LIBERTY UNIVERSITY SCHOOL OF DIVINITY
Assignment Title: Leader-Member Exchange Theory (LMX)
Course: CHMN 699 - Internship
Student: Kristine Sage
Date: January 29, 2022
Professor: Dr. Joel Breidenbaugh
Leader-Member Exchange Theory (LMX)
In-group/Out-group
Leadership studies before 1975 generally addressed the issues from the perspective of the leader
toward their followers. Leader-member exchange (LMX) theory, developed by Dansereau,
Graen, and Haga (1975) emphasized the dyadic (two person) relationships between leaders and
followers. The researchers found that there were two general types of relationships in the
workplace. Those that were linked only by defined roles, job descriptions, and formal contracts
were the out-group, and those that were linked by expanded and mutually-negotiated role
responsibilities were the in-group. In each case, the leader and the follower formed an
individualized working relationship (vertical dyad) that had it own unique characteristics. This
theory, then, recognizes that there is no such thing as consistent leader behavior across all
subordinates, e.g., a leader may be very structured toward one employee and very sociable with
another. This emphasis varies from many studies which look at the average group member’s
relationship with the leader (ALS, average leader style).
Two Types of Relationships
In-group members have a common bond and value system that lends itself toward greater
interaction with the leader. Research generally supports that leaders in these relationships give
more challenging assignments and greater emotional support. These members are more
dependable, have more communication with the leader, and have higher job performance and
satisfaction than the out-group. Relationships in positive dyads result in mutual trust, respect,
and reciprocal influence. Conversely, out-group members have less in common with the leader
and generally receive less information, influence, and fewer challenging assignments.
Communication is formalized, and production is confined to the job description.
Organizational Effectiveness
When researchers tested the theory more recently, the focus appears to avoid any emphasis on in-
groups and out-groups, perhaps because it intuitively seems unfair. Though the theory was not
intended to be discriminatory, nor has it been shown to create inequalities, the authors did not
indicate how members move from the out-group to the in-group if a follower wants to do so.
LMX researchers now emphasize how relationships influence overall organizational
effectiveness. In fact, Graen & Uhl-Bien (1995) found that high quality leader-member
exchanges produced less employee turnover, better job attitudes, plus higher overall
performance, organizational climate, innovation, empowerment, career progress, and other
positive organizational outcomes.
Leadership Making
Graen and Uhl-Bien (1991) also discovered that positive relationships can create networks of
mutual exchange and influence, which they called leadership making. This most recent
approach recommends that leaders develop high quality relationships with all employees in the
work unit, as well as a network of mutually-influencing partnerships throughout the organization.
The LMX researchers recognized that there will be phases in the relationship (stranger,
acquaintance, partnership) as the leader and follower develop trust and respect for one another,
and eventually for the good of the group.
The ideas in LMX can be used throughout all levels of an organization since it draws attention to
the importance of communication in leadership, and helps leaders be aware of the uniqueness of
each employee. However, more research is needed on the means used to actually build the
mutually influential relationships described in this theory.
Implications for church leadership
The very notion of an in-group and an out-group is repugnant to most Christian thinking.
However, we all know such groups generally exist in the church. They are not always developed
by the pastor/leader, but usually exist before the pastor arrives. A new pastor at a church
frequently studies the leadership landscape among the laity to discover who makes up the current
influential in-group, then gets about either working with that group or gradually creating another
in-group. Though the notion of in- and out-groups appears contrary to Christian values, we must
admit that even Jesus had His group of seventy, and even a smaller group of twelve apostles who
formed the in-group among His followers. (In fact, some argue Jesus even had a smaller, more
intimate in-group comprised of Peter, James and John.) Perhaps today’s Christian resistance to
the in- and out-group notion springs more from American equalitarian values than biblical
tradition. Nevertheless, LMX theory has significant implications for church leadership, some of
which may include the following:
1. Church leadership is more than the leader’s actions. It also includes the complex
interactions between the leader and the followers.
2. In many churches, a pastor can seldom discharge members/followers. Indeed, the pastor
is may be employed (and sometimes voted on) by the very followers he or she is
supposed to lead.
3. LMX suggests good leaders are not automatically consistent in their leadership
relationships. In fact, a leader should operate differently with different people—in which
case intentional inconsistency is good.
4. On arrival at a new church, an in-group probably already exists, possibly one established
by the previous pastor. A new pastor will probably work with this in-group at first, and
then gradually develop a revised in-group. Those previously part of the in-group, who
find themselves now a part of the out-group often cause trouble for the pastor.
5. While the notion of in-group and out-group is unacceptable to our ideal ecclesiology, the
more recent work in the area suggests what most church people would have said all
along: the pastor should attempt to develop high quality relationships with all members in
a church wide leadership making ethos. Leader making is the work of a good church
leader.
6. As for many leadership models and theories, the implications are different for large
churches where the senior pastor supervises a large professional staff, and the leadership
work is primarily leader-staff rather than leader-member. These larger churches often
share similar implications of a model with the corporate world.
References
Dansereau, F., Graen, G. G., & Haga W. (1975). A vertical dyad linkage approach to leadership
in formal organizations. Organizational Behavior and Human Performance, 13, 46-78.
Graen, G. G., & Uhl-Bien, M. (1991). The transformation of professional into self-managing and
partially self-designing contributions: Toward a theory of leader-making. Journal of
Management Systems, 3(3), 33-48.
Graen, G. G., & Uhl-Bien, M. (1995). Relationship-based approach to leadership: Development
of leader-member exchange (LMX) theory of leadership over 25 years: Applying a multi-
level multi-domain perspective. Leadership Quarterly, 6(2), 219-247.
