The document discusses Leader-Member Exchange Theory (LMX), which focuses on the unique relationship between a leader and each follower. LMX proposes that leaders form in-groups and out-groups among followers based on factors like competence, compatibility, and loyalty. Members of the in-group receive greater responsibilities, support, and negotiating latitude from the leader in exchange for higher performance. Those in the out-group comply with basic role requirements but have less influence and engagement with the leader. High-quality leader-member exchanges are associated with positive organizational outcomes while poor exchanges can cause alienation and low performance.

1. Leader-Member Exchange
Theory (LMX)
• News
• Quiz
• Multiple-Linkage Model
• Leader-Member Exchange (LMX) & Vertical
Dyad Linkage (VDL)
• Team Task
Question: what is the relationship
between leaders & followers & how does
that affect response?

2. Multiple-Linkage Model
(Yukl, 1994)
• Recognizes complexity in formal organizations
• Incorporates other theories
• Leaders have short (tactical) and long term (strategic) impact
• Short term relies on skillful correction of deficiencies of intervening variables
in the work unit
• Long term relies on leader changing situational variables to be more
favorable (e.g., strategic planning, policy formation, program development,
organizational change, political activity, etc. )

3. Short-term
Long-term
Extent to which these are
appropriately used will reflect the
leader’s success

4. Yukl’s Multiple Linkage Model

5. • Mission success
• Member well being &
commitment
• Internal integration
• External adaptability
• Technical
• Cognitive
• Social
• Personality
• Motivation
• Values
• Analysis
• Intent
formation
Influence
• Directive
• Contingent
• Ach-oriented
• Persuasive
• Facilitative
• Supportive
• Participative
• Delegative
• Legitimate
• Reward
• Coercive
• Information
• Ecological
• Responsibilities
• Constraints
• Opportunities
• Resources
• Structures
• Procedures
• Climate and culture
• Strategic capabilities
• Professional attributes
• External relationships
Uncontrollable factors
• Task role clarity
• Task proficiency
• Motivation & effort
confidence
• Teamwork & cohesion
• Professional conduct
• Resilience
• Professional image
& reputation
• Trust & confidence
in Ldr
• Support for the Ldr
• Expert
• Reference
• Connection
Leader
characteristics Personal power
Leader
behavior
Direct
Position power Task, group, system,
institution & environ.
characteristics
Individual /group
behavior, capabilities
& performance Essential
Outcomes
Secondary
outcomes
Modification of
Yukl’s Model
http://www.cda.forces.gc.ca/cfli-ilfc/lea/conc/ch8-eng.asp
Leader Variables
Situational Variables

6. Vertical Dyad Linkage (VDL) / Leader-
Member Relations (LMX)
• Think of a work/team situation in which there have been
an “in-group (close to the boss) and “out-group” (well
established but just not given those special tasks)
• How what influenced the formation of those two
groups?
• What did the boss expect of each group? How did s/he
treat them differently?
• What were advantages and disadvantages of being in
each group?
• How did the groups perceive each other?
• What was the effect on the work environment &
relationships?

7. Vertical-Dyad Linkage (VDL)
Leader-Member Exchange (LMX)
(Dansereau, Cashman, & Graen, 1973)
• While most leadership theories account for the
impact of leadership on groups or the organization
as a whole, Leader-Member Exchange Theory
uniquely focuses on the Leader-Follower dyad.
• Not every follower is treated the same by the
leader due to time and resources. This differential
treatment, expectation, and exchange separates
followers into two groups: the “in-group” and “out-
group”
• Interaction varies from dyad to dyad, exchanging
privilege for performance, & focuses on quality of
interaction
• Negotiating latitude: as relationship evolves, the
leader enables the role incumbent to further
define his/her own role
Perceptions of the
“out-group” when LMX
is not going well

8. The Role theory of Katz and Kuhn (1966) is the original
theoretical base of the LMX (Graen, 1976). Leaders accomplish
their work through role sets, in which the leader is most
influential. The leader communicates to the member a set of
expectations regarding the appropriate role behavior of the
member (role expectation). The member then receives and
interprets these sent expectations (received role) and may
modify his or her role behavior. Finally, the member's role
behavior transmits feedback to the leader (monitored behavior).
Burns and Otte (1999) describe the three stages:
Phase 1: Role-taking as leaders and members come to understand how the other views and
desires respect, the leader communicates role expectations to the member, with no
reciprocal contribution from the member.
Phase 2: Role-making is the trust that develops in order for leaders and members to further
extend the relationship and influence over each other's attitudes and behaviors. Both
contribute to role re-definition and this is where in/out work groups are differentiated
Phase 3: Role-routinization of the social exchange pattern becomes established and
routine
http://business.nmsu.edu/~dboje/teaching/338/power_and_leadership.htm

9. Leader-Member Exchange (LMX)
Vertical-Dyad Linkage (VDL)
Leader
Subordinate
Other Subordinates--
Viewed as having less
potential, interest, or
opportunity
“Out-Group”
• Comply with basic role requirements
• Accept legitimate direction
• Standard benefits and compensation
• Alienation
• Apathy
• Hostility
• Low performance
“In-Group”
• Unstructured tasks
• Volunteer extra
• Additional
responsibilities
• Special projects
•Leadership potential
•Competency
•Compatibility
•Agreement
•Personality
•Loyalty
•Commitment
Perceived
Equity or
Inequity
• Inside information
• Influence decisions
• Task assignment
• Job latitude
• Support
• Attention
High----Negotiating Latitude-----Low
High Power Leaders give more negotiating
latitude to high power employees)

10. Strengths of LMX
• As a descriptive theory, it notes the importance of the
existence of in-groups and out-groups within an organization
• The LMX theory is unique as the only leadership theory that makes
the the dyadic relationship the central factor of the leadership
process
• LMX directs our attention to the importance of leadership
communication and relationships
• Research substantiates how the practice of the LMX theory is related
to positive organizational outcomes
http://www.d.umn.edu/~stau0106/group/LMX.doc
Strengths & Weaknesses of LMX

11. Weaknesses of LMX
http://www.d.umn.edu/~stau0106/group/LMX.doc
• The LMX theory runs counter to basic human belief in
fairness: It gives the appearance of discrimination against
groups that don’t receive the special attention
• The basic ideas and theory are not fully developed: details
of compatibility of personality, interpersonal skills, how trust is
developed, etc., are not presented or discussed how important
they are compared to other constructs
• Few empirical studies have used dyadic measures to analyze the
LMX process
• Measurement scales lack content validity (may lack what they
intended to measure) and unclear whether they measure single
or many dimensions

12. What makes a good “follower”?

13. Team Discussion
• Pick a case you are familiar with that involves
in/out group dynamics
• Use the theory to analyze what went well/not
well and why
• If you were a trainer or consultant to this
leader, write out a series of recommendations
about what should be changed to improve
the situation (consider selection criteria for
subordinates, how in/out groups are framed,
equity issues, opportunities to break into the
in-group, dealing with alienation, etc.)