A supervisor's behaviour may not be the only factor that determines the performance of team members (Kerr & Jermier, 1978). Taking this postulation as a basis, we formulated a model to describe how service climate moderates the effects of the leadership behaviour of supervisors. When the organization and working environment are not conducive to providing a good service to colleagues and customers, the supervisor's leadership behaviour makes an important difference. However, when the service climate is good, a supervisor's leadership behaviour makes no substantial difference. This hypothesis was supported in an examination of the service quality of 511 frontline service providers as sampled from 55 work groups in 6 service organizations. The employee service quality was low when both the service climate and the supervisor's leadership behaviour were lacking. However, when the service climate was unfavourable, effective leadership behaviour played a compensatory role in maintaining performance standards towards external customers. When the leadership was ineffective, a favourable service climate nullified the negative effect on service quality to internal customers.