Leader-Member Exchange Theory, also called LMX or Vertical Dyad Linkage Theory, describes how leaders in groups maintain their position through a series of tacit exchange agreements with their members.
In-group and out-group
In particular, leaders often have a special relationship with an inner circle of trusted lieutenants, assistants and advisors, to whom they give high levels of responsibility, decision influence, and access to resources. This in-group pays for their position. They work harder, are more committed to task objectives, and share more administrative duties. They are also expected to be fully committed and loyal to their leader. The out-group, on the other hand, are given low levels of choice or influence.
This also puts constraints upon the leader. They have to nurture the relationship with their inner circle whilst balancing giving them power with ensuring they do not have enough to strike out on their own.
The LMX process
These relationships, if they are going to happen, start very soon after a person joins the group and follow three stages.
- Role taking
The member joins the team and the leader assesses their abilities and talents. Based on this, the leader may offer them opportunities to demonstrate their capabilities.
Another key factor in this stage is the discovery by both parties of how the other likes to be respected.
- Role making
In the second phase, the leader and member take part in an unstructured and informal negotiation whereby a role is created for the member and the often-tacit promise of benefit and power in return for dedication and loyalty takes place.
Trust-building is very important in this stage, and any felt betrayal, especially by the leader, can result in the member being relegated to the out-group.
This negotiation includes relationship factors as well as pure work-related ones, and a member who is similar to the leader in various ways is more likely to succeed. This perhaps explains why mixed gender relationships regularly are less successful than same-gender ones (it also affects the seeking of respect in the first stage). The same effect also applies to cultural and racial differences.
- Routinization
In this phase, a pattern of ongoing social exchange between the leader and the member becomes established.
One of the biggest examples of this is in the halls of every high school in America. There are particular groups of people that are looked upon with great favor and often times given an easy pass through school for who they are or what they do. These people are called to “cool kids” or the popular crowd. These kids are usually on a sports team or are a cheerleader or even have a parent that has a major influence on the school and how they operate. All the while the out group, also known as the freaks, losers, band geeks, etc., are watching with envy and disgust because they feel they are just as important as the football captain or the cheer-leading captain (and they are) even though no-one else sees that. The reason that the LMX theory is so prevalent in High Schools is because of the leaders in place that help fuel the fire and distance of the in and out groups from one another by praising the “important” activities and giving less time and effort to the other activities like band, glee club.
I was a rising soccer star in high school. I was on the varsity team my Freshman year and by my Sophomore year I was being scouted to play at multiple schools and even had a scout from a Major League Soccer (MLS) team interested in me. Needless to say I was shown a lot more freedom and favoritism throughout the school. Mainly because the school would get a lot of positive attention. I was never the type to let stardom cloud who I truly am and I was always friends with everyone. From the freaks, outcasts, popular crowd and the brainiacs. I chose to not pursue my college degree at any of the universities that offered me a full ride nor did I choose to pave my career in professional sports. I was a dumb kid who thought that school was stupid and pointless and that I just wanted to never go to school after high school again. I was an idiot, but no matter what you choose to do in life or where you end up, never forget who you are and never let anyone make yo feel like you don’t belong.
http://changingminds.org/explanations/theories/leader_member_exchange.htm