Chapter 8 NorthouseLeader Member Exchange TheoryDr. Mary Ann Pearson
LMX Theory Description LMX Theory Perspective Early Studies Later Studies Phases in Leadership Making How Does the LMX Approach Work?Overview
Early StudiesTheVerticalDyad• First studies of LMXcalled – Vertical DyadLinkage (VDL)• Focus on the verticallinkages leadersformed with each oftheir followers• Leader’s relationshipto a work unit viewedas a series of verticaldyadsVerticalDyads
Early Studies• Leader’s work unit as a whole was viewed as a seriesof vertical dyads; leader forms unique relationship witheach subordinate
Early Studies, cont’d.In-group/out-group status based on• How well subordinate works with the leader and how well theleader works with the subordinate• Whether subordinates involve themselves in expanding theirrole responsibilities with the leader• Whether subordinates negotiate to perform activities beyondthe formal job description
Later Studies• - Focused on how the quality of leader-member exchanges produced lessemployee turnover, more positive performance evaluations, higherfrequency of promotions, greater organizational commitment and moredesirable work assignments, better attitudes and faster career progress.• The quality of of leader-member exchange mattered most for employeeswho felt little empowerment. The effective leader member exchangeseemed to make up for having little or no power.
In Group or Out Group• Early Studies-Within an organizational work unit subordinatesbecome a part of the in-group or the out-group dependingupon how well they work with the leader and how well theleader works with them.• The in-group receives more information, influence, confidenceand concern from the leader than the out-group subordinates.
S SubordinateIn-GroupOut-GroupLeaderSSSS SSSS SSSSIn-Group– more information, influence,confidence & concern fromLeader– more dependable, highlyinvolved & communicativethan out-group Out-Group– less compatible with Leader– usually just come to work,do their job & go homeIn-Group& Out-GroupSubordinates
LMX Theory• Before this theory-researchers treated leadership assomething did toward all of the followers.• LMX theory makes the dyadic relationship between leadersand followers the focal point of the leadership process.
LMX Theory Description• Development - LMX theory first described byDansereau, Graen, & Haga (1975), Graen & Cashman(1975), and Graen (1976)• Revisions - Theory has undergone a number of revisionssince its inception and continues to interest researchers• Assumption - LMX theory challenges the assumption thatleaders treat followers in a collective way, as a group.• LMX - Directed attention to the differences that might existbetween the leader and each of his/her followersPerspective
How Does the LMX TheoryApproach Work? Focus of LMX Theory Strengths Criticisms Application
Leadership Making(Graen&Uhl-Bien,1995)• A prescriptive approach to leadership that emphasizesthat a leader should develop high-quality exchanges with allof her or his subordinates, rather than just a few.• Three phases of leadership makingwhich develops over time:(a) stranger phase(b) acquaintance phase(c) mature partnership phase
How does LMXtheory work?• LMX theory works in two ways: it describesleadership and it prescribes leadership• In both - the central concept is the dyadic relationshipDescriptively:• It suggests that it is important to recognize the existence of in-groups & out-groups within an organization• Significant differences in how goals are accomplished using in-groups vs. out-groups• Relevant differences in in-group vs. out-group behaviors
LMX Outcomes for Employees(Harris,Wheeler&Kacmar,2009)Benefits of High LMX- preferential treatment- increased job-relatedcommunication- ample access tosupervisors- increased performance-related feedbackDisadvantages of LowLMX- limited trust andsupport fromsupervisors- few benefits outsidethe employmentcontract
Criticisms• Inadvertently supports the development ofprivileged groups in the workplace; appears unfairand discriminatory• The basic theoretical ideas of LMX are not fullydeveloped• How are high-quality leader-member exchanges created?• What are the means to achieve building trust, respect, andobligation? What are the guidelines?• Because of various scales and levels ofanalysis, measurement of leader-member exchangesis being questioned
Strengths• LMX theory validates our experience of how people withinorganizations relate to each other and the leader.• LMX theory is the only leadership approach that makes thedyadic relationship the centerpiece of the leadershipprocess.• LMX theory directs our attention to the importance ofcommunication in leadership.• Solid research foundation on how the practice of LMXtheory is related to positive organizational outcomes.
Leadership Making Graen&Uhl-Bien(1995)Mature Partnership• Marked by high-quality leader-member exchanges• Experience high degree of mutual trust, respect, and obligation toward each other• Tested relationship and found it dependable• High degree of reciprocity between leaders and subordinates• May depend on each other for favors and special assistance• Highly developed patterns of relating that produce positiveoutcomes for both themselves & the organizationPhase 3Partnerships are transformational – moving beyond self-interest toaccomplish greater good of the team & organization
Leadership MakingGraen&Uhl-Bien(1995)Acquaintance• Begins with an “offer” by leader/subordinate for improved career-orientedsocial exchanges• Testing period for both, assessing whether- the subordinate is interested in taking on new roles- leader is willing to provide new challenges• Shift in dyad from formalized interactions to new ways of relating• Quality of exchanges improve along with greater trust & respect• Less focus on self-interest, more on goals of the groupPhase 2
Leadership MakingGraen&Uhl-Bien(1995)Stranger• Interactions within the leader-subordinate dyad are generally rulebound• Rely on contractual relationships• Relate to each other within prescribed organizational roles• Experience lower quality exchanges• Motives of subordinate directed toward self-interest rather than goodof the groupPhase 1
Application• Applicable to all levels of management anddifferent types of organizations• Directs managers to assess their leadershipfrom a relationship perspective• Sensitizes managers to how in-groups and out-groups develop within their work unit• Can be used to explain how individuals createleadership networks throughout anorganization• Can be applied in different types oforganizations – volunteer, business, educationand government settings