Leader–member exchange (LMX) and performance: the moderating role of organizational form of individual fashion stores

Abstract

This study reveals how the level of leader-member exchange (LMX) in 267 individual stores in a Spanish fashion retail chain is associated to store-level performance estimated through two indicators commonly used in this industry: labour productivity and service quality ratings. We also appraise the moderating role played by the organizational form (company ownership vs. franchising) of individual stores in the relationship between LMX and store performance. We have used multivariate analyses to study the research questions, with a panel dataset of quarterly store-level data for the period January 2022–December 2023. The relationship between LMX and labour productivity is positive and significant, and franchising increases it. However, franchising reduces the positive and significant relationship between LMX and service quality ratings. The results are robust across our numerous specifications.