Chapter 8 - Leader-Member Theory Leadership Chapter 8 – Leader-Member Exchange Theory Northouse, 4th edition Chapter 8 - Leader-Member Theory Overview LMX Theory LMX Theory Description Perspective Early Studies Later Studies Phases in Leadership Making How Does the LMX Approach Work? Chapter 8 - Leader-Member Theory Definition Leader-member exchange (LMX) theory: – conceptualizes leadership as a process that is centered on the interactions between a leader and subordinates Some theories focus on leaders: – trait approach, skills approach and style approach Other theories focus on the follower and the context: – situational leadership, contingency theory, and path-goal theory. Chapter 8 - Leader-Member Theory Dimensions of Leadership LMX theory makes the dyadic relationship between leaders and followers the focal point of the leadership process Chapter 8 - Leader-Member Theory LMX Theory Description Perspective Development - LMX theory first described by Dansereau, Graen, & Haga (1975), Graen & Cashman (1975), and Graen (1976) Revisions - Theory has undergone a number of revisions since its inception and continues to be of interest to researchers Assumption - LMX theory challenges the assumption that leaders treat followers in a collective way, as a group. – LMX - Directed attention to the differences that might exist between the leader and each of his/her followers Chapter 8 - Leader-Member Theory Early Studies First studies of LMX called – Vertical Dyad Linkage (VDL) – Focus on the vertical linkages leaders formed with each of their followers The Vertical Dyad – Leader’s relationship to a work unit viewed as a series of vertical dyads Vertical Dyads Chapter 8 - Leader-Member Theory Early Studies Leader’s work unit as a whole was viewed as a series of vertical dyads; leader forms unique relationship with each subordinate Chapter 8 - Leader-Member Theory Early Studies, cont’d. Researchers found two general types of linkages (or relationships) – those based on: – Expanded/negotiated role responsibilities (extra-roles) = in-group Relationships marked by mutual trust, respect, liking, and reciprocal influence Receive more information, influence, confidence, and concern than out-group members – Formal employment contract (defined-roles) = out-group Relationships marked by formal communication based on job descriptions Chapter 8 - Leader-Member Theory Early Studies, cont’d. In-group/out-group status based on how well subordinate works with the leader and how well the leader works with the subordinate How subordinates involve themselves in expanding their role responsibilities with the leader determines whether they become in-group or out-group participants Becoming part of the in-group involves subordinate negotiations in performing activities beyond the formal job description Chapter 8 - Leader-Member Theory In-Group & Out-Group Subordinates S S Out-Group Leader S S S S S S S Subordinate In-Group S S S S In-Group – more information, influence, confidence & concern from Leader – more dependable, highly involved & communicative than out-group Out-Group – less compatible with Leader – usually just come to work, do their job & go home Chapter 8 - Leader-Member Theory Later Studies (Graen & Uhl-Bien, 1995) Initial research primarily addressed differences between in-groups and out- groups; later research addressed how LMX theory was related to organizational effectiveness Later research focus on the quality of leader-member exchanges resulting in positive outcomes for: – Leaders – Followers – Groups – Organizations in general Chapter 8 - Leader-Member Theory Later Studies (Graen & Uhl-Bien, 1995) Researchers found that high-quality leader-member exchanges resulted in: – Less employee turnover – More positive performance evaluations – Higher frequency of promotions – Greater organizational commitment – More desirable work assignments – Better job attitudes – More attention and support from the leader – Greater participation – Faster career progress “Leadership Making” Chapter 8 - Leader-Member Theory Leadership Making (Graen & Uhl-Bien, 1995) A prescriptive approach to leadership that emphasizes that a leader should develop high-quality exchanges with all of her or his subordinates, rather than just a few. – Three phases of leadership making which develops over time: (a) stranger phase (b) acquaintance phase (c) mature partnership phase Chapter 8 - Leader-Member Theory Phases in Leadership Making Graen & Uhl-Bien (1995) Scripted One Way Low Quality Self Chapter 8 - Leader-Member Theory Leadership Making Graen & Uhl-Bien (1995) Phase 1 Stranger • Interactions within the leader-subordinate dyad are generally rule bound • Rely on contractual relationships • Relate to each other within prescribed organizational roles • Experience lower quality exchanges • Motives of subordinate directed toward self-interest rather than good of the group Chapter 8 - Leader-Member Theory dership Making Graen & Uhl-Bien (1995) Phase 2 Acquaintance • Begins with an “offer” by leader/subordinate for improved career-oriented social exchanges • Testing period for both, assessing whether - the subordinate is interested in taking on new roles - leader is willing to provide new challenges • Shift in dyad from formalized interactions to new ways of relating • Quality of exchanges improve along with greater trust & respect • Less focus on self-interest, more on goals of the group Chapter 8 - Leader-Member Theory Leadership Making Graen & Uhl-Bien (1995) Phase 3 Mature Partnership • Marked by high-quality leader-member exchanges • Experience high degree of mutual trust, respect, and obligation toward each other