Leader Member Exchange Theory is an interesting approach to leadership in the workplace. According to LMX, there is a relationship that is formed between the leader and the followers in each setting. “LMX says that leadership is a process that is centered on the interactions between leaders and followers.” (Penn State, 2013) Which would imply that the relationship itself is key to the success or failure of the leader-follower situation. When considering LMX Theory we know that there are two types of groups which have a respective relationship with the leader. “Those that were based on expanded and negotiated role responsibilities… and those that were based on the formal employment contract.” (Northouse, 2012). We are of course talking about In Groups and Out Groups. These terms should be familiar to most as we have dealt with them our whole lives. From childhood to adulthood there are always in groups and out groups. If an group is large enough there can be levels of In and Out Groups within in group.
I would like to consider the effect of in/out groups on leaders themselves. Say you work in a field that has three different shifts. Morning/Afternoon/Midnight: each shift has a group of employees and a supervisor or leader. Each shift will tend to have an in group and an out group. What happens when an entire shift becomes the out group. Let’s say the Midnight shift, due to working during odd hours, less supervision due to working after “closing hours”, becomes an out group as an entire shift. This will affect their relationship within the entire organization. As the leader of that group you can attempt to implement LMX theory and limit the size of the out group and maintain as large in group as possible. However as the leader of the “out group” how will that affect your ability when working with the other leaders.
If we apply LMX theory to this example it would seem that issues will arise. If a manager also has in and out groups with his supervisors, then the supervisors will be at a disadvantage. Which in turn would cause their respective shift to either suffer or prosper depending on their status within a group. This why it is important to apply LMX theory throughout all levels of management within an organization from top to bottom. If this is done correctly then in and out group differences will be minimized throughout, and the relationship will be strengthened across the board.
This shouldn’t come as a surprise as I am sure many people have experienced this before in their careers. Perhaps it is not a shift but a department that is looked at as the “black sheep” or the “problem child” and due to this as a whole is placed in the out-group, along with an supervisor that is assigned to it.
Penn State World Campus (2013). PSYCH 485 Lesson 8: Leader-Member Exchange
Theory (LMX) Retrieved on July 5, 2013, from
Northouse, P. (2012). Leadership: Theory and practice. (6 ed.). Thousand Oaks,
California: Sage Publishing.