2.3.4 Relational theory: Leader-Member Exchange (LMX)
Antonakis et al. (2004: 8) describe the relational school as emerging during the
mid 1970s and generating a substantial volume of research. This avenue of
leadership research grew out of Dansereau et al.’s (1975) vertical dyad linkage
(VDL) theory which has since developed into the popular and productive leader-
member exchange (LMX) theory (Graen and Uhl-Bien 1995; Uhl-Bien et al. 2000).
The basis of the vertical dyad linkage (VDL) approach is that leadership
relationship are based on discrete relationships between individual subordinates
and the supervisor/leader, rather than leader-group relationships, which are
measured using averaged rating scores from all team members. It was following
observations of significant variances between individual followers’ rating of the
same leaders that the VDL and LMX theories were developed (Schyns et al. 2008:
773).
LMX theory describes high-quality leader-member relationships as being based on
mutual respect and trust while low-quality leader-member relationships are
characterised more by ‘traditional’ contractually-based, supervisor-led fulfilment
of obligations. High-quality LMX relationships are theoretically beneficial for
subordinates who develop high-quality leader-member relationships as those
subordinates are accorded greater status, influence and benefits. This groups is
often referred to as the ‘in-group’, in contrast to the less-favoured ‘out-group’.
The in-group may also receive more interesting tasks, greater responsibility and a
more participative role in decision-making. Meanwhile, for leaders and
organisations, benefits accrue as, in exchange for the benefits outlined above,
subordinates are expected to work harder and with greater commitment and to
have increased of levels of loyalty to their leader (Yukl 2006: 118).
The specific measurements used to determine the quality of the LMX exchange
relationship have changed considerably since the earlier studies in the mid 1970s
(Graen and Uhl-Bien 1995: 236). Aside from the ‘core’ measurement units of
mutual trust, respect, affection, support and loyalty, other measures such as
negotiating latitude, incremental influence and shared values have also been used
(Yukl 2006: 118). In Yukl’s (1989) review, LMX theory is located, albeit
somewhat tentatively, within the situational group of leadership theories “...in the
sense that leaders treat subordinates differently depending on whether they are
part of the in-group or out-group” (Yukl 1989: 266).