Leader-Member Exchange Theory

The leader-member exchange (LMX) theory describes how leaders develop "unique" working relationships with each of their subordinates, based on the nature of their social exchanges. Each leader-subordinate relationship differs in terms of both the feelings present and the behaviours demonstrated. Higher-quality relationships are reflected by more positive attitudinal statements, closer emotional ties, and stronger mutual commitment and loyalty, as well as more employee influence and autonomy. Based on these relationships, leaders tend to develop in-groups — those subordinates who are part of their "team"— and out-groups — those who are not.

Research has found that in-group members perform better, have higher levels of satisfaction, tend to be promoted more quickly, and have lower turnover rates. This implies that employees should try to be in the in-group if they desire more rewards. Managers need to be aware that these two distinct groups can develop, with both positive and negative consequences. If the in-group includes practically every employee, then all workers will be more likely to receive these positive outcomes. Out-group members, though, will often feel disenchanted and resentful and lose their team identification and commitment.

Although the theory is somewhat vague on how leader-member exchange rela­tionships develop, some recent research suggests that friendship and the process of forming friendships may be similar to the LMX relationship development process and have similar effects. Simply becoming and remaining friends on the job may be the essential element of positive LMX relationships and may assist the leader in motivating employees.

1. Which of these statements expresses the main idea of the text?

1. The leader-member exchange theory describes how leaders develop "unique" working relationships with each of their subordinates.

2. Each leader-subordinate relationship differs in terms of both the feelings present and the behaviours demonstrated.

3. Based on leader-subordinate relationships, leaders tend to develop in-groups and out-groups.

4. Friendship and the process of forming friendships may be similar to the LMX relationship development process and have similar effects.

2. Find in the text English equivalents of these words and phrases.

1. обмін	8. відображатися	15. означати
2. унікальний	9. твердження, в якому відображається ставлення (до чогось)	16. усвідомлювати
3. службові взаємини	10. близькі емоційні зв’язки	17. позитивні й негативні наслідки
4. соціальні зв'язки	11. сильна взаємна відповідальність і відданість	18. отримати позитивні результати
5. стосунки між лідером і підлеглим	12. задоволення	19. почуватися розчарованим та скривдженим
6. відрізнятися	13. просуватися (по службі)	20. втрачати почуття командного зв'язку й відповідальності
7. з точки зору	14. низький рівень звільнень	21. неясний, невизначений

3. Are these statements true or false? Correct the false ones.

1. Positive attitudinal statements, close emotional ties, strong mutual commitment and employee dependence are signs of excellent relationships.

2. In-group members have been found to perform better, have higher levels of satisfaction, and have lower turnover rates.

3. If the in-group includes practically every employee, then all workers are expected to receive positive results.

4. Becoming and remaining friends on the job may stop the leader from motivating employees.

4. Answer the questions.

1. What is the basis of "unique" working relationships of leaders with their subordinates, according to the leader-member exchange theory?

2. What is the difference between in-groups and out-groups?

3. Can in-groups and out-groups develop only with positive consequences?

4. What are the possible negative consequences that out-group members can receive?

5. Does the leader-member exchange theory clearly show how leader-member exchange relationships develop?

5. Write a summary of the text.

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