Leader Member Exchange Theory

The Leader-Member Exchange (LMX) theory examines the relationship between leaders and subordinates, highlighting two types: high-quality relationships characterized by mutual trust and respect, and low-quality relationships relying on traditional reward and punishment. The theory explains how individuals move between in-group and out-group status, affecting motivation and performance. High-quality relationships are crucial in people-oriented structures, while reward-based systems are more effective in performance-oriented cultures. Challenges include scalability and favoritism, which can lead to resentment and impact performance. The core of LMX theory is the leader-subordinate relationship's role in effective leadership and motivation.

What characterizes a high-quality leader-member relationship?

• Mutual trust and respect

• Lack of communication

• Strict adherence to rules

• Frequent punishment

In the Leader-Member Exchange model, what is the effect of being in the leader's inner circle?

• Increased need for rewards

• Higher quality relationship

• Less responsibility

• More frequent punishment

What is a potential issue when trying to scale high-quality leader-member relationships?

• Better performance

• More trust

• Dilution of individual connections

• Increased motivation

What can result from perceptions of favoritism in leader-member relationships?

• Improved team morale

• Increased resentment

• Better communication

• Higher productivity

According to the Leader-Member Exchange Theory, what is core to effective leadership?

• Strict rule enforcement

• Leader-subordinate relationship

• High salary

• Frequent meetings