How the Leader-Member Exchange (LMX) Theory Works

2.3       Leader-Member Exchange (LMX) Model

The leader-member model examines the existing relationship between leaders and their subjects. It is also known as the Dyadic relationship framework (Northouse., 2016).

According to Harris et al (2009), most leadership theories portray leaders as seeing their followers to a cluster of people with uniform attitudes, thoughts and temperament who need the same kind of management style. Nonetheless, research shows that managers flawed this assumption after the introduction of LMX theory exposed discrepancies in perspectives held by managers and every member of the group. The LMX or Vertical Dyad Linkage Theory proves how organizational leaders and staff foster relationships and how this promotes individual development.

2.3.1    How the Leader-Member Exchange (LMX) Model Works

The assumption of LMX is that the leadership-follower relationship has three dimensions: role-making, role-taking, and routinization (Uhl-Bien et al., 2012).


At the induction stage of every recruitment process, leaders and supervisors in every organization should have a clear picture of each employee’s skills and capabilities since little is known of group members before employment (Nahrgang et al., 2009).


Through the role-making process, supervisors and managers scrutinize employees to get knowledge of their temperaments, loyalty, work attitudes, characteristics, skills, trustworthiness, commitment to the organization and dedication to work. With the results, managers carefully separate their staff among “In-groups” and “Out-groups” (Atwater & Carmeli., 2009).

In-Group: In every organization, this group of workers are a manager’s favourite because they possess more of the characteristics desired by organizational leaders. These employees also have easy access to managers and possess clear instructions on how to perform their daily tasks. In addition, they have job security with chances of advancement within organizational ranks and partake in the decision-making process. On their part, these “favoured” workers show high level of commitment, work ethics, trustworthiness, and loyalty. They also share the same vison and are most likely to have same personal characteristics with managers (Avolio et al., 2009).

Out-Group: These set of workers defer from those in “Out-groups” because they share no similarities with managers and have less instructions on how to perform their daily tasks. In addition, managers consider Out-group members not dependable, uncommitted, unreliable, and these members do not have chances of advancement. This segmentation among workers often breeds unhealthy competition and inspires tension within the organization (Yukl., 1994).

Routinization: At this stage, an analysis of the leader-staff relationship shows that In-group members maintain solid positions within ranks and regularly impress in their duties whereas workers in the Out-group display negative attitudes, lack of trust and may prove disrespectful to the managers. This highlights the consequences of discriminating against workers within an organization (Blanchard et al., 1993).

Routinization is not a healthy management practice because is hampers smooth administrative process and does not encourage productivity. The management of Sports Direct therefore needs effective corrective measures that can harness workers’ potentials for general good. Anand et al (2011) found the following steps to be useful in harmonizing relationships within an organization:

Identify the Out-Group

Without prejudice, managers and supervisors should conduct thorough inquiries to find out why members of the Out-group do not possess the same characteristics as their counterparts.

Re-establish the Relationship

Managers should implement workable strategies to rekindle cordial leader-staff relationships with members of the Out-group. This starts with a meeting where first-hand information on employees’ emotions, understanding of roles, and expectations from the company. In addition, managers and supervisors should ensure availability of clear procedure for performing tasks, provide the needed support for smooth integration into the management process, and offer opportunities for advancement within ranks to inspire commitment and productivity.

Provide Training and Development Opportunities

Without adequate job trainings, employees find it hard to meet expectations of the managers, therefore, Sports Direct should invest more in staff trainings for both In-group and Out-group members to ensure there is no room for discord. This will aid trust-building between management and staff. In addition, direct coaching from supervisors will have lasting effects on performance and overall behavioural attitude.


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