Leader–Member Exchange Theory

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The Leader–Member Exchange (LMX) theory first emerged in the 1970s. It conceptualizes leadership as a process of interaction between leader and follower and centers on the dyadic exchange relationships between both. The leader–follower relationships within work groups are split up into a set of working relationships between a leader and the various members of the work team (Van Breukelen et al. 2006) since it is assumed that different relationships between the leader and every single follower develop. Hence, the leader may have different types of transactions and different kinds of relations with different followers (Van Seters and Field 1990). “For example, each superior may offer one subordinate a substantial amount of interpersonal support and attention … while at the same time he or she offers a second subordinate less support” (Dansereau et al. 1982, p. 84). Following Blau’s (1964) writings on social and economic exchange, LMX theory assumes that leaders and followers are involved in an exchange relationship. Followers follow because they receive something from the leader. In turn, leaders lead as they get something from followers (Messick 2004). Hence, the quality of the exchange relationship is the basic unit of analysis (Van Breukelen et al. 2006). The theoretical approach basically grounds in the writings of Graen (1976), Dansereau et al. (1975), as well as Graen and Cashman (1975). To date, the theory has undergone several stages of development; a first stage where the idea of vertical dyadic linkages was elaborated, a second stage that concentrated on the effects of linkages regarding different exchange qualities, a third stage that deals with the development of dyadic leader–member exchange relationships (the life cycle of leadership making), and a fourth and so far final stage that expands the ideas of the concept to groups and networks (Graen and Uhl-Bien 1995). This chapter does not follow this four-stage development but offers a simpler division into early studies on LMX theory, reflecting the first and second stages described by Graen and Uhl-Bien, and later publications, demonstrating the normative turn in the theory, and concentrating on the development of high-quality leader–member exchange relations (see also Northouse 2004).