LMX Theory: Leadership Term Paper

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Leadership: The LMX Theory

The LMX theory has undergone a number of refinements since its inception approximately four decades ago. Initially, the theory, under the name 'the vertical dyad linkage' (VDL) theory, focused on the inherent dissimilarities between out-group members and in-group members in terms of leadership relationships. Presently, however, the theory places more emphasis on the strength and quality of these leader-subordinate exchanges and their relationship to organizational success. Based on this background, this text highlights the LMX theory from a historical to the present perspective, and outlines how current developments in LMX theory research, particularly the concept of organizational communication, could be incorporated into leadership practice to generate more effective leadership relationships.

The LMX Approach to Leadership

The LMX theory adopts a relationship-based approach, where it postulates that the dyadic connection between a leader and his followers is the central concept of the leadership process. How effective a leader is, therefore, depends primarily on his ability to develop and maintain mature relationships with each of his subordinates (Graen & Uhl-Bien, 1995). In an organizational context, the model attempts to explain how such relationships grow between dyadic partners - including supplier networks, joint venture partners, employees and employee networks, teams and work groups; and how they contribute to organizational success (Northouse, 2012).

The Evolution of the LMX Theory

Early Studies: the very first studies in LMX research sought to explain relationship-based leadership based on the vertical linkages that exist between a leader and each of his subordinates (Northouse, 2012). The theory, then referred to as the vertical dyad linkage (VDL) theory, assumed that the nature of interaction between a leader and each of his followers could be represented in the form of a vertical linkage, where the strength of the linkage symbolized the degree of interaction. Subordinates who interact more with their leader, and who exhibit expanded relationships are regarded as in-group. Such subordinates not only report higher-quality exchanges with the leader, but also have higher levels of trust and respect for him, and a stronger sense of obligation towards the group (Graen & Uhl-Bien, 1995). Such subordinates strive to build a personal relationship with their leader, and as such, they are often very interested in negotiating with him/her on how their role responsibilities could be expanded for the betterment of the group or organization (Northouse, 2012). They often show confidence and concern for their leaders, and are regarded consequently thought to be more dependable.

Then there is the other group of subordinates who, as Northouse (2012) points out, are not as interested in doing extra things for their leader. They are less compatible with him or her, and will usually "just come to work, do their job, and go home" (Northouse, 2012, p. 163). These are referred to as the out-group. The vertical linkage between them and their leader(s) is considerably weak, and is characterized by lower levels of trust, liking, and respect, as well as a lower drive to do anything outside their job description, even when such doing is in the interest of the group.

According to Northouse (2012), such differentiated relationships between a leader and subordinates can be attributed to a number of crucial factors, including one's personality. Introverts, for instance, who are reticent and tend to avoid interactive platforms are more likely to be part of the out-group, whereas extroverts, who often have less difficulty socializing and communicating with others, are more likely to belong to the in-group. Graen and Uhl-Bien (1995) opine that in addition to personality, resource constraints also have a lot to do with the development of differentiated leader-follower relationships. In their view, a leader faces time and resource limitations, and is forced to restrict themselves to only a very small proportion of 'trusted subordinates' that they can effectively manage (Graen & Uhl-Bien, 1995).

Current Studies: rather than focus on the inherent differences between in-group and out-group functions, current LMX research studies place more emphasis on the strength and quality of these leader-subordinate exchanges, and how they contribute to organizational success (Graen & Uhl-Bien, 1995; Graen & Uhl-Bien, 1995). Studies have reported a direct relationship between the quality of exchanges and subordinate loyalty/initiative, job satisfaction, participation and support for the leader, job performance, and organizational commitment (Northouse, 2012). In a study seeking to examine the effect of employee perceptions of relational exchanges on their creativity, energy and performance at work, for instance, Atwater and Carmeli (as cited in Northouse, 2012) reported a positive and direct relationship between higher-quality employee perceptions and their degrees of energy/creativity.

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Well, as Northouse (2012) points out, it is not only the organization that benefits from high-quality leader-subordinate exchanges. In addition to the standard job benefits, in-group employees enjoy a number of secondary benefits, including increased positive feedback from their leader, better communication platforms, and physical access to supervisors, preferential treatment, and of course, better chances of promotion.

Towards this end, both leaders and subordinates ought to strive to build and maintain high-quality vertical exchanges. The first step towards achieving this, as Northouse (2012) points out, is to analyze and assess one's working relationships to identify areas that need improvement. The LMX model provides a questionnaire that aids respondents in assessing their leader-member relationships on a scale of 7 to 35. Scores ranging between 7 and 14 are categorized as 'very low'; 15-19 'low'; 20-24 'moderate'; 25-29 'high'; and 30-35 'very high'. I completed the questionnaire in the subordinate role and attained a score of 34, which can be interpreted to mean that I am more likely to be an in-group subordinate who shows a lot of interest in doing more than just what is prescribed in their job description.

What is evident from the seven items of the LMX questionnaire is that communication is an integral component of relationship building at the organizational level. What is even more important, however, is that through top-down communication, the leader can essentially assist his subordinates in developing high-quality relational exchanges with supervisors. It is only through the leader's feedback that a respondent (a subordinate in my case) would know, for instance, what the leader thinks of their performance (item 1), whether the leader understands their job-related needs (item 2), and whether the leader recognizes their potential (item 3). So, how exactly can a leader foster an environment of communication among members of his team?

Psychologist Bruce Tuckman formulated a five-stage model of group/team development and used it as a framework for explaining the path taken by those teams that are perceived as successful (Friday, 2003). The same model has been adopted to aid in answering the question above. The action plan below demonstrates the specific steps that a leader can take to foster a communication-facilitating environment in each of the five stages of group development -- forming, storming, norming, performing, and adjourning.

Stage

Activities

i) Forming

ii) Storming

iii) Norming

iv) Performing

v) Adjourning

Establish clear objectives and a clear sense of direction for individual members and the team as a whole; and then communicate the same to members. Northouse (2012) points out that membership to either the in-group or the out-group depends on, among other things, one's interest in negotiating what they can do to improve the performance of the group, and their willingness to increase their role responsibilities. These are only possible if members have a clear understanding of what the specific goals of the group are, and what their roles as well as those of other team members in contributing to overall group success.

Establish structures and processes

Foster positive relationships and trust

Resolve conflict swiftly and efficiently, and provide social support beyond the workplace

Maintain a positive attitude, and communicate the same to members, especially when the group faces challenges that threaten its performance or your leadership

Explain to members why problems are occurring, and give the assurance that the situation will get better

Make use of such indicators as the Margerison-Mccan

Team-Management Profile to make members understand the different work strengths and styles;

and how they contribute to organizational success

Organize a team-building event; step back to enable members take personal responsibility towards goal attainment

Delegate duties to pass the message that you recognize your members' ability and potential to execute tasks assigned to them

Look back and celebrate what the team has been able to achieve

Reward your members and let them know that you appreciate their effort

Cultivate a culture of learning from past mistakes

(Source: Eyre, 2014)

Conclusion

The LMX theory provides a clear framework for understanding the role of leader-subordinate interactions in organizational success. It postulates that effective leadership is based on one's ability to develop and maintain high-quality interactions with subordinates. One way to achieve this is through fostering an atmosphere that facilitates organizational communication. Tuckman's five-stage model provides a perfect basis for establishing a communication-facilitating environment among one's group members......

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