Chapter 7 Leader-Member Exchange Theory
Description
Most of leadership theories discussed thus far in the book have emphasized leadership from the point of view of the leader (e.g., trait approach and style approach) or the follower and the context (e.g., situational leadership, contingency theory, and path-goal theory). LMX theory was first described 25 years ago in the works of Danserau, Graen, and Haga (1975), Graen and Cashman (1975), and Graen (1976)
Early Studies
In the first studies of exchange theory, which was then called vertical dyad linkage (VDL) Theory, researchers focused on the nature of the vertical linkages leaders formed with each of their followers (see Figure 7.2). A leaders relationship to the work unit as a whole was viewed as a series of vertical dyads Within an organizational work unit, subordinates become a part of the in-group based on how well they work with the leader and how well the leader works with them.
Later Studies
After the first set studies there was a shift in the focus of LMX theory. Whereas the initial studies of this theory primarily addressed the nature of the differences between in-groups and out-groups, a subsequent line of research addressed how LMX theory was related to organizational effectiveness.
Leadership Making
The findings from the later studies were the impetus for the most current research on LMX theory, which focuses on how exchanges between leaders and subordinates can be used for leadership making (Graen & Uhl-Bien, 1991). Leadership making is a prespective approach to leadership that emphasizes that a leader should develop high-quality exchanges with all of her or his subordinates, rather than just a few. It attempts to make every subordinate feel as if he or she is a part of the in-group and, by so doing, avoids the inequites and negative implications of being in an out-group. Graen and Uhl-Bien (1991) suggest that leadership making develops progessively over time in three phases: (a) the stranger phase, (b) the acquaintance phase, and (c) the mature partnership phase
Leaders and subordinates relate to each other within prescribed organizational roles. They have lower quality exchanges, similar to those of out-group members that we discussed earlier in the chapter. Phase 2, the acquaintance phase, begins with an offer by the leader or the subordinate for improved career-oriented social ex-changes, which involve sharing more resources and personal or work-related information. Phase 3, mature partnership, is marked by high-quality leader member exchanges. Inviduals who have progressed to this stage in their relationships experience a high degree of mutual trust, respect, and obligation toward each other. To evaluate leader-member exchanges, researchers have typically used a brief questionnaire that asks leaders and followers to report on the effectiveness of their working relationships.
How Does LMX Theory Work?
LMX theory works in two ways : It describes leadership and it prescribes leadership. In both instances, the central concept is the dyadic relationship that leader forms with each of her or his subordinates. The differences in how goals are accomplished using in-groups as compared to out-groups are substantial. Working with an in-group allows a leader to accomplish more work in a more effective manner than working without one. Out-group members act quite differently from in-group members. Rather than trying to do extra work, out-group members operate strictly within their prescribed organizational roles.
Strengths
First, it is a strong descriptive theory. Intuitively it makes sense to describe work units in terms of those who contribute more and those who contribute less or the bare minimum to the organization. Second, LMX theory is unique because it is the only leadership approach that makes the concept of the dyadic relationship the centerpiece of the leadership process. Third, LMX theory is notewothy because it directs our attention to the importance of communication in leadership. The high-quality exchanges advocated in LMX theory are inextricably bound to effective communication. Fourth, there is a large body of research that substantiates how the practice of LMX theory is related to positive organizational outcomes.
Criticisms
The most obvious criticism that can be made of LMX theory is that on the surface it runs counter to the basic human value of fairness. Throughout our lives, beginning when we were very young, we have been taught to try to get along with everyone and to treat everyone equally. Our culture is replete with examples of people of different genders, ages, cultures, and abilities who have been discriminated against. Although LMX theory was not designed to do so, it supports the development of privileged groups in the workplace.
Leadership Instrumet
Many different questionnaires have been used by researchers to study LMX theory. All of them have been designed to measure the quality of the working relationship between leaders and followers.