Significance and Critique of the Leader-Member Exchange (LMX) Theory

The Link between Employees’ Working Condition and Organizational Performance: An Analysis of Sports Direct



2.3.2    Significance of the Leader-Member Exchange (LMX) Model

The LXM model helps in understanding descriptive leadership theories. It also highlights the fact that management goes beyond dealing with group members as a unit and suggests that managers should take cognizance of building solid relationships with employees in the In-group and Out-group. Simply put, the theory encourages communication as an important management tool that fosters productive interpersonal relationships between managers and staff (Sull., 2003).

However, the LMX model advises administrators to avoid discriminatory practices in their judgements or dealings with staff. Organizational leaders should include every staff in decision-making as well as give them equal opportunities for advancement. Most importantly, all employees should be in the In-group (Northouse., 2016).

2.3.3    Critique of the Leader-Member Exchange (LMX) Model

Schriesheim, Castro and Cogliser (1999) opined that an extensive study is necessary to improve theorization of the LMX model, especially on the adopted processes. Likewise, Uhl-Bien, Maslyn, and Ospina (2012) called for a thorough reassessment of both high and low-rated relationships found in interactions between leaders and their subordinates. Anand et al (2011) also agreed that the LMX theory is at its initial stage of development and needs to further adjustments.

Research shows that the LMX model ignores questions on equality and the fact that members of the Out-group do not have laid-down procedures for joining their counterparts in the In-group with prior consent from the leaders (Harter & Evanecky., 2002). Scandura (1999) also identified the model’s muteness on areas of fairness in leaders’ execution of their responsibilities, including how members confront their supervisors when employees are denies due promotion or salary raise. Other scenarios include when managers deduct salaries without clear explanations on the reasons behind their action, when employees receive punishment without explanations on what offense has been committed, or when a worker experience concerns for wrongdoings and suffers discrimination or retaliation from senior managers within the organization.


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