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LMX Theory

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david mazur

on 30 September 2013

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Transcript of LMX Theory

Exchange Theory

Leader-member exchange (LMX) theory:
Conceptualizes leadership as a process
that is centered on the
between a leader and subordinates

Development - LMX theory first describesereau, Graen, & Haga (1975), Graen & Cashman (1975), and Graen (1976)d by Dan

Focus in early studies was on differences between in and out groups

Focus on the vertical linkages leaders formed with each of their followers

Leader’s relationship to a work unit viewed as a series of vertical dyads

First studies of LMX called – Vertical Dyad Linkage (VDL)
Early Studies
In-group/out-group status based on:

How well subordinate works with the leader and how well the leader works with the subordinate

Whether subordinates involve themselves in expanding their role responsibilities with the leader

Whether subordinates negotiate to perform activities beyond the formal job description
Later research addressed how LMX theory was related to organizational effectiveness (more positive)

High-quality leader member exchange appears to compensate for the drawbacks of not being empowered.

Perceived high-quality leader-member exchange is positively related to feelings of energy in followers.
Later Studies
A prescriptive approach to leadership that emphasizes that a leader should develop high-quality exchanges with all of her or his subordinates, rather than just a few.

Three phases of leadership making which develops over time:
(a) stranger phase
(b) acquaintance phase
(c) mature partnership phase
Phases in Leadership Making
Interactions within the leader-subordinate dyad are generally rule bound

Rely on contractual relationships

Relate to each other within prescribed organizational roles

Experience lower quality exchanges

Motives of subordinate directed toward self-interest rather than good of the group
Phase 1 - Stranger
Begins with an “offer” by leader/subordinate for
improved career-oriented social exchanges

Testing period for both, assessing whether:
-the subordinate is interested in taking on new roles
-leader is willing to provide new challenges

Shift in dyad from formalized interactions to new ways of relating

Quality of exchanges improve along with greater trust & respect

Less focus on self-interest, more on goals of the group
Phase 2 - Acquaintance
Marked by high-quality leader-member exchanges

Experience high degree of mutual trust, respect, and obligation toward each other

Tested relationship and found it dependable

High degree of reciprocity between leaders and subordinates

May depend on each other for favors and special assistance

Produce positive outcomes for both
themselves & the organization
Phase 3 - Mature Partnership
Partnerships are transformational – moving beyond self-interest
to accomplish greater good of the team & organization
Benefits of High LMX

1. Preferential treatment
2. Increased job-related
3. Ample access to
6. Increased performance-related feedback
LMX Outcomes
Disadvantages of Low LMX

1. Limited trust and support from supervisors
2. Few benefits outside the employment contract
LMX theory works in two ways: it describes leadership and it prescribes leadership

In both - the central concept is the dyadic relationship
How does LMX theory work?
It suggests that it is important to recognize the existence of in-groups & out-groups within an organization

Significant differences in how goals are accomplished using in-groups vs. out-groups

Relevant differences in in-group vs. out-group behaviors
Leader forms special relationships with all subordinates

Leader should offer each subordinate an opportunity for new roles/responsibilities

Leader should nurture high-quality exchanges with all subordinates

Leader focuses on ways to build trust & respect with all subordinates –
resulting in entire work group becoming an in-group
LMX theory validates our experience of how people within organizations relate to each other and the leader.

LMX theory is the only leadership approach that makes the
dyadic relationship the centerpiece of the leadership process.

LMX theory directs our attention to the importance of
communication in leadership.

Solid research foundation on how the practice of LMX theory is related to positive organizational outcomes.
Inadvertently supports the development of privileged groups in the workplace; appears unfair and discriminatory

Because of various scales and levels of analysis, measurement of leader-member exchanges is being questioned
Applicable to all levels of education and leadership and different types of organizations
Directs leaders to assess their leadership from a relationship perspective
Sensitizes leaders to how in-groups and out-groups develop within their work unit
Can be used to explain how individuals create leadership networks throughout an organization
Can be applied in different types of organizations – volunteer, business, and education
LMX theory makes the dyadic relationship
between leaders and followers the focal
point of the leadership process
Dimensions of Leadership
Northouse, P., 2010 Leadership: Theory and Practice. Fifth Edition, 147-169.

Villium13. (2012). Leader Member Exchange
Theory. Retrieved from: http://www.youtube.com/watch?v=nXb0LZiPo7E7
Works Cited
Less follower turnover
More positive performance evaluations/feedback
Higher group cohesion
Greater organizational commitment
More desirable trips/activities/assignments
Better group attitudes
More attention and support from the leader
Greater participation
Faster group progression
It's all about the beni's baby!
Full transcript