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Leader-member exchange (LMX) theory, just like other leadership theories, focuses on leadership from a leader’s perspective, such as the style and trait approaches, and from a point of view of the subject and the context. However, the LMX theory has taken a step further to explain leadership as an act that mainly focuses on the interactions between a leader and his subjects. This paper will analyze the LMX theory based on its development, how it works, its weaknesses and strengths.
Development of LMX Theory
The LMX theory was first developed as the vertical linkage (VDL) theory. In the VDL theory, leadership is viewed as vertical linkages that leaders establish between them and their followers. The relationship that exists between leaders and their followers is merely a series of vertical dyads that keep the two together.
In the VDL theory, two kinds of relationships exist between the leaders and their followers. They include the out-group, which is based on a formal recruitment, and in-group that describes the expanded and negotiated roles that the leaders assign their followers. A follower in an organizational setup that can belong to either the in-group or the out-group and this depends on how well, he or she associates with the leader. The followers, who work well with the leaders, normally have the highest chance of falling in the in-group.
The LMX theory was developed by modifying the VDL theory. In the LMX theory, the relationship between the leader and the follower is established in two stages. The first stage, the acquaintance phase, involves the leader coming close to the follower with an aim of enhancing career-development social exchanges, which entail sharing information and resources at work.
The second stage, mature partnership, is characterized by leader-member exchanges that are of high quality. In the second stage, the leaders and the followers have at this point assessed their relationship and found out that they can benefit from each other.
How LMX Theory Works
The LMX theory works based on two principles; the first principle entails leadership description. In leadership description, LMX outlines the way followers in the in-group and out-group operate. The followers in in-group are closer to the leaders and for that reason, are entitled to more benefits at the workplace. The followers in this category, through the guidance of their leaders, are willing and capable of doing more than what is stated in their job description in order to help the company achieve its goals.
Unlike the in-group members, the followers in the out-group category do not go beyond what is prescribed in the job contract. The out-group members do not perform any work that falls out of their job description. The leaders give fair treatment to the out-group members as provided for in the formal contract. Since these members do not employ any extra effort in their operations, they are only entitled to benefits that are listed in their formal contract.
The second principle, the leadership prescription, explains the efforts that leaders employ in availing various forms of opportunities to help the followers adapt to their new jobs. The principle encourages the leaders to develop ways that can assist them build trust between them and the followers to avoid the coming up of the in-group and out-group categories. The principle ensures that the entire unit of a particular work is made an in-group affair to bring the leaders closer to their followers.
The LMX theory has made significant contributions in the way people perceive the concepts of leadership. Unlike other theories of leadership that do not touch on dyadic headship, the LMX theory addresses the dyadic relationship and describes how the relationship influences the leadership process. Secondly, the LMX theory through its description principle outlines the issues of work units by describing the contribution of every category of followers.
It is through the LMX theory that leaders can be motivated to develop a good relationship with their followers. The theory warns the leaders to desist from exercising biased leadership and to treat their followers equally.
The theory is the only one of its kind given that it describes how the general performance of a workplace is influenced by the relationship that exists between leaders and their subordinates. The theory also explains how communication influences leadership; this is evident in the high-quality exchanges that are described in the theory.
Even though the LMX theory has addressed the most important aspects of leadership, it has a number of shortfalls. The theory does not explain some of the important aspects of leadership, such as decision-making rules and promotions that are also known to affect how an institution is managed. The theory addresses the out-group and the in-group issues, but it does not explain how a follower can shift from one group to the other. In that case, it is difficult to create inequalities using the LMX theory.
The LMX theory is seen to operate on a basis that violates some of the basic human values such as fairness. The theory advocates for creation of in-group and out-group options in a workplace. When the subordinates are divided into these options, they are certainly not be treated equally by their leaders. Lastly, the theory does not mention any empirical studies that it uses to reach the conclusions that it makes.