Leader-Member Exchange (LMX) Model

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2.3     Leader-Member Exchange (LMX) Model

Popularly known as a “Dyadic” relationship model, the leader-member exchange theory concentrates the effectiveness of relationships in organizations, particularly how workers and leaders perform in favourable or harsh work conditions. According to the theory, managers often view their subordinates as people with different characteristics, thought-patterns and temperament thus highlighting the need to avoid a one-fits-all leadership style. Harris et al (2011) found that the LMX theory is flawed because it neglected the fact that situations, treatments and relationships vary between leaders and individual followers. However, the theory sought to provide a means through which leaders can build better relationships and help individuals gain satisfaction from their jobs (Büyüközkan & Ilıcak., 2019).

2.3.1  An Assessment of the Leader-Member Exchange (LMX) Model

LXM describes how group leaders can retain their coveted positions through some strategic exchange bargains with members. The LMX process is separated into three: role taking, role making, and reutinization (Uhl-Bien et al., 2012).

Role taking (delegation of tasks)

This stage starts with the induction programme, where leaders have an opportunity to test skills possessed by new employees. Managers/supervisors should familiarize themselves with workers’ capabilities before they start work as “In-group” or “Out-group” members since their qualifications and practical experience were unknown before the employment offer (Nahrgang et al., 2009).

Role making (implementation of tasks)

The role-making stage is where managers/supervisors interact with new recruits through informal and unstructured ways to understand their work attitude, temperament, loyalty, trustworthiness and skills, among others. The collated information is then applied in delegating tasks according to employees’ most productive areas. Bird (1977) notes that through this negotiation process, leaders are able to identify those workers with similar personal traits, which enhances a leader’s chance of being successful.

In-Group and Out-group: Leaders often forge strong bonds with members of an inner group (In-group) who are trusted, appointed as advisors or assistants, given roles with high-level responsibilities, involved in decision-making processes, and given access to resources belonging to the organization. In return, the “In-group” members compensate for these benefits with hard work, dedication given tasks and commitment to achieving organizational goals. On the hand, members of the “Out-group” have levels of trust, influence and relationships with leaders, and are made to work in unfavourable conditions (Yukl, 1994).

Routinization: In this last phase, the leader-staff relationship is established. Members of the “Out-group” express alienation, hate and mistrust for their managers consider that moving out of the “less favoured” group becomes impossible after the perception is established unless they consider changing departments or jobs, in which case, they start from the scratch. Further, after members are classified as “In-group or Out-group” members, even in their subconscious minds, it changes their relationship with managers thereby leading to satisfaction or frustration (Liden et al., 1997).

According to Blanchard et al (1993), organizations should avoid routinization because it has failed as a healthy management practice. It impedes efficiency in the administrative process, hampers productivity, and presents huge threats to sustainability. Ryanair therefore needs some effective strategies to maximize potentials of all employees (Büyüközkan., 2004).

Graen and Uhl-Bien (1995) suggested the following approaches for harmonized relationships in organizations:

Identifying the Out-Group

Managers should conduct unbiased inquiries to know their Out-group members and understand what makes them different from their counterparts. Further, there should be an assessment of completed tasks to ascertain their capabilities. This will confirm the difference between facts and perceptions (Case., 1998).

Re-establishing Relationships

Building better relationships in organizations take a good amount of research and efforts. Understanding the personality traits of each employee and taking cognizance of the fact that workers are aware of their leader’s fair or discriminatory practices will strengthen leader-member relationships, especially where managers are committed to creating a conducive work environment for the good of all (Day & Miscenko., 2016).

Providing Suitable Training and Career Growth Opportunities

Successful leaders are those who ensure that every staff member, from top to bottom, is regularly enrolled for training programmes which enhance their career opportunities and personal growth. Moreover, managers/supervisors should ensure that team members benefit from their direct mentoring or coaching. Ryanair should therefore increase investments in staff training and harmonize relationships for improved performance in tasks and behavioural attitude (Harris et al., 2011).

2.3.2 The Importance of LMX Model

  • The Leader-Member Exchange theory differ from other leadership theories because it concentrates on detailed relationships between managers/supervisors and subordinates.
  • It is an exceptionally explanatory theory, with potentials of enhancing use of every organization’s human capital.
  • It highlights the importance of communication between leaders and followers.
  • It is a practical, tested and proven approach (Day & Miscenko., 2016).

2.3.3  Critical Assessment of the LMX Model

According to Northouse (2016), the LMX theory failed because it did not offer detailed explanations on how leaders and followers forge high-quality exchanges. Further, the theory is criticised for its focus on fairness, with regards to the attention received by followers. These flaws therefore call for an extensive research to improve theorization of the LMX model. Similarly, Uhl-Bien et al (2012) suggested an in-depth evaluation of LMX practices, with focus on reassessing leader-member relationships for details of the low and high-rated interactions.

While Anand et al (2011) argued that LMX is yet at its embryonic stage, highlighting need for improvement, Harter and Evanecky (2002) found that the theory ignored issues on equality of workers and emphasized nonexistence of processes the allows Out-group members to join their In-group counterparts with approval from leaders. The theory also failed to outline how aggrieved members could confront their supervisors when faced with “unfavourable” situations such as discriminatory practices within the organization, salary deductions, undue punishments or denial of opportunities for promotion.