Lmx theory

leader member exchange theory

1. LEADERSHIP AND MANAGEMENT OF EDUCATIONAL INSTITUTIONS Topic= LMX Theory Submitted To: Dr. Ahmad Bilal Prepared By: Khurram Rafi PhD Education Scholar University of Gujrat

2. What is the LMX theory? The LMX theory conceives leadership as a process that is focused on the interactions between a leader and subordinates” (Northouse, 2010, p. 147). Traditionally, researchers thought of leadership as something that was done at a group level. Unlike the trait or skills approach, the LMX theory focuses on an interactive relationship; not just on the leader or follower.

3. Leader member exchange theory Leader-member exchange (LMX) theory focuses on the degree of emotional support and exchange of valued resources between the leader and the members (Kang and Stewart, 2007) Thus, diagnosing this relationship can lead to a higher quality relationship and improved organizational performance. Leaders should interrelate with and have the same association with every member of their group. This theory addresses the issue that people are vastly different and need to be interacted with as such.

4. Two distinct types of relationships INGROUP: Special relationship in which more privileges, preference, and access to resources are given in exchange for going “above and beyond” routine duties. OUTGROUP: Typically only do the minimum amount of work and in exchange are given low levels of access to resources and decision making .

5. In-group and out-group In-group Great relationships are created with managers by: Displaying trust Giving respect Expressing empathy Demonstrating persistence Out-group Poor relationships are created with managers by: Responding with negative attitudes Showing signs of withdrawal Exhibiting aggressive behaviour

6. In-group Privileges Preferential treatment from leaders, upper management, CEO’s, etc Better, higher quality information exchange Free access to leadership for feedback, signatures, etc. Better chance to receive higher marks on performance feedbacks. Access to resources (paper, money, staffing, etc )

7. Out-group Realities Lack of access to resources, leadership input, fair feedback. Limited trust and information exchanges with leadership. Feelings of neglect and loss of team identity. Lower production and morale

8. Organizational Benefits  Subordinates that are involved in a high-quality relationship with their leader “receive disproportionate attention from managers, higher performance evaluations, report lower turnover rates, and experience greater satisfaction with their managers” (Jones, 2009).

9. Strengths Only theory that focuses on the dyadic relationship between a leader and their subordinate. It is a very descriptive theory. Emphasizes the significance of communication in the workplace. Serves as a reminder to leaders to be fair in their interactions with subordinates. Research has shown that utilization of the LMX theory creates positive organizational outcomes (Northouse, 2010 )

10. Weaknesses Because this theory divides people into two distinct groups, there is often a feeling of unfairness. Does not address unfairness issue and the subordinates’ perceptions of it. Fails to explain how high-quality relationships are actually created and how one gets into it. Measurement scales of the LMX lack content validity. (Northouse, 2010)

11. Overall   LMX challenges leaders to look at their own leadership style from an individual relationship perspective, instead of focusing on entire groups. All levels of managers can use this theory, from CEOs to factory line supervisors. Understanding the nature of a high-quality relationship and being able to form them will help leaders network with more people to work more efficiently and productively. LMX theory can be used in many different settings. Reminds leaders that every member of their team is unique and must be related to in a unique manner .