LEADERSHIP | BUSINESS
What Is the Significance of the Leader-Member Exchange?
The relationship between followers and leaders is complex but vital
Most research literature focusses on leadership. In recent times, however, followership has been in the spotlight, and rightly so.
This article explores the ‘Leader-Member’ (LMX) theory, to better understand this unique relationship exchange, as follows:
- What is LMX?
- Research
- Effectiveness
- Evaluation
Without followers there are no leaders.
So let’s take a look at this “relational approach to leadership.”
What is LMX?
LMX theory describes the role-making processes between the leader and each individual subordinate and the exchange relationship that develops over time (Dansereau, Graen & Haga, 1975; Graen, Cashman, 1975).
The basic premise is that leaders establish an exchange relationship with each subordinate as both parties define the subordinate’s role.
High exchange relationship
- Established on the basis of compatibility
- Influenced by a subordinates’ competence and dependability
- Solidified over time (or not)
- Exchange cycle repeats
High-exchange is likely to evolve to the point where there’s a high degree of mutual dependency, engagement, loyalty and support.
This is good for business.
Low-exchange is the polar opposite of high-exchange.
LMX Research
LMX definitions vary, however, LMX characteristics exhibit “mutual trust, respect, affection, support, and loyalty” (Ferris et al, 2009; Schriesheim, Castro & Cogliser, 1999).
That said, more research is needed to appreciate the implications, to measure the ‘unknowns’ about exchange relationships at work.
Some conflict is obvious from the current research:
- Agreement about the “importance of the leader-subordinate relationship is commonplace, but the level of agreement is low” (Yukl, 2013).
- There are no clear reasons for the lack of agreement. Possibly due to the differences in evaluating each relationship.
- Leader ratings are influenced by judgements (and bias) about a subordinate’s loyalty, competence and dependability.
- Subordinate ratings are influenced by how supportive and fair their leader is.
Consistency and congruence is a problem with research so far in order to effectively measure LMX.
LMX Effectiveness
What makes LMX effective?
Personality traits found in both leader and subordinate are factors.
For instance, extraversion and agreeableness in the early stages of a new team tend to predict a more favourable exchange relationship.
A favourable relationship is more likely to perceive a subordinate as competent, once shared values and attitudes, with that of the leader, are present (Yukl, 2013).
Favourable leadership behaviours are more supportive in the following three areas:
- Consultation
- Delegation
- Mentoring
The research proposes that subordinates in a high-LMX environment are “proactive in developing favourable relationships, as opposed to passively accepting” what a leader decides (Yukl, 2013).
This seems like a statement of fact.
Research also indicates that favourable downward exchange relationships correlate with role clarity:
- A higher level of commitment
- A higher level of satisfaction
- Shared values
- Mirrored behaviours, and
- Improved subordinate performance
This again seems like a statement of fact.
One field experiment discovered that “leaders who developed favourable exchange relationships with subordinates” experienced “gains in subordinate performance and satisfaction” (Dirks & Ferrin, 2002).
“A reciprocal exchange mirrors trust.” (Dirks & Ferrin, 2002)
As such, leaders should “endeavour to develop a high-exchange relationship with all subordinates”, not just a few favourites, in order to be “effective leaders” (Garen & Uhl-bien, 1995).
Again, a statement of fact.
The research found that a leader’s upward relationship impacts downward relationships.
A leader with a favourable exchange-relationship with their boss is more likely to establish favourable relationships with his/her subordinates.
Evaluation
Dyadic theory (LMX) definitely needs more longitudinal research to better understand how exchange relationships evolve over time.
Stating facts about humanity or human relationships, while valid, do not seem to be credible research findings.
On that note, below are four observations on LMX research to date:
- We know little about how the role-making process occurs.
- Some studies imply that all exchange relationships evolve in a continuous fashion, starting from an initial impression, forming quickly thereafter and remaining stable over time.
- Other evidence suggests that dyadic (LMX) relationships navigate a series of ups and downs (Fairhurst, 1993).
- Research lacks sufficient situational conditions and how this impacts the development of exchange relationships (Green, Anderson, & Shivers, 1996).
For example, stability, size, function, type of business, underlying processes, and the implications of leadership are not comprehensive.
Flaws
Theories lack a clear description of how a leader develops different dyadic relationships with others, why, and how they affect each other and indeed the wider group performance.
Leaders don’t treat all subordinates the same, we know that, but each person should feel that he or she is a respected member of the team rather than a ‘second-class citizen’ found in a low-exchange relationship.
Resentment among low-exchange members, who believe a leaders’ ‘favourites’ have more benefits than they deserve (Mcclane, 1991). This indicates a bias defect in leadership.
One thing is clear, not all relationships are equal.
Now over to you, what do you think?
I’m talking to you … Yes, you … thought leaders like George, Bill, Chris, Aurora, Rosennab, Michael, Dr Mehmet, Arthur and other leading writers who shared a wonderful selection of articles lately:
