In this chapter, we propose a theory of perceptual distance and its implications for team leadership and team outcomes. Perceptual distance is defined as the variance in the perceptions of the same social stimulus, which in this case, is either a team leader's behavior or the team's behavior. The general research question that we will address is, "What are the consequences of perceptual distance for team process and outcomes?" Our basic argument is that the relationship between perceptual distance and team processes and outcomes is moderated by two key cultural characteristics: power distance and collectivism. For example, depending upon the dynamics of power distance, large differences in perceptions of a team leader's behavior can negatively impact team productivity. Similarly, depending upon the dynamics of collectivism, significant variations in perceptions of team cohesion can negatively influence conflict resolution.