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Leadership assignment on leader-member exchange theory of leadership in contemporary organisations


Task: To what extent is LMX theory still relevant in contemporary organisations? Use academic references on the LMX theory and provide one or two practical examples from the real world in your leadership assignment.


Leadership is very crucial to organisations. The organisations run on the basis of their organisational leadership. While good leaders can bring success to an organisation, poor leadership could be devastating for the organisation. There are various practices based on leadership which organisations follow to enhance their organisational performance outcome. There are different styles of leadership like autocratic, bureaucratic, transformational, etc. which have situational significance (Priest, Kliewer& Stephens, 2018). The scholars and leaders have also suggested certain models of leadership which when applied to real life settings could be effective. The aim of this leadership assignmentis to find out how effective or relevant is the LMX or the leader-member exchange theory of leadership in contemporary organisations (Wang, Liu & Liu, 2019). The LMX theory of leadership states that the leaders and the managers of the organisation develop a distinct kind of relationship with the other members or employees of the organisation at a level which is dyadic. In short, the leader-member exchange theory of leadership is an approach which is relationship oriented which focuses on the two-way or bi-lateral relationship between the followers and the leaders (Katsaros, Tsirikas&Kosta, 2020). This kind of distinct relationship established in the leadership assignmentcould be defined as strong bonding or high quality work relationship. This might exist between supervisors and the subordinates. Whether this form of relationship is required and has some significance in modern organisations will be analysed in this leadership assignmentessay.

Relevance of LMX Theory in Contemporary Organisations explained in the leadership assignment
Leader-Member Exchange Theory

The leader-member exchange theory or LMX theory of leadership was introduced for the first time during the 1970s. This theory mentioned in the leadership assignmentmainly analyses the relationship which exists between the team members and the managers of an organisation (Gottfredson, Wright &Heaphy, 2020). The team members go through three typical phases in case of the LMX theory of leadership. These three phases include the taking a role or the first stage, the second stage of making a role and the final stage of routinization. During the stage of role making, the team members are categorised into two different groups, namely the out group and the in group.

The theory tells a leader to remain respectful as well as build trusting relationship with each follower in an organization. There are three stages that have been clearly identified in the leadership assignmentby the theory that should exist between a leader and a follower: Taking role: A leader evaluates the talent whenever a new member joins an organization thus providing them prospects to demonstrate their competence.
Making role: Negotiation that is both unstructured as well as informal on work-related aspects occurs between the member as well as the leader. A member who has similar thoughts to that of a leader has more chance to become successful (Li, Furst-Holloway, Masterson, Gales & Blume, 2018).
Routinization: This is regarded as the last phase that helps team associates along with their managers to establish routines. With each passing time, In-group members attempt to live up to anticipations and uphold the loyalty they have with their manager. They often showcompassion, good work ethic as well as perseverance (Ionescu & Iliescu,2021).
While the out group members get lesser face time and fewer opportunities, the out group members get greater opportunities, support and attention. The leader-member exchange theory mentioned in the leadership assignmentoffers the scope of identifying and validating the perceptions which one might have about the members of their team (Al-Musadieqet al, 2018).
Even though LMX theory has not been introduced the way it should have been in a typical management training as well as development programs. Chen, He & Weng (2018) stated that the LMX theory provides several outlooks regarding the way a leader should develop their individual leadership behaviour. Leaders are able to evaluate their personal leadership behaviour from a relationship viewpoint through the LMX theory. The LMX theory addressed in the leadership assignmenthas vast relevancy in contemporary organizations in which leaders are able to create reinforced leader-member exchanges with every follower (Emirza&Katrinli, 2022). A leader in every contemporary organization is able to use the LMX theory at every level.

Impact of LMX Theory
According to Graen, Canedo& Grace (2018), the leader-member exchange theory of leadership is an approach towards leadership where the followers develop a unique form of relation with their leaders. As per the leadership assignmentfindings this relationship is built on the basis of social exchanges. The quality and nature of these social exchanges across the organisation determine the outcome of the employees as well as the organisation as a whole. As per Ibidunniet al (2020), the strength of the relationship between the leader and the follower aligning it with the LMX theory, determines the influence which one can have on the other. It is found in the leadership assignmentthat the creativity of the employees as well as the leaders is boosted by the LMX theory. The emotions of the members of the organisation and the leaders are impacted by the high exchange relation between the two. A high quality of relationship can create an environment of trust and ease for the members of the team or the followers.

As opined by Boon, Den Hartog &Lepak, (2019), the employees and the managers share a partnership relationship if they follow the LMX theory. Both the leaders and the followers reciprocate and share mutual respect, liking and trust. Thus, in the contemporary organisations the LMX theory could have a positive influence. It has been observed in the modern day workplaces that the LMX theory can be implemented to explain the reason behind the leaders being able to create influential social exchanges with their employees or followers and develop desirable relationships. This approach of leadership mentioned in the leadership assignmentfacilitates consistency in connectivity with the followers. The leaders can effectively influence and encourage their followers to achieve higher levels of productivity and teamwork. The followers are often seen to display better effectiveness when the organisation follows the LMX theory (O'Keefe, Peach &Messervey, 2019). The aim of the LMX theory of leadership is to provide an explanation for the impact of leadership on the followers, teams as well as organisations. The theory states that the followers develop a sense of trust for their leaders and organisation (Santoso, 2019). The LMX theory posters emotional enrichment and respect based relation building in the organisation. The soft skills are utilised and the interpersonal relationships are enhanced through the LMX theory of leadership. When the LMX theory nurtures high quality of relationships between leader and followers, the level of job commitment and job satisfaction increases. It is found in the leadership assignmentthat the stress from the job seems low. The two sides exhibit high levels of organisational citizenship behaviour. The motivation level seems high across the organisation and the intention to quit jobs is lower. The LMX theory is relevant in the workplaces today because it breeds healthy work culture, low burnouts and enhanced level of efficiency, effectiveness and productivity along with other positive organisational outcomes (Beatty et al, 2020).

Practical examples mentioned in the leadership assignment
A practical example in the leadership assignmenthas been set to make the concept clearer. In a contemporary organization the structure that is followed diminishes management layers thus sharing information as well as skills across departments. A vice president in the contemporary organization is selected by the CEO. A vice president is known to lead their personal units with their individual amphibious relationships with followers. As a result, the organization structure gets reduced due to the paired relationships that exists between follower and leader (Afshan, Serrano-Archimi&Akram, 2022). The LMX theory mentioned in the leadership assignment, on a lower level reflects on the way line managers use to select few employees in a manufacturing unit to achieve the production quotas of their work entity. Breevaart, Bakker, Demerouti& Van Den Heuvel (2015) stated that the thoughts as well as viewpoints that are present in the LMX theory are applied throughout a contemporary organization that includes both higher as well as lower levels. According to Liao, Hu, Chungand Chen (2017), the LMX theory is also relevant in a contemporary organization as it shows the way an individual initiates leadership networks throughout an organization to support them achieve work more efficiently. The goals of an organization are developed through the LMX theory as it creates network of high-quality corporation that involves calling several individuals to help solve issues. LMX theory makes a leader aware about the way they relate to their followers (Y?k?lmaz&Sürücü, 2021). The leaders learn to remain impartial towards each follower.

In a contemporary organisation, the LMX theory evaluates the extent to which a follower long with its leaders has mutual respect as well as trust for each other. This turn deepens a sense of reinforced obligation to each other. LMX theory authenticates the experience of how individuals within organizations are in connection with each other as well as the leader.

Problem with Leader-Member Exchange Theory
There are certain drawbacks of the leader-member exchange theory of leadership. This is the reason this approach is losing its significance in the contemporary organisations today. The LMX theory addressed in the leadership assignmentassumes that all the employees or all the members of a team are equally trust worthy, efficient and attentive (Chen, He & Weng, 2018). The leaders as per the LMX theory further assume that all these followers can handle the advancements, change management and prestigious projects. Thus, the leaders bestow their followers with huge responsibilities and fail to get the desired outcome from them. The leader may wish to think that every team member or employee is honest; however the truth needs to be acknowledged. It is found in this leadership assignment that the leaders or managers of contemporary organisations often fail because they have unrealistic expectations from their employees. They believe everyone is equally hardworking, honest and worthy of esteem (Lowman & Harms, 2022). These leaders following the relationship based LMX approach are in denial of the reality.

The managers need to extract the best possible outcomes and outputs from their employees. This implies that they need to put the right people in the right place. This suggests reinforcing and developing success. The talented employees should get better opportunities over the others. As per the leadership assignment they also deserve more attention than the rest. To make the LMX theory of leadership a success in the organisational context, the leaders need to be objective while dealing with their employees or team members. They cannot afford to be naïve while applying the theory (Scandura& Meuser, 2022).

Conclusion & Recommendations
It could be concluded from the leadership assignmentthat leader-member exchange theory is mostly relationship-based between a leader and a follower. This theory is related positively with the positive feelings that a follower has towards its leader. This in turn also results in high work creativity in contemporary organizations. Leadership under this theory is defined as a relationship that goes through a maturation procedure. It defines the fact that a leader possesses changing intensity levels in their relationship with followers. It could be confined that a leader who is mature serves his followers through the LMX theory. This theory addressed in the leadership assignmenthelps a leader to identify as well as comprehend insecurities of a follower. As a result, the leader is able to help the follower find the suitable ways to deal with the insecurities. It could also be concluded that the LMX theory makes a leader conscious about the means they relate to their followers. As a result, this theory also has relevancy to a contemporary organization. It could be concluded from the leadership assignmentthat the leaders as per the LMX theory undertakes that all these followers are able to deal with the advancements, change management as well as significant projects.

• It could be recommended that an organization should recognise its out-group in a proper way.
• As a leader, it is recommended that relationship with out-group team associates should be improved. This will not only benefit the team but also the organization.
• It should be ensured that team members should continue learning that will help them to develop in the upcoming days.
• It is also recommended in the leadership assignmentto regard allocating tasks and relegating responsibility so that individuals are evaluating things and using their personal skillset.

Afshan, G., Serrano-Archimi, C., &Akram, Z. (2022). My LMX standing with my leader as compared to my coworkers: conditional indirect effect of LMX social comparison. Leadership & Organization Development Journal.
Al-Musadieq, M., Nurjannah, N., Raharjo, K., Solimun, S., & Fernandes, A. A. R. (2018). The mediating effect of work motivation on the influence of job design and organizational culture against HR performance. Journal of Management Development.
Breevaart, K., Bakker, A. B., Demerouti, E., & Van Den Heuvel, M. (2015). Leader-member exchange, work engagement, and job performance. Journal of Managerial Psychology.
Chen, X. P., He, W., & Weng, L. C. (2018). What is wrong with treating followers differently? The basis of leader–member exchange differentiation matters. Journal of Management, 44(3), 946-971. Emirza, S., &Katrinli, A. (2022). Great minds think alike: does leader-follower similarity in construal level of the work enhance leader-member exchange quality?. Leadership & Organization Development Journal.
Gottfredson, R. K., Wright, S. L., &Heaphy, E. D. (2020). A critique of the Leader-Member Exchange construct: Back to square one. The Leadership Quarterly, 31(6), 101385.
Ionescu, A. F., & Iliescu, D. (2021). LMX, organizational justice and performance: curvilinear relationships. Journal of Managerial Psychology.
Katsaros, K. K., Tsirikas, A. N., &Kosta, G. C. (2020). The impact of leadership on firm financial performance: the mediating role of employees' readiness to change. Leadership & Organization Development Journal, 41(3), 333-347.
Li, J., Furst-Holloway, S., Masterson, S. S., Gales, L. M., & Blume, B. D. (2018). Leader-member exchange and leader identification: Comparison and integration. Journal of Managerial Psychology, 33(2), 122-141.
Liao, S.S., Hu, D.C., Chung, Y.C. and Chen, L.W., 2017. LMX and employee satisfaction: mediating effect of psychological capital. Leadership & Organization Development Journal.
Lowman, G. H., & Harms, P. D. (2022). Addressing the nurse workforce crisis: a call for greater integration of the organizational behavior, human resource management and nursing literatures. Journal of Managerial Psychology, 37(3), 294-303.
Priest, K. L., Kliewer, B. W., & Stephens, C. M. (2018). Kansas Leadership Studies Summit: Cultivating Collaborative Capacity for the Common Good. Journal of Leadership Education, 17(3).
Scandura, T. A., & Meuser, J. D. (2022). Relational dynamics of leadership: problems and prospects. Annual Review of Organizational Psychology and Organizational Behavior, 9, 309-337.
Wang, Z., Liu, Y., & Liu, S. (2019). Authoritarian leadership and task performance: the effects of leader-member exchange and dependence on leader. Frontiers of Business Research in China, 13(1), 1-15.
Y?k?lmaz, ?., &Sürücü, L. (2021). Leader–member exchange as a mediator of the relationship between authentic leadership and employee creativity. Journal of Management & Organization, 1-14.


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