This chapter discusses several theories of leadership including path-goal theory, attribution theory, leader-member exchange theory, and leadership substitutes. Path-goal theory examines how leaders can help followers by structuring their roles and considering their needs. Attribution theory looks at how and why leaders hold followers responsible. Leader-member exchange theory proposes that leaders form in-groups and out-groups that impact relationships. Leadership substitutes analyzes when a leader's influence is reduced based on follower, task, and organizational factors. Perspective-taking is important for high-quality leader-follower exchanges.

1. CHAPTER SIX
EXCHANGE AND
RELATIONSHIP
DEVELOPMENT AND
MANAGEMENT

2. 1. Explain the key role of relationship
development and management in effective
leadership and use the concepts in
improving leadership effectiveness.
2. Discuss the Path-Goal Theory of leadership
and explain the role of the leader in
removing obstacles in followers’ paths.
3. Understand the role of attribution in the
relationship between leaders and followers
and how it can be used to manage
relationships.
Learning Objectives

3. 4. Present the Leader-Member
Exchange Theory of leadership
and clarify how the creation of in-
groups and out-groups affects the
leadership process.
5. Summarize the impact of
leadership substitutes and identify
situations in which the leader’s
impact is decreased.
Learning Objectives (cont’d)

4. Path-Goal Theory of
Leadership
Effectiveness:
Employee
satisfaction and
motivation
Leader
structuring and
consideration
Situational
contingencies:
Task structure
Employee need
for autonomy
Leader’s Actions:
 Focus on obstacle
removal
 Become comfortable
with both task and
consideration behaviors
Understand followers’
perception

5. Managerial Implications Based
On Path-Goal Theory
 Leaders must understand their followers’
perception of the task
 Leaders must take their followers’ need for
challenge and autonomy into account
 When followers need challenge or the task is
challenging, leaders must avoid being directive
 When the task is routine, boring, or stressful,
leaders must be supportive to motivate their
followers

6. Attribution Theory
Employees Are More Likely To Be Held
Responsible When:
 The consequences of their
actions are severe
 When they have a mediocre
track record in other similar
situations
 When other employees are
successful in similar situations

7.  When the employee is defensive
 When the manager’s success
depends on the employee’s good
performance
Attribution Theory
Employees Are More Likely To Be Held
Responsible When:

8. Leader-member Exchange
Model
F Follower
In-Group
F
F
F
F
F
Out-group
F
F
F
F
F
F
F Leader

9. Leader-Member Exchanges
 Leaders develop relationships
with each member of work group
 High quality relationship
• member is part of “in-group”
• more responsibility, higher
satisfaction
 Low quality relationship
• member is part of “out-group”
• less responsibility, lower
satisfaction

10. Theoretical Overview of LMX
 Relationships develop from series of
exchanges or interactions
 Phase 1: Role-taking
• member enters organization
• leader assesses member’s
abilities/talents
 Phase 2: Role-making
• informal, unstructured negotiation of role
 Phase 3: Role-routinization
• social exchange pattern emerges
• becomes routine

11. Precursors of LMX
 Member attributes influence
relationship
• extroversion
• abilities
• ingratiation behaviors
 Leader provides social support
 Affective responses influence
relationship
• perceived similarity
• attraction
 leads to increased interaction
• trust

12. Outcomes of LMX
 Job satisfaction
 Organizational commitment
 Moderated/affected by other
factors
• type of task matters
 level of challenge
• situational factors
 size of group
 workload
 financial resources

13. Gender/Fairness and LMX
 Gender differences influence interactions
 Mixed gender relationships
• supervisors rate performance lower
• supervisors report liking subordinate less
• subordinates experience greater role ambiguity
 Opposite true in same gender
relationships

14. Gender/Fairness and
LMX Process Phases
 1: Role-taking - mutual respect
essential
• men and women define respect
differently
• social categorizing and stereotyping
 2: Role-making - trust develops
• single violation may destroy relationship
• violations reinforce negative stereotypes
 3: Role-routinization - mutual
obligation
• gender/fairness issues resolved by this
phase

15. Perspective-Taking
 Ability to “read” leader or
member important in LMX
 Use role-taking skills to entertain
the point of view of another
 Associated with empathy,
reasonableness, and sensitivity
 Negatively associated with
aggressiveness and sarcasm

16. Perspective-Taking I Questions
 When you were drawing, did you
draw toward yourself or toward your
partner?
 How do you think your score on the
perspective-taking questionnaire
might relate to your performance on
this task?
 How do you think one’s tendency or
ability to take the perspective (i.e.,
point of view) of another might
influence the ways in which leaders
and subordinates interact?

17. Perspective-Taking II Questions
 How difficult was it for you to imagine
drawing from your partner’s
perspective?
 How do you think your score on the
perspective-taking questionnaire
might relate to your performance on
this task?
 How do you think one’s tendency or
ability to take the perspective (i.e.,
point of view) of another might
influence the ways in which leaders
and subordinates interact?

18. Perspective-Taking Wrap-up
 3 role-taking aspects related to
perspective-taking
• accurate in ability to perceive how others
understand and respond to world
• can view situations from many
perspectives
• able to perceive other’s perspective in
depth
 Leaders and members high on these
aspects may have higher quality LMX

19. Productive Use Of In-Groups
In order to use in-groups effectively,
leaders should:
 Base in-group membership on current
performance and/or future potential
 Review criteria for in-group
membership
 Assign tasks to those with best skills
 Set clear performance-related
guidelines for in- group membership

20.  Avoid highly differentiated
groups
 Keep membership fluid and
dynamic
 Maintain different in-groups for
different activities
 Consider culture in determining
membership
Productive Use Of In-Groups
(cont’d)

21. Leadership Substitutes:
Follower Characteristics
 Experience and training substitute
for
leader structuring
 Professionalism substitutes for
leader consideration and structuring
 Lack of value for goals neutralizes
leader consideration and structuring

22.  Unambiguous tasks substitute
for
leader structuring
 Direct feedback from the task
substitutes for
leader consideration and
structuring
 Challenging task substitutes for
leader consideration
Leadership Substitutes:
Task Characteristics

23.  A cohesive team substitutes for
leader consideration and structuring
 Leader’s lack of power neutralizes
leader consideration and structuring
 Standardization and formalization substitute
for leader structuring
 Organizational rigidity neutralizes leader
structuring
 Physical distance neutralizes leader
consideration and structuring
Leadership Substitutes:
Organizational Characteristics

24.  Company built on compassion
and service to inside and outside
constituents
 Former President, Bill George,
focused on balance
 Provide employees with means
to successfully balance their
work and life
Leading Change:
The Medtronic Way

25.  Focus on removing obstacles for
the crew
 Willingness to listen and change
 Use of participation as a way of
getting the job done
 Reliance on referent power rather
than only legitimate and reward
and punishment
 Creates situations that serve as
substitutes for leadership
Leadership In Action: The
Caring Navy Commander

26.  India is vertical collectivistic
and ascriptive
 Office manager acting in
accordance with his culture
 Carefully evaluate the
consequences of not hiring the
“cousin”
 In-groups are formed
differently in different cultures
The Leadership Challenge