The Leadership Member Exchange Theory Management

Essay add: 11-01-2017, 11:57   /   Views: 4

There are different leadership theories that have been proposed. Some of these are the leadership member exchange theory, transformational leadership theory, path-goal theory and situational approach theory. In this paper the above four theories will be studied in seeking to help the students have a deeper insight into the leadership styles and where they are best applied.

Leadership-member exchange theory

Also known as LMX or vertical dyad linkage theory it seeks to describe how leaders in groups are able to maintain their position by having tacit exchange agreements with their subordinates. Through the special relationship with the leader the in-group members have access to high levels of responsibility, are influential in decision making and are also able to access resources. However, the members of in-group pay for this privilege by working hard, being committed to task objectives and also share more administrative duties. In addition, these members are also expected to show loyalty and commitment to their leader. On the other hand, the members of out-group have little responsibility, have little influence in decision-making and find it hard to access the resources.

The LMX process according to House (1971) has three stages and starts when one joins the group. The first one is the role taking where the member joins the teams and the leader examines his or her capabilities. It is then that the leader decides whether to give this member an opportunity or not. Knox and Inkster (1968) argue that during this stage it becomes important for the leader and the member to lay down a foundation on rules of engagement.

The tacit agreement takes pace in the second phase where the informal arrangement takes place between the leader and the member. The role is created for this member, which also comes with benefits. In return this member is supposed to pay by being dedicated and being loyal. Linville, Fischer and Salovey (1989) observe that at this stage trust building is pivotal. As such if the leader feels betrayed he or she is likely to demote the member to the out-group. This stage also involves other factors such as relationships and the similarity with the leader. A member who has similarity is likely to have positive relationships according to this theory. Similarly, in the case where the leader and the member are of same gender this relationship is also likely to be positive as this informal arrangement is often built on respect. More over, this relationship is likely to be affected by culture and race.

According to Lippman (1982) the third process in LMX theory is routinization. It is in this phase that a continuous social exchange between the two parties is established. This relationship is built on trust and there is a tendency to find a member of senior teams having similarity with their leader. Maas, Ceccarelli and Rudin (1996) add that the members are reasonable, sensitive, empathetic and are able to follow the idea of their leader. On the contrary the members of the out-group have opposite characteristics. In particular, they are likely to be aggressive, sarcastic and egocentric.

Lippman (1982) describes the in-group members as having more confidence, more involved, communicative and being more dependable. In addition, these members go beyond their formal job description and as such the leader reciprocates by expanding their role. The members of the outer group are less compatible with the leader and just report to work, carry out the responsibilities given and go back home. Ainslie (1974) is of the opinion that under this theory the member of the in-group is more productive owing to this social exchange with their leader. Indeed, under LMX there is likely to be less workers turnover, more positive performance, more positive performance evaluations, more promotions, greater participation and support for the leader's vision and positive job attitude (Ainslie, 1975).

This theory has strength as those who contribute more are able to enjoy more benefits than new members of the out-group. It identifies the dyadic relationship and underlines the importance of effective leader member exchanges. However, the leaders need to be careful on whom they allow in the in-group and should only bed one on the work performance only. This should not be based on race, ethnicity, sex or religion. The critics of this find it unfair as the members are treated unequally.

Transformational leadership

According to this theory transformational leadership is a process that changes people. It entails dealing with the emotions, values, standards, ethics and long-term goals. The followers' motives and needs are satisfied by having a visionary leadership. The two parties are bound together in a transformations process.

According to Bass (1990) the leaders transform the followers through:

Making them aware of the importance and the value of the task.

Making the followers understand the importance of focusing on the organizational goals rather than individual interest

Activating their high-order needs

In his argument Bass (1990) finds that charisma is necessary as it helps to invoke positive and strong emotions. In addition, it also causes the followers to identify with the leaders. Charisma is defined as a personality characteristic and gives the holder superhuman powers. It is only possessed by a few and is often regarded to have divine origin. The writer further argues that authentic transformational leadership is based on idealized influence, intellectual stimulation, inspirational stimulation and individualized consideration (Ainsworth, 1963). The idealized influence describes the leaders who have strong role models characteristics. The followers are happy to identify and emulate these leaders. Through inspirational motivation the leaders communicate their high expectations to their followers. They followers become inspired and become a part of the organization's goal and vision. On the other hand, through the concept of intellectual stimulation the followers are made to be more creative and innovative (Graen & Cashman, 1975). This is achieved by the leader giving them the right platform where they challenge their own beliefs and values. The followers are also able to question the values of their leader. By individual consideration the leaders provide an enabling climate in which they listen and address the individual concerns raised by their followers (Granovetter, 1973).

This also based on the three moral aspects which include

The moral character of the leader

The ethical values in the leader's vision. This may either be accepted or rejected by the followers.

The level of the morality of social ethical processes that the followers and the leader use.

However, Burn (1978) looks at transformational leadership as a prowess in which the leaders and followers are engaged in the mutual process of uplifting, motivating others and lifting up the morality. This theory assumes that a leader who has a high moral position is likely to attract a following. It could also be argued that the leaders appeal to the higher ideals and values which the followers are highly attached to. The followers have a shared background on social values and this encourages them to collaborate rather than each following his or her individual interests. It could be argued that leaders who promote this leadership invoke motivation and instill sense of identity and meaning to the workers.

According to a research by Bennis and Nanus the leaders had a clear vision of the future of their establishments (Ainsorth, 1978). In addition, they were social architects and motivated the workers by building trust. This is possible through making a clear position and standing by it. As Bailey (1985) puts it the leaders use creative deployment of self through positive self regard.

According to North House (2007) the theory has been well researched since 1970's and shares similar idea with the expectations of the society. Moreover, this theory treats leadership as a process which takes place between the leaders and the followers. A big emphasis is also is put on the followers' needs vales and morals.

The cons of this theory are that the leader seems to work on his or her own and does not allow input from the followers. It is also elitist and undemocratic and is not likely to work where the decision making is supposed to be a shared responsibility. The four constructs; inspirational motivation, individualized consideration, idealized influence and intellectual stimulation are hard to measure. These constructs are also similar to each other and is hard to make out their difference.

A questionnaire ideal for this theory

Not at all once in while sometimes Fairly Often Frequently


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