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.