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4.2 Leader-Member Exchange

Use the LMX Questionnaire at the end of chapter 7 in Northouse to measure the leader-follower respect, trust and obligation in your leadership challenge. Based on this analysis, what are the strengths and challenges facing you as the leader?

References:

Northouse, P. G. (2016). Leadership: Theory and practice (7th ed.). Thousand Oaks, CA: Sage Publications. ISBN: 978-1-4833-1753-3

◦Graen, G.B., & Uhl-Bien, M. (1995). Relationship approach to leadership: Development of the leadership-member exchange of leadership over 25 years. Leadership Quarterly, 6(2), 219 – 247. ◦

House, R. (1996). Path-goal theory of leadership: Lessons, legacy, and a reformulated theory. Leadership Quarterly, 7(1), 323-352.

◦Path Goal Case Study: https://www.youtube.com/watch?v=dzVwnPj_na8

Chapter 6: Path-Goal Theory

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Path–Goal Theory Perspective
Conditions of Leadership Motivation
Leader Behaviors & Follower Characteristics
Task Characteristics
How Does PGT Work?
Overview
Peter G. Northouse, Leadership: Theory and Practice, Seventh Edition. © 2016 SAGE Publications, Inc.

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Path–goal theory centers on how leaders motivate followers to accomplish designated goals
Emphasizes the relationship between
the leader’s style
the characteristics of the followers
the work setting
Definition
Peter G. Northouse, Leadership: Theory and Practice, Seventh Edition. © 2016 SAGE Publications, Inc.
Path–Goal Theory (House, 1971) Description

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Path–Goal Theory (House, 1971) Description
Goal – To enhance employee performance and satisfaction by focusing on employee motivation
Motivational Principles (based on Expectancy Theory) – Followers will be motivated if they believe
they are capable of performing their work
that their efforts will result in a certain outcome
that the payoffs for doing their work are worthwhile
Perspective
Peter G. Northouse, Leadership: Theory and Practice, Seventh Edition. © 2016 SAGE Publications, Inc.

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Challenge to Leader
Use a leadership style that best meets followers’ motivational needs
choose behaviors that complement or supplement what is missing in the work setting
enhance goal attainment by providing information or rewards
provide followers with the elements they need to reach their goals
Peter G. Northouse, Leadership: Theory and Practice, Seventh Edition. © 2016 SAGE Publications, Inc.

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Conditions of Leadership Motivation
It increases the number and kinds of payoffs followers receive from their work
Makes the path to the goal clear and easy to travel through with coaching and direction
Removes obstacles and roadblocks to attaining the goal
Makes the work itself more personally satisfying
Leadership generates motivation when
Peter G. Northouse, Leadership: Theory and Practice, Seventh Edition. © 2016 SAGE Publications, Inc.

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Leader Behaviors
Directive Leadership
Leader who gives followers task instruction including:
What is expected of them
How task is to be done
Timeline for task completion
Clear standards of performance
Clear rules & regulations
Peter G. Northouse, Leadership: Theory and Practice, Seventh Edition. © 2016 SAGE Publications, Inc.

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Supportive Leadership
Leader who is friendly and approachable:
Attending to well-being & human needs of followers
Using supportive behavior to make work environment pleasant
Treating followers as equals & giving them respect for their status
Peter G. Northouse, Leadership: Theory and Practice, Seventh Edition. © 2016 SAGE Publications, Inc.
Leader Behaviors

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Participative Leadership
Leader who invites followers to share in the decision making:
Consults with followers
Seeks their ideas & opinions
Integrates their input into group/organizational decisions
Peter G. Northouse, Leadership: Theory and Practice, Seventh Edition. © 2016 SAGE Publications, Inc.
Leader Behaviors

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Achievement-Oriented Leadership
Leader who challenges followers to perform work at the highest level possible:
Establishes a high standard of excellence for subordinates
Seeks continuous improvement
Demonstrates a high degree of confidence in followers’ ability to establish & achieve challenging goals
Peter G. Northouse, Leadership: Theory and Practice, Seventh Edition. © 2016 SAGE Publications, Inc.
Leader Behaviors

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Follower Characteristics
Strong need for affiliation
Friendly and concerned leadership is a source of satisfaction
Supportive Leadership
Preference for Structure
Dogmatic & authoritarian
Leadership provides psychological structure, task clarity, & greater sense of certainty in work setting
Directive Leadership
Peter G. Northouse, Leadership: Theory and Practice, Seventh Edition. © 2016 SAGE Publications, Inc.

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Desire for Control
Internal locus of control
Leadership that allows followers to feel in charge of their work & makes them an integral part of the decision-making process
Participative Leadership
External locus of control
Leadership that parallels followers’ feelings that outside forces control their circumstances
Directive Leadership
Peter G. Northouse, Leadership: Theory and Practice, Seventh Edition. © 2016 SAGE Publications, Inc.
Follower Characteristics

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Perception of their own ability – specific task
As perception of ability and competence goes up, need for highly directive leadership goes down
Directive leadership may become redundant, possibly excessively controlling
Peter G. Northouse, Leadership: Theory and Practice, Seventh Edition. © 2016 SAGE Publications, Inc.
Follower Characteristics

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Task Characteristics
Design of followers’ task
Organization’s formal authority system
Primary work group of followers
Components
Peter G. Northouse, Leadership: Theory and Practice, Seventh Edition. © 2016 SAGE Publications, Inc.

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Task Characteristics
Unclear and ambiguous – Leader needs to provide structure
Highly repetitive – Leader needs to provide support to maintain follower motivation
Weak formal authority – If formal authority system is weak, the leader needs to assist followers by making rules and work requirements clear
Nonsupportive/weak group norms – Leader needs to help build cohesiveness and role responsibility
Task Situations Requiring Leader Involvement
Peter G. Northouse, Leadership: Theory and Practice, Seventh Edition. © 2016 SAGE Publications, Inc.

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Anything in the work setting that gets in the way of followers
They create excessive uncertainties, frustrations, or threats for followers
Leader’s responsibility is to help followers by
Removing the obstacles
Helping followers around them
Assisting with obstacles will increase
Followers’ expectations to complete the task
Their sense of job satisfaction
Obstacles
Peter G. Northouse, Leadership: Theory and Practice, Seventh Edition. © 2016 SAGE Publications, Inc.
Task Characteristics

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How Does the Path–Goal Theory Work?
Focus of Path–Goal Theory
Strengths
Criticisms
Application
Peter G. Northouse, Leadership: Theory and Practice, Seventh Edition. © 2016 SAGE Publications, Inc.

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The leader’s job is to help followers reach their goals by directing, guiding, and coaching them along the way
Leaders must evaluate task and follower characteristics and adapt leadership style to these
The theory suggests which style is most appropriate for specific characteristics
Peter G. Northouse, Leadership: Theory and Practice, Seventh Edition. © 2016 SAGE Publications, Inc.
How Does the Path–Goal Theory Work?

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Path–Goal Theory Approach
Path–goal theory is a complex but also pragmatic approach
Leaders should choose a leadership style that best fits the needs of followers and their work
Path–goal theory provides a set of assumptions about how different leadership styles will interact with follower characteristics and the work situation to affect employee motivation
Focus
Overall Scope
Peter G. Northouse, Leadership: Theory and Practice, Seventh Edition. © 2016 SAGE Publications, Inc.

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Strengths
Useful theoretical framework. Path–goal theory is a useful theoretical framework for understanding how various leadership behaviors affect the satisfaction of followers and their work performance.
Integrates motivation. Path–goal theory attempts to integrate the motivation principles of expectancy theory into a theory of leadership.
Practical model. Path–goal theory provides a practical model that underscores and highlights the important ways leaders help followers.
Peter G. Northouse, Leadership: Theory and Practice, Seventh Edition. © 2016 SAGE Publications, Inc.

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Criticisms
Interpreting the meaning of the theory can be confusing because it is so complex and incorporates so many different aspects of leadership; consequently, it is difficult to implement.
Empirical research studies have demonstrated only partial support for path–goal theory.
It fails to adequately explain the relationship between leadership behavior and worker motivation.
The path–goal theory approach treats leadership as a one-way event in which the leader affects the follower.
Peter G. Northouse, Leadership: Theory and Practice, Seventh Edition. © 2016 SAGE Publications, Inc.

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Application
PGT offers valuable insights that can be applied in ongoing settings to improve one’s leadership.
Informs leaders about when to be directive, supportive, participative, or achievement oriented.
The principles of PGT can be employed by leaders at all organizational levels and for all types of tasks.
Peter G. Northouse, Leadership: Theory and Practice, Seventh Edition. © 2016 SAGE Publications, Inc.

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Chapter 7: Leader-Member Exchange Theory

Overview
LMX Theory Description
LMX Theory Perspective
Early Studies
Later Studies
Phases in Leadership Making
How Does the LMX Approach Work?
Peter G. Northouse, Leadership: Theory and Practice, Seventh Edition. © 2016 SAGE Publications, Inc.

Peter G. Northouse, Leadership: Theory and Practice, Seventh Edition. © 2016 SAGE Publications, Inc.
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Definition
Leader–member exchange (LMX) theory:
conceptualizes leadership as a process
that is centered on the interactions between a leader and followers
Some theories focus on leaders:
trait approach, skills approach, and style approach
Other theories focus on the follower and the context:
situational leadership, contingency theory, and path–goal theory.
Peter G. Northouse, Leadership: Theory and Practice, Seventh Edition. © 2016 SAGE Publications, Inc.

Peter G. Northouse, Leadership: Theory and Practice, Seventh Edition. © 2016 SAGE Publications, Inc.
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Dimensions of Leadership
LMX theory makes the dyadic relationship between leaders and followers the focal point of the leadership process
Peter G. Northouse, Leadership: Theory and Practice, Seventh Edition. © 2016 SAGE Publications, Inc.

Peter G. Northouse, Leadership: Theory and Practice, Seventh Edition. © 2016 SAGE Publications, Inc.
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LMX Theory Description
Development – LMX theory first described by Dansereau, Graen, & Haga (1975); Graen & Cashman (1975); and Graen (1976)
Revisions – Theory has undergone a number of revisions since its inception and continues to be of interest to researchers
Assumption – LMX theory challenges the assumption that leaders treat followers in a collective way, as a group.
LMX – Directed attention to the differences that might exist between the leader and each of his/her followers
Perspective
Peter G. Northouse, Leadership: Theory and Practice, Seventh Edition. © 2016 SAGE Publications, Inc.

Peter G. Northouse, Leadership: Theory and Practice, Seventh Edition. © 2016 SAGE Publications, Inc.
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First studies of LMX called – Vertical Dyad Linkage (VDL)
Focus on the vertical linkages leaders formed with each of their followers
Leader’s relationship to a work unit viewed as a series of vertical dyads

Peter G. Northouse, Leadership: Theory and Practice, Seventh Edition. © 2016 SAGE Publications, Inc.
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Early Studies
Leader’s work unit as a whole was viewed as a series of vertical dyads; leader forms unique relationship with each follower

Peter G. Northouse, Leadership: Theory and Practice, Seventh Edition. © 2016 SAGE Publications, Inc.
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Researchers found two general types of linkages (or relationships)—those based on
Expanded/negotiated role responsibilities (extra-roles) = in-group
Relationships marked by mutual trust, respect, liking, and reciprocal influence
Receive more information, influence, confidence, and concern than out-group members
Formal employment contract (defined-roles) = out-group
Relationships marked by formal communication based on job descriptions

Peter G. Northouse, Leadership: Theory and Practice, Seventh Edition. © 2016 SAGE Publications, Inc.
Early Studies

Peter G. Northouse, Leadership: Theory and Practice, Seventh Edition. © 2016 SAGE Publications, Inc.
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In-group/out-group status based on how well follower works with the leader and how well the leader works with the follower
How followers involve themselves in expanding their role responsibilities with the leader determines whether they become in-group or out-group participants
Becoming part of the in-group involves follower negotiations in performing activities beyond the formal job description
Peter G. Northouse, Leadership: Theory and Practice, Seventh Edition. © 2016 SAGE Publications, Inc.
Early Studies

Peter G. Northouse, Leadership: Theory and Practice, Seventh Edition. © 2016 SAGE Publications, Inc.
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Follower
In-Group
more information, influence, confidence, & concern from leader
more dependable, highly involved, & communicative than out-group
Out-Group
less compatible with leader
usually just come to work, do the job, & go home
In-Group & Out-Group Followers
S

Out-Group
Leader
In-Group

F
F
F
F
F
F
F
F
F
F
F
F
F
F
F
Peter G. Northouse, Leadership: Theory and Practice, Seventh Edition. © 2016 SAGE Publications, Inc.

Peter G. Northouse, Leadership: Theory and Practice, Seventh Edition. © 2016 SAGE Publications, Inc.
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Later Studies (Graen & Uhl-Bien, 1995)
Initial research primarily addressed differences between in-groups and out-groups; later research addressed how LMX theory was related to organizational effectiveness
Later research focus on the quality of leader–member exchanges resulting in positive outcomes for
Leaders
Followers
Groups
Organizations in general
Peter G. Northouse, Leadership: Theory and Practice, Seventh Edition. © 2016 SAGE Publications, Inc.

Researchers found that high-quality leader–member exchanges resulted in
Less employee turnover
More positive performance evaluations
Higher frequency of promotions
Greater organizational commitment
More desirable work assignments
Better job attitudes
More attention and support from the leader
Greater participation
Faster career progress
Peter G. Northouse, Leadership: Theory and Practice, Seventh Edition. © 2016 SAGE Publications, Inc.
Later Studies (Graen & Uhl-Bien, 1995)

Later Studies
Gerstner and Day (1997)
LMX consistently related to member job performance, overall satisfaction, supervisor satisfaction, commitment, role conflict and clarity, turnover intentions.
Support for psychometric properties of LMX Questionnaire
Ilies, Nahrang, and Morgeson (2007)
Meta-analysis of 51 research studies
Positive relationship between LMX quality and citizenship behaviors (discretionary employee behaviors that go beyond the prescribed role, job description, or reward system.
Peter G. Northouse, Leadership: Theory and Practice, Seventh Edition. © 2016 SAGE Publications, Inc.

Peter G. Northouse, Leadership: Theory and Practice, Seventh Edition. © 2016 SAGE Publications, Inc.
Leadership Making (Graen & Uhl-Bien, 1995)
A prescriptive approach to leadership that emphasizes that a leader should develop high-quality exchanges with all of her or his followers, rather than just a few.
Three phases of leadership making which develop over time:
(a) stranger phase
(b) acquaintance phase
(c) mature partnership phase
Peter G. Northouse, Leadership: Theory and Practice, Seventh Edition. © 2016 SAGE Publications, Inc.

Scripted
One Way
Low Quality
Self

Leadership Making (Graen & Uhl-Bien, 1995)
Stranger
Interactions within the leader-follower dyad are generally rule bound
Rely on contractual relationships
Relate to each other within prescribed organizational roles
Experience lower-quality exchanges
Motives of follower directed toward self-interest rather than good of the group
Phase 1
Peter G. Northouse, Leadership: Theory and Practice, Seventh Edition. © 2016 SAGE Publications, Inc.

Leadership Making (Graen & Uhl-Bien, 1995)
Begins with an “offer” by leader/follower for improved career-oriented social exchanges
Testing period for both, assessing whether
the follower is interested in taking on new roles
leader is willing to provide new challenges
Shift in dyad from formalized interactions to new ways of relating
Quality of exchanges improves along with greater trust & respect
Less focus on self-interest, more on goals of the group
Phase 2
Acquaintance
Peter G. Northouse, Leadership: Theory and Practice, Seventh Edition. © 2016 SAGE Publications, Inc.

Leadership Making (Graen & Uhl-Bien, 1995)
Mature Partnership
Marked by high-quality leader–member exchanges
Experience high degree of mutual trust, respect, and obligation toward each other
Tested relationship and found it dependable
High degree of reciprocity between leaders and subordinates
May depend on each other for favors and special assistance
Highly developed patterns of relating that produce positive
outcomes for both themselves & the organization
Phase 3
Partnerships are transformational – moving beyond self-interest to accomplish greater good of the team & organization

How Does the LMX Theory Approach Work?
Focus of LMX Theory
Strengths
Criticisms
Application
Peter G. Northouse, Leadership: Theory and Practice, Seventh Edition. © 2016 SAGE Publications, Inc.

How Does LMX Theory Work?
LMX theory works in two ways: It describes leadership and it prescribes leadership
In both – the central concept is the dyadic relationship
Descriptively:
It suggests that it is important to recognize the existence of in-groups & out-groups within an organization
Significant differences in how goals are accomplished using in-groups vs. out-groups
Relevant differences in in-group vs. out-group behaviors

How Does LMX Theory Work?
Best understood within the Leadership–Making Model
(Graen & Uhl-Bien, 1995)
Leader forms special relationships with all followers
Leader should offer each follower an opportunity for new roles/responsibilities
Leader should nurture high-quality exchanges with all followers
Rather than concentrating on differences, leader focuses on ways to build trust & respect with all followers, resulting in entire work group becoming an in-group
Prescriptively:
Peter G. Northouse, Leadership: Theory and Practice, Seventh Edition. © 2016 SAGE Publications, Inc.

Strengths
LMX theory validates our experience of how people within organizations relate to one another and the leader
LMX theory is the only leadership approach that makes the dyadic relationship the centerpiece of the leadership process
LMX theory directs our attention to the importance of communication in leadership
Solid research foundation on how the practice of LMX theory is related to positive organizational outcomes
Peter G. Northouse, Leadership: Theory and Practice, Seventh Edition. © 2016 SAGE Publications, Inc.

Criticisms
Inadvertently supports the development of privileged groups in the workplace; appears unfair and discriminatory
The basic theoretical ideas of LMX are not fully developed
How are high-quality leader–member exchanges created?
What are the means to achieve building trust, respect, and obligation? What are the guidelines?
Because of various scales and levels of analysis, measurement of leader–member exchanges is being questioned
Peter G. Northouse, Leadership: Theory and Practice, Seventh Edition. © 2016 SAGE Publications, Inc.

Application
Applicable to all levels of management and different types of organizations
Directs managers to assess their leadership from a relationship perspective
Sensitizes managers to how in-groups and out-groups develop within their work units
Can be used to explain how CEOs strategically develop special relationships with select individuals in upper management
Can be used to explain how individuals create leadership networks at various levels throughout an organization
Can be applied in different types of organizations—volunteer, business, education, and government settings
Peter G. Northouse, Leadership: Theory and Practice, Seventh Edition. © 2016 SAGE Publications, Inc.

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