Paper

Keisha Thurmond

May 03, 2016

Leader-Member Exchange Theory conceptualizes leadership as a process that is centered on the interaction between leaders and followers (Northouse 2012 p.161). The basic idea behind the leader member exchange theory is that leaders form two groups: in-group and out-group. In-group members are given greater responsibilities, more rewards and attention. The leader allows in-group members some latitude in their roles. In-group members work within the leader’s inner circle of communication. In contrast out-group members are outside the leaders inner circle, receive less attention and fewer rewards and are managed by formal rules and policies.

Some theories of leadership like Contingency Theory and Path Goal Theory leadership assume that the leader behaves essentially in the same manner towards all group members. This is not accurate leaders act differently towards different subordinates and develops contrasting types of relationships with them.

In early studies of the exchange theory, initially called vertical dyad linkage (VDL) theory researchers focused on the nature of vertical linkages leaders formed with each of their followers (Northouse 2012 p.161). The LMX Theory focuses in a dyad the relationship between a leader and each subordinate independently rather than on the relationship between the leader and the group. LMX, originally called vertical dyadic linkage was developed approximately thirty years ago by Dansereau et al as a response to average leadership style, which assumed that leaders maintain similar relationships with all of their employees. Each linkage or relationship is likely to differ in quality. The same leader may have poor interpersonal relations with some subordinates and open and trusting relations with others. LMX theory makes a dyadic relationship between leaders and followers the focal point of the leadership process (Northouse 2012 p.161).

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