ADM 612 - Leadership
Lecture 9 – Leader-Member
Exchange (LMX) Theory
Introduction
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Most leadership theories emphasize
leadership from the point of view of the
leader (trait, skills, style) or the follower and
the context (situational, contingency, pathgoal).
Leader-member exchange (LMX) theory
focuses on leadership as a process of
interactions between leaders and followers.
Introduction
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Older theories assume that leaders treated
followers in a collective way using an
average or group leadership style.
LMX theory assumes that leaders interact
with their followers individually.
Early Studies
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In examining the vertical linkages between
leaders and followers, researchers found
two basic patterns of linkages:
In-group: based on expanded and
negotiated role responsibilities (extra-roles).
Out-group: based on the formal
employment contract (defined roles).
Early Studies
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Subordinates become a part of the ingroup or the out-group based on how
well they work with the leader and how
well the leader works with them.
Personality and other personal
characteristics play into this.
Early Studies
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Also depends on how subordinates seek to
expand their role responsibilities.
Subordinates willing to negotiate with the
leader to perform activities beyond their job
description may join the in-group.
Early Studies
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Subordinates not interested in new and
different job responsibilities become part of
the out-group.
Subordinates in the in-group receive more
information, influence, confidence and
concern from their leaders than do outgroup subordinates.
Early Studies
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In-group subordinates are also more
dependable, more highly involved, and
more communicative.
Out-group subordinates are less compatible
with the leader and tend to come to work,
do their job, and go home.
Early
Studies
Early
Studies
Early
Studies
Early
Studies
Later Studies
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Later studies focused on how the
quality of leadership exchanges
influenced organizational
effectiveness.
Later Studies
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High-quality leader-member exchanges produced
less employee turnover, more positive performance
evaluations, higher frequency of promotions,
greater organizational commitment, more desirable
work assignments, better job attitudes, more
attention and support from the leader, greater
participation, and faster career progress over 25
years.
Leadership Making
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How can exchanges between leaders
and subordinates be used for
“leadership making?”
Leadership Making
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Leadership making is a prescriptive
approach to leadership that
emphasizes that a leader should
develop high-quality exchanges with
all of her or his subordinates. “Make
all employees part of the in-group.”
Leadership
Making
Phases in Leadership Making
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Stranger phase
– Interactions rule-bound, relationships
determined by role, lower quality
exchanges. Subordinates concerned
with self-interest.
Phases in Leadership Making
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Acquaintance phase.
– Improved career-oriented social
exchanges, assessment of additional role
responsibilities, improved quality of
exchanges, shift from self-interest to
group interests.
Phases in Leadership Making
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Mature partnership.
– High-quality leader-member exchanges,
high degree of mutual trust, mutual
interdependence, reciprocity, more
egalitarian.
How Does LMX Theory Work?
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It both describes and prescribes
leadership.
Important to recognize in-groups and
out-groups in an organization.
How Does LMX Theory Work?
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Working with in-group members
increases organizational effectiveness.
The prescriptive model urges leaders
to develop high-quality exchanges with
all subordinates.
Strengths
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Strong descriptive theory – it makes
sense to talk about in-groups and outgroups.
Only theory to make use of dyadic
relationship between leader and
follower.
Strengths
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Directs our attention to importance of
communication in leadership.
Empirical evidence to link high-quality
exchanges to better organizational
functioning.
Criticisms
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Descriptive LMX theory runs counter
to basic understanding of human
fairness. Focuses overwhelmingly on
in-groups versus out-groups. Does not
address other fairness issues
(distributive, procedural, interactional).
Criticisms
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The basic ideas of the theory are not
fully developed. How do we initiate
and maintain high quality exchanges?
The measurement of leader-member
exchanges not standardized.
Application
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Directs managers to assess leadership from
a relationship perspective.
Can be use at all levels of an organization.
Can be used to explain the development of
leadership networks.
Can be applied to different types of
organizations.