gender, gender congruence between the employee and the leader
(i.e. same gender), age, education, and job tenure in the company (Model 1). Next, we
entered the main independent variable (LMX; Model 2), which was followed by the
measure of C-HRM (Model 3). Finally, we entered the interaction between LMX and the
cultural value (Model 4).
Table II shows the regression results. LMX was positively related to organizational
identification (b 0.22; p # 0.01; Model 2). This result supports H1, which predicts a
positive relationship between LMX and employees organizational identification.
Table II also shows a positive effect of C-HRM. On the one hand, C-HRM is positively
related to employees organizational identification directly (b 0.22; p # 0.01;
Model 3). Simultaneously, this variable moderates the relationship between LMX and
employees organizational identification (b 0.32; p # 0.01; Model 4). Based on these
results, we argue that the effect of LMX on organizational identification is more likely
to be observed when C-HRM is high. These effects of C-HRM can be seen as a major
finding of this study, and we will discuss this finding in detail later.
To test H2, we used a similar regression approach. To test how LMX might
influence followers intention to leave, we first entered the turnover intention as a
dependent variable and the same control variables as before (Model 1). Then we
entered the main independent variable: (LMX, Model 2). Finally, we entered the
mediator (organizational identification, Model 3).
Table III shows the results of this regression analysis. LMX was negatively related
to their intention to leave (b 2 0.30; p # 0.001; Model 2). According to Model 3, LMX
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CDI
18,3

314

Table I.

correlations
deviations, and
Means, standard
Variables 1 2 3 4 5 6 7 8 9

1. Location (HK or Mainland)

2. Gender 0.25 * *
3. Age 0.58 * * 0.25 * *
4. Education 0.60 * * 0.14 * 0.59 * *
5. S-Gender or not 0.24 * * 0.14 * 0.32 * * 0.17 * *
6. Tenure 0.41 * * 0.30 * * 0.52 * * 0.39 * * 20.04
7. C-HRM 2 0.13 * 20.27 * * 0.25 * * 0.27 * * 0.17 * * 0.13 *
8. LMX 0.07 20.04 0.10 0.09 20.02 2 0.09 0.14 *
9. Organization identity 0.05 20.03 0.05 0.17 * * 20.08 0.23 * * 0.19 * * 0.16 * *
10. Turnover intention 2 0.03 20.03 2 0.01 20.13 * 20.02 0.14 * 20.22 * * 20.29 * * 2 0.58 * *
Mean 0.80 0.32 24.95 0.77 0.46 20.14 4.26 4.00 3.31
SD 1.28 0.12 8.45 0.72 0.50 19.29 0.68 0.72 0.90
Notes: n 458; *p # 0.05; * *p # 0.01
 Leadership style
Model 1 Model 2 Model 3 Model 4
and employee
Control variables intentions
Education 0.23 * * 0.20 * * 0.17 * * 0.14 *
S-Gender or not 20.14 * 2 0.12 * 20.12 * 2 0.11
Tenure 0.17 * * 0.19 * * 0.19 * * 0.17 * *
Firm location 0.03 0.03 0.03 0.07 315
Gender 20.04 2 0.03 0.02 0.04
Age 0.16 * 0.17 * 0.16 * 0.15 *
Independent variables
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LMX 0.22 * * 0.13 * 0.12 *

C-HRM 0.22 * * 2 0.09
Moderator
LMX C-HRM 0.32 * *
F-statistic 3.82 * * 3.94 * * * 4.71 * * * 5.23 * * *
R2 0.07 0.12 0.19 0.22 Table II.
DR 2 0.07 * * 0.05 * * 0.07 * * 0.03 * * The moderating effects of
C-HRM on the
Notes: *p # 0.05; * *p # 0.01; * * *p # 0.001 identification

Turnover intention
Model 1 Model 2 Model 3

Control variables
Education 0.09 0.06 0.04
S-Gender or not 20.03 20.01 2 0.02
Tenure 0.04 0.03 0.03
Firm location 20.10 20.09 2 0.09
Gender 0.00 0.00 0.01
Age 20.03 20.04 0.05
Independent variables
LMX 20.30 * 2 0.28 *
Mediator
Organization identity 2 0.28 *
F-statistic 1.71 4.17 * 5.78 *
R2 0.05 0.12 0.18 Table III.
DR 2 0.07 * 0.06 * The effect of organization
identity on turnover
Note: * p # 0.001 intention

was still negatively related to their intention to leave (b 2 0.28; p # 0.001) after we
entered the mediator (organizational identification, b 2 0.30; p # 0.001), which
implied it was a partial mediation effect. This result supports H2, which predicts a
negative relationship between organizational identification and employees intention to
leave.
After the regression analyses, we further tested our proposed model using
structural equation modeling (SEM) with LISREL 8.7. We first tested H1 and H2.
Figure 2 shows a model of the proposed relationships between the study variables
 CDI
18,3

316
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Figure 2.
Model excluding
moderator

without the moderator (C-HRM). The results indicated that the proposed model fit the
data well x2(98) 170.71, p , 0.001; RMSEA 0.063; CFI 0.94, TLI 0.93.
The path coefficients indicated that LMX was positively related to employee
organizational identification (b 0.28, p , 0.01), which support H1, and employee
organizational identification was negatively related to employee turnover intentions
(b 2 0.37, p , 0.001). In order to test full versus partial mediation effects, we
compared the current model with an alternative model. The full mediation effect would
be supported if the fit of the model was not significantly improved by adding a direct
path from LMX to employee turnover intentions. Otherwise, there would be a partial
mediation effect. As shown in Table IV, the alternative model (adding the direct path)
had a better fit than the baseline model x2(97) 160.95, p , 0.001; RMSEA 0.059;
CFI 0.95, TLI 0.94, suggesting a partial mediation effect of employee
organizational identification. We then conducted a Sobel test (see Sobel, 1982) to
further assess the mediating effect of employee organizational identification on the
links between LMX and turnover intentions. The results indicated that organizational
identification significantly mediated the links between LMX and turnover intentions
(z 2 2.60, p , 0:001), which supported H2.
To test the moderation effect of C-HRM, we created a single-item construct with the
procedure suggested by Mathieu and colleagues (1992). The path from a latent variable
to its corresponding observed variable (lambda) was calculated as the square root of
the reliability of the observed score. In addition, the random error variance (theta) was
calculated as one minus the reliability of the observed score times the variance of the
observed score (Mathieu et al., 1992). Then we tested the significance of the moderation

Model
Model fit indexes comparison
Models df x2 TLI GFI RMSEA Ddf Dx2

Full mediation model without interaction 98 170.71 0.93 0.94 0.063

Partial mediation model without interaction 97 160.95 0.94 0.95 0.059 1 9.76 *
Table IV. Full model with interaction 154 256.21 0.95 0.96 0.059 57 95.26 *
Summary of fit index
results Note: n 190; * p , 0.01
 effect by comparing the chi-square values for models including and excluding the Leadership style
interaction term. As shown in Table IV, the model that included the interaction term and employee
yielded a significantly better fit x2(154) 256.21, p , 0.001; RMSEA 0.059;
CFI 0.96, TLI 0.95. Figure 3 shows that the interaction term was positively related intentions
to organizational identification (b 0.34, p , 0.001), which supported H3.

Discussion and implications 317

Integrating prior research on LMX, organizational identification, and employee retention,
this study examines the relationships between LMX, organizational identification, and
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employee retention none of which has been sufficiently studied in East Asian societies.
With empirical data from Hong Kong and Mainland China, we found supporting evidence
for the hypotheses proposed in our theoretical model. For example, the results show that
the relationship between LMX and employee turnover intention through organizational
identification can be influenced by C-HRM in China. In other words, our data show both a
direct and indirect effects of LMX on employees organizational identification. This result
suggests that the effect of LMX is not limited to one culture. This finding is also
consistent with the evidence that the final results of our data analyses, as reported above,
are actually comparable with and without location as a control variable. Regardless of the
cultural differences between China and Hong Kong, the effect of LMX remains stable.
Moreover, the effect can be enhanced in organizations with a stronger C-HRM system.
The findings from this study make several contributions to the literature. First, for
the research on LMX and leadership, this study shows that the findings from past
research have external validity in East Asian societies. In other words, the results from
East Asian societies are consistent with those from the West. Insufficient research has
been conducted on the relationships between LMX, employees organizational
identification, and intentions to leave in East Asian societies. Our study helps provides
new empirical evidence on these relationships. In this sense, this study contributes to
the literature on international HRM and leadership theory.
Moreover, this study shows how employees organizational identification may
influence their intentions to leave. While past research in the hospitality industry has
tested several factors that influence employee retention (as discussed above), it remains

Figure 3.
Full model including
moderation effect
 CDI unclear whether leadership factors (such as LMX) affect retention. This study gives
18,3 empirical evidence that LMX is negatively related to employees intention to leave. In
other words, our data suggest that LMX by influencing organizational identification
can help reduce employees intention to leave.
Finally, more importantly, this study identifies some new important effects of C-HRM.
No past research has tested the consequences of culture on the relationships considered in
318 this study. Our results suggest, for example, that C-HRM can strengthen the relationship
between LMX and employees organizational identification. The higher the C-HRM in a
given organization, the more likely LMX will affect organizational identification. In
addition, C-HRM can strengthen the mediation effect of organizational identification on
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the relationship between LMX and employee turnover intention. With these new findings,
this study contributes to the literature on cross-cultural management. Since C-HRM is the
dominant cultural value in many countries (such as China, Japan, and Korea), it would be
helpful to understand better how this cultural value may moderate the relationship
between LMX, organizational identification, and employees intentions to leave.
The findings from this study have useful implications for both academic researchers
and managerial practitioners. For academic researchers and especially for researchers in
international HRM or cross-cultural management, our study suggests a new direction: the
interaction between LMX and C-HRM. As the data from this study show, these two
variables may have both significant direct effects and interactive effects on the
behavior/task performance of followers, such as their turnover. To fully understand these
effects, it would be helpful to conduct more future studies in this direction, which should
help further develop theory on international HRM and cross-cultural management.
For managers who are interested in the career development of their employees, the
findings of this study also have useful implications. This is especially true for
managerial practitioners of human resources in firms with C-HRM. Specifically, at least
in firms with C-HRM, it should be beneficial to adopt an LMX style to improve
employees organizational identification and reduce employee turnover intentions.

Limitations and future studies

The major limitation of this study is that the study was conducted in China only. As a
result, whether these findings are generalizable to other cultures remains unclear.
Future research should address this research gap by testing the same hypotheses in
other cultures, such as in Western cultures. In this way, we can understand better the
external validity of the findings on the relationships between LMX, organizational
identification, and consequent employee performance.
Moreover, the main dependent variable (employee intentions to leave) and the
mediator (organizational identification) were measured by asking the same respondent
in the same survey. Accordingly, the threat of common-method variance is still an
issue. Future studies may try to overcome this weakness by asking a third party, such
as another manager, to rank the organizational identification of each individual.
Although this approach may have problems of its own, it can help reduce the threat of
common-method variance.
Finally, the measure of LMX came from leaders only; employees perceptions of
LMX were not measured. This is a weakness because it is also important to test
whether the measure from a given leader and her/his subordinates are consistent.
Future studies should try to measure LMX from both sides.
 Conclusion Leadership style
Although our current study still has some limitations, it also obtains many interesting and employee
empirical data. Based on a social identity perspective, we first propose a moderated
mediation model showing the relationships among the LMX leadership style, intentions
organization identification, employee turnover and C-HRM system. To test this model,
we collect empirical data from both Shenzhen and Hong Kong, i.e. two cultural regions
in China. Our data analyses show a significant and positive relationship between the 319
LMX leadership style and employee turnover intention. Moreover, LMX is related to
employee turnover intention through organizational identification. Finally, as a stage 1
moderator, C-HRM, a culturally specific human resource management system,
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moderates that relationship between the leadership style and turnover. The above
relationships are further supported by the results from the structural equation models
(SEM) to test our hypotheses. Specifically, by comparing a full-mediation model and a
partial-mediation model with organizational identification as a mediator, we show
evidence supporting the mediating effect of organizational identification. Also, by
comparing models with and without the effect of C-HRM, we find evidence supporting
the moderating effect of C-HRM. As discussed above, all these findings have important
implications for future academic studies and managerial practice.

Acknowledgements
The authors gratefully acknowledge the very helpful comments from the journal editor
and the anonymous reviewers. The authors are also grateful for the financial support
of funding from the Chinese National Natural Science Foundation (nos 70972017 and
71272123), the HS Science Fund (no. 08JC630029, Ministry of Education of China), and
HK Baptist University (FRG2/12-13/031).

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 Appendix
Construct and source
LMX
(Graen and Uhl-Bien, 1995;
Maslyn and Uhl-Bien, 2001)
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C-HRM
(Adapted from Li et al., 2011
and House et al., 2004)
O. Identification
(Adapted from Mael and
Ashforth, 1992)
Intention to leave
(Adapted from Michigan
Organizational Assessment
Questionnaire (see Cook et al., 21. I will find a new employer in the near future
1981)
Note: All factor loadings are significant at p , 0.001
Leadership style
and employee
intentions
Standardized
Description F-loading
323
1. How well do you understand this followers job
problems and needs? 0.61
2. How well do you recognize this followers
potential? 0.78
3. How effective is your working relationship with
this follower? 0.81
4. How well do you maintain good working relation
with this follower? 0.69
5. Are you willing to use your authority to help this
follower solve problems? 0.86
6. Are you willing to use your authority to support
this follower at work? 0.89
7. Can this follower count on you to help when
needed? 0.79
8. The pay and bonus system in this organization is
designed to maximize collective interests 0.87
9. The assessment and promotion system in this
organization is designed to maximize collective
interests 0.89
10. In this organization, the majority of employees can
have long-term employment 0.78
11. In this organization, managers are mainly
promoted from inside the organization rather than
recruiting from outside the organization 0.79
12. In this organization, everyone is proud of collective
achievements 0.88
13. In this organization, managers encourage group
loyalty even if individual goals suffer 0.79
14. Working at my company is important to the way I
think of myself as a person 0.83
15. hen someone from outside criticizes my company,
it feels like a personal insult 0.93
16. The place I work says a lot about who I am as a
person 0.91
17. I share my success with leaders of my organization 0.89
18. I respect the opinions and suggestions of leaders in
this organization 0.96
19. I will actively look for a new job next year 0.72
20. I often feel that I should quit 0.68
0.69
Table AI.
Measurement scales
 CDI About the authors
Zhiqiang Liu is an Associate Professor in the School of Management at Huazhong University of
18,3 Science and Technology, Wuhan, China. His research interests include HRM and organization
behaviour. He has published in several academic journals, including Journal of Vocational
Behaviour, Journal of Business Ethics, International Journal of Human Resource Management
and Asian Pacific Journal of Management.
Zhenyao Cai is a PhD candidate of Management in Hong Kong Baptist University. His
324 research interest includes business ethics, corporate social responsibility and strategic
management. He has published several papers in academic journals, including International
Journal of Human Resource Management, Journal of World Business and Journal of Global
Marketing. Zhenyao Cai is the corresponding author and can be contacted at:
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caizhenyao87@gmail.com
Ji Li is a Professor in the Department of Management at Hong Kong Baptist University. He
received his PhD in Management from the University of Toronto. His research interests include
HRM and strategic HRM. He has published research on HRM in such journals as Strategic
Management Journal, Journal of International Business Studies and Human Resource
Management.
Shengping Shi is an Associate Professor in the Department of Logistics & Marketing, College
of Economics and Management Southwest University, Chongqing, China. Her research interests
include HRM and marketing. She has published in several academic journals, including Asian
Pacific Business Review and South Asian Journal of Management.
Yongqing Fang is a Lecturer in the School of Management Studies, University of Canberra,
Australia. His research interests include business strategy, HRM and organization behaviour. He
has published in several academic journals, including Management International Review and
International Journal of Human Resource Management.

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