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Chpt 8 Exchange, Theory Approach


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Dr. William Allan Kritsonis lectures on the work of Peter G. Northouse

Dr. William Allan Kritsonis lectures on the work of Peter G. Northouse

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  • 1. Leader-Member Exchange Theory Approach Leadership Theory and Practice, 3/e Peter G. Northouse, Ph.D. William Kritsonis, PhD Presenter
  • 2.
    • LMX Theory Approach Perspective
    • Early Studies
    • Later Studies
    • Phases in Leadership Making
    • How Does the LMX Approach Work?
  • 3. LMX Theory Approach Description
    • Development - LMX theory first described by Dansereau, Graen, & Haga (1975), Graen & Cashman (1975), and Graen (1976)
    • Revisions - Theory has undergone a number of revisions since its inception and continues to be of interest to researchers
    • Assumption - LMX theory challenges the assumption that leaders treat followers in a collective way.
    • LMX theory conceptualizes leadership as a process centered in the interactions between leaders and followers.
    Perspective Definition
  • 4. Early Studies
    • Leader’s work unit as a whole was viewed as a series of vertical dyads; leader forms unique relationship with each subordinate
    • Researchers found two general types of linkages
      • Expanded/negotiated roles = in-group
        • Relationships marked by mutual trust, respect, liking, and reciprocal influence
        • Receive more information, influence, confidence, and concern than out-group members
      • Formal employment contract = out-group
        • Relationships marked by formal communication based on job descriptions
    L S Dyadic Relationship The Vertical Dyad
  • 5. 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
    • How subordinates involve themselves in expanding their role responsibilities with the leader determines whether they become in-group or out-group participants
    • Becoming part of the in-group involves subordinate negotiations in performing activities beyond the formal job description
    L S L S In- Group +3 +3 +3 +3 L S L S Out- Group +0 +0 +0 +0
  • 6. Later Studies
    • Initial research primarily addressed differences between in-groups and out-groups; later research addressed how LMX theory was related to organizational effectiveness
    • Researchers (Graen & Uhl-Bien, 1995) found that high-quality leader-member exchanges 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
  • 7. Phases in Leadership Making Graen & Uhl-Bien (1995) Phase 1 Phase 2 Phase 3 Stranger Scripted Acquaintance Partner Roles Influences Exchanges Interests One Way Low Quality Self Tested Mixed Medium Quality Self / Other Negotiated Reciprocal High Quality Group TIME
  • 8. Phase 1 Graen & Uhl-Bien (1995) Stranger
    • 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
    Phase 1
  • 9. Phase 2 Graen & Uhl-Bien (1995) Acquaintance
    • 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 2
  • 10. Phase 3 Graen & Uhl-Bien (1995) Mature Partnership
    • Marked by high-quality LMX exchanges
    • Experience high degree of mutual trust,
    • respect, and obligation toward one another
    • Tested relationship that is dependable
    • High degree of reciprocity between leader and
    • subordinate
    • May depend on each other for favors and
    • special assistance
    • Highly developed patterns of relating that
    • produce positive outcomes
    Phase 3
  • 11. How Does the LMX Theory Approach Work?
    • Focus of LMX Theory Approach
    • Strengths
    • Criticisms
    • Application
  • 12. LMX Theory Approach
    • Essential to recognize existence of in-groups & out-groups
    • Significant differences in how goals are accomplished using in-groups vs. out-groups
    • Relevant differences in in-group vs. out-group behaviors
    • Best understood within the Leadership Making Model
      • Leader forms special relationship with each subordinate
      • Leader should offer each subordinate an opportunity for new roles/responsibilities
      • Leader should nurture high-quality exchanges with all subordinates
      • Rather than concentrating on differences, leader should focus on ways to build trust
    Descriptive Prescriptive
  • 13. Strengths
    • 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
    • Solid research foundation on how the practice of LMX theory is related to positive organizational outcomes
  • 14. Criticisms
    • Inadvertently supports the development of privileged groups in the workplace; appears unfair and discriminatory
    • The basic theoretical ideas of LMX are not fully developed
    • Because of various scales and levels of analysis , measurement of leader-member exchanges is being questioned
  • 15. Application
    • Applicable to all levels of management and different types of organizations
    • Directs managers to assess their leadership from a relationship perspective
    • Sensitizes managers 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