LMX Theory

Introduction
LMX Theory describes how Leaders in groups maintain their position and obtain results through a series of interactions with their subordinates LMX theory was originally called Vertical Dyad Linkage. The Leader-Member Exchange theory (shortly LMX theory) occupies a unique position among leadership theories because of its focus on the dyadic relationship between leader and follower.

IDEA 1
Doesnt focus on either leader or follower

IDEA 2
Exchange: Looks at interactions between leader and subordinates

IDEA 3
Introduces the Idea of an IN and OUT group

Relationship Types
Defined Relationships Out Groups
No interest in an equal exchange One Way No extra Input / No extra Output Leader and follower remain formal Minimal interaction between leader and follower Come to work, do your job, Go home!!

Expanded Relationships In Groups

Negotiations take place both ways Influx of information, influence, confidence Two Way Street More involvement and Dependability Do more for me, Ill do more for you!!

Leadership Making The three phases!

Stranger OUT Group
Hierarchical Relationship Monetary Motivation Self - Interested

Acquaintance Transitional
Offer of Exchange Sharing of Ideas Testing Period Respect develops Goal & Self Oriented Leaders should strive to have all subordinates as part of the In Group

Partner IN Group
Mutual Trust Sense of Obligation Reciprocity Favors & Assistance Group & Goal Interest

High Q Low E = ACQ

Low Q Low E = STR

THE EXCHANGE

High Q High E = PRT

Low Q Low E = ACQ

 Follower Attributes
Ability Willingness Initiative

Factors Affecting LMX

Leader Follower Perceptions of Each other

Cognitive Similarities Personal & interpersonal communication Social Exchanges

Situational Factors
Try-outs ( Role Episodes)

Other Factors
Perceived Contractual Breach Decision power of leader in the organisationals hierarchy Task Characteristics Caution Organizational communication to followers

How can LMX be used?

LMX theory works in two ways: it describes leadership and it prescribes leadership
In both - the central concept is the dyadic relationship

Descriptively: To study the leadership

It suggests that it is important to recognize the existence of in-groups & out-groups within an organization Significant differences in how goals are accomplished using in-groups vs. out-groups Relevant differences in in-group vs. out-group behaviors

 Prescriptively: To execute effective leadership strategy

Leader forms special relationships with all subordinates Leader should offer each subordinate an opportunity for new roles/responsibilities

Leader should nurture high-quality exchanges with all subordinates Rather than concentrating on differences, leader focuses on ways to build trust & respect with all subordinates , resulting in entire work group becoming an in-group

Working Model for improving LMX

Identify Out-group
Analyze past performance Draw characteristics

Explore Motivation
Task preferences Career goals Personal Aspirations Leader Follower feedback

Reduce De-motivation Create Partnership

Increase try-outs & role episodes

Criticisms & Biases

How do you measure attitudes & beliefs??
LMX 7 Assumption of mutual trust, loyalty & respect Cannot measure social linkages

Ethical Dilemma Pygmailian Bias

Innovation in Globally Distributed Teams: The Role of LMX, Communication Frequency, and Member Influence on Team Decisions
Ravi S. Gajendran and Aparna Joshi

Proposed Theory
In traditional team settings proximity facilitates a sense of belonging that motivates members to contribute to the team Distributed team settings are characterized by an impoverished team environment lacking the material, social, and symbolic cues that drive engagement with a collective. Leadermember exchange is instrumental for fostering member involvement in globally distributed teams. High-quality LMX is characterized by leaders treating followers as unique individuals, developing ongoing dyadic relationships that are sustained through exchanges of material and socio-emotional resources High-quality LMX could motivate members to provide inputs that influence team tasks and decisions. Member influence on team decisions impacts team innovationthe development of new ideas, processes, products, and procedures

Hypothesis 1: Team dispersion will moderate the positive relationship between LMX and member influence on team decisions such that the relationship will be stronger for teams that are more dispersed.

Hypothesis 2 : Communication frequency with the team leader will moderate the positive relationship between LMX and member influence on team decisions such that the relationship will be strengthened as communication frequency increases.

HYPOTHESIS
Hypothesis 3: The positive relationship between LMX and member influence on team decisions will be jointly moderated by team dispersion and communication frequency with team leader. When communication frequency is high, the relationship will be stronger as team dispersion increases. When communication frequency is low, relationship strength will not depend on the level of team

Hypothesis 4: Team-level member influence on team decisions will be positively related to team innovation.

THEORETICAL FRAMEWORK

METHODOLOGY
Survey was conducted in the software services division of a large multinational Fortune 500 IT company with head quarters in USA Employees surveyed for this study were involved in problem-solving teams

Teams were responsible for resolving complex and unanticipated software- and hardware-related problems from across the globe.
224 responses were reported in all from which a final sample consisted of 167 individuals from 40 teams

A third of the respondents were based outside USA including Europe, Japan, Korea, and Australia.

5 item Measures
Member influence on team decisions Team innovati on. Quality of leader member exchange Commun ication frequenc y with team leader

Team dispersio n

IMPLICATIONS
Member input on team activities and decisions is a critical driver for team innovation The study suggest that high-quality LMX relationships are effective in creating member inclusion and involvement in team decisions in highly dispersed settings when they are accompanied by frequent leadermember communication. For high-dispersion teams, when leadermember communication frequency is low, the advantages to its members from a high-quality LMX relationship are reduced Personalized dyadic exchanges can lead to socialized outcomes benefitting the collective. To accelerate the development of LMX with distant team members, teams should be composed of members whose past performance provides a clear signal of their expertise. The study identifies that a relationship-based leadership approach in the form of LMX in combination with frequent leadermember communication can bring members together and spur team innovation

A team level investigation of the relationship between Leader Member Exchange (LMX) differentiation, and commitment and performance
By M.Le Blanc , Vicente Gonzalez

Abstract
LMX differentiation in relation to team are still relatively rare
Study among 269 Dutch secondary school teachers from 33 different teams tested the hypotheses Teachers completed questionnaires on LMX quality, dissimilarity & team commitment Principals rated team performance Result LMX differentiation is positively related to both outcome variables in teams but with a low LMX-quality median only.

Introduction
LMX theory contends that leaders develop differential types of relationships with each of their subordinate through a series of work related exchanges (Graen & Cashman, 1975 ; Graen & Scandura, 1987)

The development of differential relationships among leaders and the subordinates who directly report to them in their work groups is referred to as LMX differentiation.(Liden & Wayne, 2006)
The main goal of this study is to examine the relationship between LMX differentiation and two relevant outcomes.

LMX differentiation, team performance and affective team commitment

First outcome variable team performance it is key criterion for leadership effectiveness Second outcome variable affective team commitment it can be defined as the individuals emotional attachment to, identification with, and involvement in the team. It is governed by free choice.

LMX median as a moderator

The study tested whether LMX differentiation and team performance and team commitment depends on teams LMX quality median. In the study , LMX-quality median is used rather than mean LMX-quality.

Hypothesis 1a
The median level of LMX within a team moderates the relationship between team-level LMX differentiation and team performance, so that LMX differentiation is positively related to team performance when LMX-quality median is low, but is not related to team performance when LMX-quality median is high.

Hypothesis 1b
The median level of LMX within a team moderates the relationship between team-level LMX differentiation and team members affective commitment to the team, so that LMX differentiation is positively related members affective team commitment when LMX-quality median is low, but is not related to members affective team commitment when LMX-quality median is high.

Hypothesis 2
Dissimilarity among team members regarding work values is positively related to LMX differentiation

Research Framework
LMX Quality Median Dissimilarity among team members

LMX Differentiation

1. Team performance 2. Affective team commitment

Methodology
1. Participants and procedure
Demographics Response rate

2.

Instruments
Team LMX Quality LMX differentiation Dissimilarity among team members Team performance Affective team commitment

3.

Data analysis: Agreement of within team responses, consistency of responses, ANOVA, Boxs M Test, Hierarchical multiple regression

Results
Teams LMX quality median was significantly, positively related to team performance and affective team commitment. Dissimilarity among team members was positively related to LMX differentiation In teams with a high LMX quality median, LMX differentiation is not significantly related to team performance (Beta = -.07; t = -1.23; p>.05); while; for teams with a low LMX quality median (SD < 1) the relationship between LMX differentiation and team performance is significant and positive (Beta = 0.50; t= 2.23; p<.05). These results support Hypothesis 1a.

Continued..
For teams with a high LMX quality median, LMX differentiation is not related to members affective team commitment (Beta = -.06; t = -1.10; p>.05); while; for teams with a low LMX quality median the relationship between LMX differentiation and members affective team commitment is significant and positive (Beta = 0.20; t= 2.10; p<.05). These results support Hypothesis 1b. Perceived dissimilarity among team members regarding work values was positively related to LMX differentiation (Beta = .35; p<.01). Thus Hypothesis 2 is supported as well.

Discussion
Implication for theory and research Practical implications Limitations

Leadermember Exchange (LMX), Job Autonomy, and Creative Work Involvement

Judith Volmer, Daniel Spurk, Cornelia Niessen

INTRODUCTION
Creativity is the generation of novel and useful idea and it is considered to be a key driver for organizational effectiveness and survival Creative work involvement is the extent to which an employee engages his or her time and effort resources in creative processes associated with work Job autonomy is the extent to which employees have a major say in scheduling their work, selecting the equipment they will use, and deciding on procedures to be followed.

HYPOTHESIS
Hypothesis 1 : The quality of leadermember exchange (LMX) will be positively related with creative work involvement.

Hypothesis 2 : Job autonomy will moderate the relationship between the quality of LMX and creative work involvement such that the relationship is stronger for persons with greater job autonomy.

METHODOLOGY
Study was conducted at a large, internationally operating hightechnology firm in Germany.

This site manufactures medical systems (e.g., X-ray apparatuses, nuclear spins). The company had at the time about 2500 employees at the site.
A total of 378 randomly selected employees were asked to participate.

RESULT

Findings revealed that creative work involvement was highest for employees who experienced a good relationship with their leader and who also had greater job autonomy.

IMPLICATIONS
One major finding was that LMX was positively related with creative work involvement under high levels of job autonomy but unrelated with creative work involvement under minimum levels of job autonomy.
This implies that a high-quality LMX relationship, which is associated with many numerous work and non-work outcomes, is not sufficient when employees experience job design constraints

Continued..
High quality of LMX connections at work might also be relevant for work and job involvement as well as for job commitment. LMX alone is positive for creative work involvement but that it can be augmented by granting job autonomy. Persons with disciplinary responsibilities as well as persons with higher education indicated more creative work involvement compared to others.