The Leadership Member Exchange Theory

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.

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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

0 1 2 3 4

Idealized influence (attributes) I go beyond self interest for the good of the group ___

Idealized influence (behaviors) I consider the moral and ethical consequences of decisions ____

Inspirational motivation I talk optimistically about the future ____

Intellectual stimulation I re-examine critical assumptions to question whether they are appropriate ____

Individualized consideration I help others to develop their strengths ____

Situational leadership

The leader need not rely on transactional and transformational methods only and the best cause of action that leader has to take depends on situational factors. Some of the factors likely to affect the situational decisions include motivation and the capability of followers. Yukl (1989) identifies six variables. The subordinate effort is concerned with the motivation and the effort put. The subordinate ability and clarity is concerned with followers understanding their role and how to do it. The organization of work is important and looks at how the work is structured and also the utilization of resources. The other variable is the cooperation and the cohesiveness of the group. The availability of resources and support is also important. Finally, Yukl also cites external condition as the sixth variable and defines the need to collaborate with other groups.

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Tannerbaum and Schmidt (1958) found out that the forces in the situation, in the leader and the followers as the forces leading to the leader’s action. Similar sentiments were shared by Maier (1963) who observed that leaders need to look at the possibility of the followers agreeing with certain a decision and also the importance of carrying out that task. As such the leader is encouraged to take a certain action to avoid the implication of failing to do so. According to this style the leader is meant to come up with the style of leadership depending on the willingness and the commitment of the follower in performing a particular task.

Directing

This becomes necessary where there is low competence and commitment from the follower. The leader is not highly concerned with the relationship between him or her and the follower but makes sure the tasks are carried out. This also becomes necessary as the incompetence is corrected by the role the leader plays. Take for instance a situation where instead of the leader taking a directing role, he or she seeks to find out the reason why the follower is not motivated and why he or she is not capable of carrying out a particular task. This could leave some work undone as the leader will refrain from assigning duties which he feels the follower cannot perform well. The followers also end up having low confidence which affects their output.

Coaching

This applies when the follower has some competence or is over confident on his or her capabilities. Telling such followers what to do may de-motivate them and resistance is likely to result. This makes the leader to look for an alternative on how to work, clarify and explain decisions. This calls for the leader to spend time listening and advising where he or she feels necessary. The follower is able to refine his or her skills through this coaching.

Supporting

This is necessary when the follower can do the job but is not putting in enough commitment. This case differs from the above cases as the leader is not concerned with showing the follower what to do. It also becomes important for the leader to engage with the follower to identify the reasons why he or she is refusing to cooperate. Motivation becomes the key to improving the follower’s performance. The leaders should take time listening and praising the follower whenever he or she makes an achievement.

Delegating

This according to Hersey and Blanchard (1999) is applicable when the follower is highly competent, is highly committed, is motivated and is able and willing to carry out the various tasks assigned. The follower should be left alone to go on with the delegated duties although a distant eye from the leader is necessary. This is necessary in order to monitor how the follower is progressing. Although the followers do not need support and frequent praise it is recommended for the leader to occasionally recognize their efforts.

Normative model

According to Vroom and Yetton (1973), decision on acceptance increases commitment and participation increase decision acceptance. The decision quality helps in selecting the best alternative and is applicable when there are several alternatives. This becomes necessary when there are serious consequences for not doing so. The decision acceptance on the other hand is concerned with the acceptance of the decisions the leader makes. Leaders should focus more on decision acceptance than decision quality. Vroom and Yetton (1973) came up with five different decision procedures. The first one is when the leader knows information and then makes the decision alone. The second one is when he or she obtains the information from the followers and then makes the decision alone. These two are autocratic and the followers are sidelined in the decision making. The leader may also opt to share the problem with the followers individually. He or she then listens for their input and makes the decision alone. Alternatively the leader shares the problem with the followers but this time as a group. He then notes down their ideas but makes the decision alone. These two procedures are consultative and the participation of the followers is valued. Finally the leader may shares the problem with the group and the decision is arrived at through consensus.

However there are situational factors that are likely to affect these five alternatives. The first two methods are not recommended when the followers possess useful information. In addition, this it is not also recommended when the decision quality is pivotal. When the leader sees decision quality as vital but the members do not then group based decision making should be avoided. This is necessary in avoid the implication of the bad decision making where a consensus solution is arrived at. On the contrary, if the leader feels he or she lacks the right skills and information to handle an unstructured problem a collective a decision arrived through consensus becomes appropriate. Similarly, when the decision acceptance is important and the followers are likely to resist an autocratic decision a leader then the first two methods where the leader sources information from them and then makes the decision are inappropriate.

When decision masking is highly valued and the members are unlikely to acceptance each others idea then it is in-appropriate to use the autocratic methods or share the problem with them individually. This is because the differences are unable to be resolved if these methods are used. When the decision quality is not essential but decision acceptance is paramount then a group based decision becomes a must to avoid disgruntled followers. The same case applies when the decision quality is of essence and the followers consent with this.

Path-Goal Theory

The theory was inspired by Mark G. Evans from the expectancy theory. The perception of the degree to which a particular will result to a certain outcome is important (Dawes, 1996). The leaders’ behavior should be source of inspiration to the subordinates and should also be able to motivate them. The theory is based on the idea that the leaders should offer encouragement and support to their followers. This is ensured by rewarding the followers. The leader should also clarify the path to the subordinates so they can make a choice on their own. The leader should also remove the hurdles which stand on the followers’ paths. It is also worthy to point out that the leaders may opt to take a limited or full approach in supporting the members. For instance, the leader may give directions or offer hints. House and Mitchell (1974) argue that under this theory four leadership styles can be found.

Directive leadership

The leader guides the followers appropriately and directs them what to do. This may also entail offering them time-lines on the duties to be carried out and when. This is also recommended where the task given to the members is unstructured. As such the followers are likely to find it hard understanding the role required

Participative leadership

The leaders also consult with their followers before arriving at a decision. This becomes even more important when the insight from the members is likely to be invaluable.

Supportive leadership

In increasing the followers’ work performance it is necessary to show concern for their welfare. The leader should also create a friendly working environment and this is especially recommended where the work is stressful.

Achievement-oriented leadership

The leader sets challenging goals in work and for self-improvement. In such an instance, the leader sets high standards which the followers are encouraged to attain. The leader also places a lot of faith in their ability to perform the tasks assigned. When the role is complex this method becomes appropriate. The leaders are meant to show the way which the members are expected to follow. The leadership should have foresight and should be able to see the way of achieving goals in future. The followers depend on the leader for the guidance.

It also worth mentioning that this theory assumes that the leaders change their leadership styles according to contextual factors. The theory proposes two contingency variables; environment and follower characteristics (Evans, 1970). These variables affect the behavior outcome relationship. The environmental factors determine the type of leader behavior which is appropriate. This is necessary in order to maximize the follower performance. On the other hand, the follower characteristics are concerned with the locus of control, perceived ability and experience (Deci, 1971). These four styles are receptive to the needs of the followers and adapt towards the prevailing situation making the leader to be more effective.