Leader-Member Leader-Member Exchange TheoryExchange Theory

AGED 3153AGED 3153

Good leaders develop through a never-ending process of self-study, education, training, and experience.

~ Manual on military leadership

OverviewOverview

LMX Theory Approach PerspectiveLMX Theory Approach Perspective Early StudiesEarly Studies Later StudiesLater Studies Phases in Leadership MakingPhases in Leadership Making How Does the LMX Approach Work?How Does the LMX Approach Work?

LMX Theory Approach LMX Theory Approach DescriptionDescription

Focuses on Focuses on interactions interactions between leaders between leaders and followersand followers

First described in 1975 by Dansereau, First described in 1975 by Dansereau, Graen and Haga, and Graen and CashmanGraen and Haga, and Graen and Cashman

Changed the idea that followers are a Changed the idea that followers are a group and looks at followers as group and looks at followers as individualsindividuals

LMX theoryLMX theory

Conceptualizes leadership as a process centered in the interactions between leaders and followers

Dyadic relationship is focal point of leadership process

Dyadic Dyadic RelationshipRelationship

LLLL

SSSS

Dyadic RelationshipDyadic Relationship

TheTheVerticalVerticalDyadDyad

Vertical DyadsVertical Dyads– Focused on the nature of the vertical

linkages leaders formed with each of their followers leader forms unique relationship with each

subordinate

Early StudiesEarly Studies

LinkagesLinkages

In-group/out-group status based on:In-group/out-group status based on:– how subordinates involve themselves in

expanding their role responsibilities with the leader

– how well subordinate works with the leader – how well the leader works with the

subordinate Becoming part of the in-group involves

subordinate negotiations in performing activities beyond the formal job description

VDL DescribedVDL Described

1.1. Willing to do moreWilling to do more

2.2. Demo. Demo. innovativeness innovativeness

3.3. Get more Get more responsibilityresponsibility

4.4. More opportunitiesMore opportunities

5.5. Get time/support Get time/support from leaderfrom leader

1.1. Operate strict to Operate strict to prescribed rolesprescribed roles

2.2. Do only what is Do only what is requiredrequired

3.3. Get fair treatment but Get fair treatment but no special attentionno special attention

4.4. Get standard benefitsGet standard benefits

LinkagesLinkages

LLLL

SSSS

LLLL

SSSS

In-In-GroupGroup

+3+3 +3+3 +3+3 +3+3

LLLL

SSSS

LLLL

SSSS

Out-Out-GroupGroup

+0+0 +0+0 +0+0 +0+0

+3 is high-quality relationship

0 is stranger

Later StudiesLater Studies Addressed how LMX theory was related to Addressed how LMX theory was related to

organizational effectiveness– Related to positive outcomes for leaders, followers,

groups and the organization

Researchers (Graen & Uhl-Bien, 1995) found Researchers (Graen & Uhl-Bien, 1995) found that that high-qualityhigh-quality leader-member exchanges leader-member exchanges resulted in:resulted in:– 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– Faster career progress

Current StudiesCurrent Studies

Focus on how leader-member exchanges Focus on how leader-member exchanges can be used for can be used for leadership makingleadership making– Emphasizes high-quality exchanges with all

subordinates Leaders create networks of partnerships

throughout the organization benefits organizational and personal goals/progress

Occurs over time through 3 phases Stranger Acquaintance Mature partner

Phase 1Phase 1Graen & Uhl-Bien (1995)Graen & Uhl-Bien (1995)

• Interactions rule bound

• Rely on contractual relationships

• Relate to each other within prescribed organizational roles

• Experience lower quality exchanges

• Subordinate motives directed toward self-interest

PhasePhase 22Graen & Uhl-Bien (1995)Graen & Uhl-Bien (1995)

• Offer by leader/subordinate for improved career-oriented social exchanges

• Testing period of taking on new roles and leader providing new challenges

• Shift from formalized interactions to new ways of relating

• Quality of exchanges improve along with greater trust and respect

• Less focus on self-interest, more on goals of the group

Phase 3Phase 3Graen & Uhl-Bien (1995)Graen & Uhl-Bien (1995)

• High-quality LMX exchanges

• High degree of mutual trust, respect, and obligation toward one another

• Tested relationship that is dependable

• High degree of reciprocity

• May depend on each other for special assistance

• Highly developed patterns of relating that produce positive outcomes

Phases of Leadership Phases of Leadership MakingMaking

How Does the LMX How Does the LMX Theory Approach Theory Approach

Work?Work?

LMX Theory ApproachLMX Theory Approach

Describes Describes leadershipleadership

Essential to recognize existence of in-groups & out-groups– how goals are

accomplished – Relevant behavior

differences

Prescribes Prescribes leadershipleadership– Best understood within

leadership making modelleadership making model – Leaders should:

create special relationships with all subordinates

treat every subordinate equally

nurture high-quality exchanges with all subordinates

focus on ways to build trust

What are strengths What are strengths of LMX theory of LMX theory approach?approach?

What are weaknesses What are weaknesses of LMX theory of LMX theory approach?approach?

How do we apply the How do we apply the LMX theory LMX theory approach?approach?