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The Leader-Member Exchange Theory’ Concept

Leaders and followers develop complex relationships to achieve common goals in ways that benefit them. A popular assumption is that the success of such relationships depends on the extent, to which the leader and the follower are similar in their opinions and behaviors. In reality, the ways in which leaders behave differ considerably from the behaviors displayed by their followers.

The leader-member exchange theory of leadership rests on the belief that the relationships between the leader and the follower should be considered independently from the relationships developed by the same leader with other followers (Lunenburg, 2010). The leader cannot maintain positive relationships with all subordinates. However, the diversity of these relationship forms, attitudes, and outcomes eventually creates a sophisticated and colorful picture of successful leadership within an organization.

The history of the leader-member exchange (LMX) theory dates back to 1975, when Dansereau, Graen, and Haga published their seminal work (Aamodt, 2012; Hodgkinson & Ford, 2010). The LMX theory was originally called the “vertical dyad linkage” (VDL) theory (Aamodt, 2012; Hodgkinson & Ford, 2010). However, the authors of the LMX theory had to refuse from the VDL abbreviation due to its confusing association with a venereal disease (Hodgkinson & Ford, 2010). With time, the LMX theory has come to signify one of the greatest scientific and practice contributions to the study of leader relationships with subordinates. It is these relationships that are described as “leader-member exchanges” (Aamodt, 2012).

In essence, the LMX theory suggests that leaders adjust their approaches to leadership, depending on subordinate preferences and skills (Hodgkinson & Ford, 2010). In many instances, the theory represents the situational philosophy in the study of leadership. Vertical dyads exemplify the central concept of the LMX theory.

A vertical dyad is a relationship between the two individuals (leader and follower), which implies a difference in the hierarchical position, meaning that the leader is always positioned above the follower (Aamodt, 2012). Vertical dyads are treated as the most important factor of successful leadership in LMX. Such relationships emerge from regular social exchanges between leaders and followers (Hodgkinson & Ford, 2010). The quality of such relationships can vary from low-quality exchange to high-quality leader-member relations.

The quality of LMX is used to distinguish between in-group and out-group relationships. In-group followers are allowed to assume additional responsibility (Lunenburg, 2010). They are empowered to participate in organizational and leadership decision making (Lunenburg, 2010). In-group followers experience some latitude in their relationships with the leader, as well as in their roles and obligations (Lunenburg, 2010). Lunenburg (2010) describes in-group members as “trusted lieutenants”, due to their increased commitment to the organization and its leader (p. 2).

By contrast, out-group members have to function within the limits set by the employment contract (Lunenburg, 2010). Unlike the trusted relationship that exists between in-group followers and leaders, out-group subordinates are limited to contractual exchanges (Lunenburg, 2010). Personality and subordinate initiative can moderate the relationship between leaders and followers, but they cannot guarantee their success.

The LMX 7 Questionnaire contains seven items, whose purpose is to help leaders describe and evaluate the quality of their relationships with a subordinate (Northouse, 2012). Subordinates can also use this questionnaire to evaluate their relationship with the leader (Northouse, 2012). The questionnaire should be used to evaluate each relationship individually, since the basic tenet of the LMX theory is that leaders adopt different styles and behavioral models to develop effective relationships with different followers. My questionnaire score was 29.

I used it to test my relationships with the subordinate. The results suggest that I engage in higher-level leader-member exchanges. From the leader’s perspective, these scores confirm my commitment to developing effective relationships with the subordinate. These relationships incorporate the following dimensions: trust, mutual support, shared values and satisfaction, authority, innovation, and reciprocal influence (Hodgkinson & Ford, 2010).

As a leader, I tend to view my subordinates as in-group members. I trust them and give them enough freedom for self-fulfillment and growth. This is the starting point in the development of my relationships with followers. With time, I may come to view the subordinate as an out-group member, based on the results of our social exchanges. I acknowledge the dramatic personality and motivational differences, which subordinates display in their workplace attitudes.

I realize that not every subordinate has the skills, knowledge, and personal features needed to become an in-group member. The roles of trust and coupling in the relationships between leaders and subordinates are difficult to overstate. Still, as a leader, I always try to understand the unique needs and features of every subordinate, giving a chance to both of us to develop a relationship based on trust and high-level exchanges.

What I have learned is that my striving to treat each subordinate as a potential in-group member has both positive and negative implications for my performance as a leader. On the one hand, most subordinates feel trusted and motivated to perform better, when they are treated as trusted group members (Aamodt, 2012). On the other hand, “supervisors and employees often have different perceptions of the leader-member exchange” (p. 445). These differences simply cannot be ignored. By treating each subordinate as an in-group candidate, I can motivate them to perform better, but I can also fail to erase the differences in the way we perceive the organizational reality. I think I should become more objective in my evaluation of subordinates.

My action plan for implementing this new knowledge will start with the analysis of the relationships I currently have with each subordinate. Furthermore, I will seek to identify and evaluate the factors, which define the quality of leader-member exchanges with the followers. The ultimate goal of the proposed improvement is not only to understand what drives (or does not drive) the trust, rapport, and reciprocal influence between me and my followers but also to create a foundation for the development of trusting relationships with all group members.

The secret of leadership success is not in being able to build high-level and low-level relationships with followers. Rather, I must learn to build high-level relationships with every follower, based on his/her unique preferences and tasks. I will use my knowledge to evaluate the skills and preferences of every group member, so that I can improve our relationships in the long run.

In conclusion, the LMX theory distinguishes between high-level and low-level relationships among leaders and subordinates. As a result, some followers are fated to be trusted in-group members, whereas others are bound to spend their time as out-group subordinates. The difficult task facing the LMX leader is to avoid categorizations and create a strong basis for developing effective relations with all group members. This is the best way to ensure high levels of motivation and better performance in the workplace.


Aamodt, M. (2012). Industrial/organizational psychology: An applied approach. Boston: Cengage Learning.

Hodgkinson, G.P. & Ford, J.K. (2010). International review of industrial and organizational psychology. West Sussex, UK: John Wiley & Sons.

Lunenburg, F.C. (2010). Leader-member exchange theory: Another perspective on the leadership process. International Journal of Management, Business, and Administration, 13(1), 1-5.

Northouse, P.G. (2012). Leadership: Theory and practice. Thousand Oaks: SAGE.

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