Leader Member Exchange Theory

(LMX)

Veronica BenitezDaisy Gutierrez

Erin Young

Objectives

Students will understand LMX theoryClass will identify group and out-group

dynamicsStudents will utilize knowledge to

analyze LMX assessment results

What is the LMX theory?

“The LMX theory conceives leadership as a

process that is focused on the interactions

between a leader and subordinates” (Northouse, 2010, p. 147).

Unlike the trait or skills approach, the LMX theory focuses on an

interactive relationship; not just on the leader or follower.

Traditionally, researchers thought of leadership as

something that was done at a group level.

Theory Significance

LMX theory challenges the belief that leaders should interrelate with and

have the same association with every member of their group. This theory addresses the issue that people are

vastly different and need to be interacted with as such.

LMX - RootsVertical dyad linkage theory- researchers originally focused on vertical

linkages between leaders and each of their subordinates.

Leader

Sub

Leader

Sub

Further research into these dyads revealed two distinct types of relationships:INGROUP: special relationship in which more privileges, preference, and access to resources are given in exchange for going “above and beyond” routine duties.OUTGROUP: typically only do the minimum amount of work and in

exchange are given low levels of access to resources and decision making.

Visualization

Stranger phase: Roles are highly scripted and most exchanges are done based on organizational rules and hierarchal status(es). There is very little trust. The subordinate is self-motivated.

Acquaintance phase: Leader offers a subordinate improved benefits, information exchange, etc. She/he is attempting to ‘feel out’ the subordinate and see what they are motivated by. More trust is developed here. Subordinates begin to focus less on self interest and more on group goals.

Partnership phase: Mutual and high-quality leader and subordinate exchanges. Favors are done for one another and there is mutual trust. Subordinates may be relied on for extra duties, but are rewarded with praise, information, resources, etc. Subordinate focuses on group goals and moves beyond their own self-interests.

Relationship Phases

Task Allocation

• Break down the project into small tasks. • Rank all tasks based on importance. • List the competencies of each team member. • Match competencies with tasks.

In-group & Out-group

In-group Privileges

Preferential treatment from leaders, upper management, CEO’s, etc Better, higher quality information exchange Free access to leadership for feedback, signatures, etc. Better chance to receive higher marks on performance feedbacks Access to resources (paper, money, staffing, etc)

Out-group Realities

Lack of access to resources, leadership input, fair feedback. Limited trust and information exchanges with leadership Feelings of neglect and loss of team identity Lower production and morale

Workplace Scenario

Is the leader-member exchange in-group or out-group?

What is the quality of the leader-member exchange?

Where can the leader-member exchange be improved, and how?

Organizational Benefits

Subordinates that are involved in a high-quality relationship with their leader “receive disproportionate

attention from managers, higher performance evaluations, report lower turnover rates, and

experience greater satisfaction with their managers” (Jones, 2009).

Only theory that focuses on the dyadic relationship between a leader and their subordinate.

It is a very descriptive theory. Emphasizes the significance of communication in the

workplace. Serves as a reminder to leaders to be fair in their

interactions with subordinates. Research has shown that utilization of the LMX theory

creates positive organizational outcomes (Northouse, 2010)

Strengths

Weaknesses

Because this theory divides people into two distinct groups, there is often a feeling of unfairness.

Does not address unfairness issue and the subordinates’ perceptions of it.

Fails to explain how high-quality relationships are actually created and how one gets into it.

Measurement scales of the LMX lack content validity. (Northouse, 2010)

LMX challenges leaders to look at their own leadership style from an individual relationship perspective, instead of focusing on entire groups.

All levels of managers can use this theory, from CEOs to factory line supervisors.

Understanding the nature of a high-quality relationship and being able to form them will help leaders network with more people to work more

efficiently and productively.

LMX theory can be used in many different settings.

Reminds leaders that every member of their team is unique and must be related to in a unique manner.

Overall

LMX 7 Questionnaire

Research

Team Reflection

Questions?

References• Ballinger, G. A. (2010). Leader-member exchange and turnover before and after succession events. Organizational

Behavior and Human Decision Processes, 113(1), 23-36.

• Credo, K. R., Armenakis, A. A., Field, H. S., Young, R. L. (2010). Organizational ethics, leader-member exchange, and organizational support: Relationships with workplace safety. Journal of Leadership & Organizational Studies, 17(4), 325-334.

• Jacques, P. H., Garger, J., Thomas, M., and Vracheva, V. (2012). Effects of early leader-member exchange perceptions on academic outcomes. Learning Environments Research, 15(1), 1-15.

• Jones, J. A. (2009). Gender dissimilarity and leader-member exchange: The mediating effect of communication apprehension. Emerging leadership journeys, 2(1), 3-16.

• Kreitner R. and Kinicki A. (2004). Organizational Behavior, 6e, p. 617-618. Burr Ridge: IL, McGraw-Hill

• Moritz, N. H., Levy, B. L., Travis, P., Quaid, D., Fox, M., Whitaker, F., McGill, B., Sony Pictures Home Entertainment (Firm). (2008). Vantage point. Culver City, Calif: Sony Pictures Home Entertainment.

• Mueller, B. H., & Lee, J. (2002). Leader-member exchange and organizational communication satisfaction in multiple contexts. Journal Of Business Communication, 39(2), 220-244.

• Northouse, P. G. (2010). Leader-member exchange theory. In P. G. Northouse, Leadership theory and practice: fifth edition (pp. 147-170). Thousand Oaks, CA: SAGE Publications, Inc.