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LEADER MEMBER EXCHANGE THEORY

LMX Theory

LMX Theory

The LMX theory is a relationship based approach to leadership that focuses on the two-way relationship between leaders and followers.

Takes a relational approach to leadership

Vertical Dyad Linkage Model

Moves beyond in-group & out-group

LMX theory is an outgrowth of Vertical Dyad Linkage

Model

Vertical Dyad Linkage Model

Focus on the quality of relationship between leader-member

In-group

Members of this group receives more attention and access to the resources from the leaders

In-Group and

Out-Group

According to this theory leaders form different kinds of relationships with various groups of subordinates.

Out-group

The individuals are disfavoured by the leaders and receive fewer valued resource from them.

Three Stages

Stages

Role-taking:

When a new member joins the organization, the leader assesses the talent and abilities of the member and offer them opportunities.

Role-Making:

The new members then begin to work on the projects and tasks as part of team. and they are expected to work hard, be loyal and prove trustworthy.

Routinization:

Routines between the team members and their leaders are established. In-group team members work hard to maintain the good opinion. whereas in out group members may start to dislike or distrust their leader.

It concentrates and talks about specific relationships between the leader and the each subordiantes

Focues our attention to the significance of communication in leadership.

When communication is accompanied by mutual trust, respect & devotion, it leads to effective leadership

Strength

Strength of LMX theory

Robust explanatory theory

LMX Theory is very much valid and practical in it's approach.

Criticism of LMX Theory

Criticism

  • Fails to explain the particulars of how high-quality exchanges are created.
  • Objected on the grounds of fairness and justice.
  • Does not account for gender differences in how leadership is enacted or perceived.
  • It fails to explain the relationship between leadership behavior and followers.

Mini Research

Learnings

A mini research has been conducted with 5 HR professionals of different organization.

From the Mini research

Using the Theory

This theory can be used to be aware of how one perceive members of their own team.

Learnings

  • Leader-Member exchange is important for the both the executive and the employees.
  • Communication plays an important role as the work relationship is constructed through communication.
  • The quality of leader-member Exchange is important for the empowerment of an employee.
  • If there is a good exchange between leaders and followers, they feel better and the organization prospers.

Identifying Out-Group

Re-establish the relationship

Provide T&D Opportunities

Major take away from the LMX Theory

  • It is important to find out in-group and out-group in an organization.
  • It helps to describe work units in terms of those who contribute more and less to the organization.
  • This is the only leadership approach that makes the concept of the dyadic relationship.
  • It directs to the importance of communication in leadership.
  • A leader should be fair and equal in approaching their subordinates or followers.
  • Practice of LMX theory is related to positive organizational outcome.

Take away

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