CHERRY DAWN A.

APATAN
MAED 211 Midterm
Directions: Answer the questions extensively by giving examples, insights and
citations in the work area. Every correct and complete answer is given 20 points.
In what way when Leader-Member Exchange Theory may happen in an
organization. Give concrete examples. (20pts.)

The Leader-Member Exchange Theory (LMX), also called the Vertical Dyad Linkage
Theory, describes how leaders maintain their position in groups and how relationships develop
with other members of a team that can contribute to growth or hinders development. The basic
idea behind the leader-member exchange (LMX) theory is that leaders form two groups, an in-
group and an out-group, of followers. In-group members are given greater responsibilities, more
rewards, and more attention. The leader allows these members some latitude in their roles.
In addition, The LMX theory focuses on a dyad, that is, the relationship between a
leader and each subordinate considered independently, rather than on the relationship between
the superior and the group. Each linkage, or relationship, is likely to differ in quality. Thus, the
same leader may have poor interpersonal relations with some subordinates and open and
trusting relations with others. The relationships within these pairings, or dyads, may be of a
predominantly in-group or out-group nature. Early in the dyadic connection, a leader starts
either an in-group or an out-group interaction with a member of the group. In-group members
are given more responsibility and invited to participate in decision-making. The leader gives
these team members some leeway in their obligations; in practice, the leader and important
subordinates conduct an informal dialogue to determine the latter's duties.
How does it work in an organization? Role-taking, role-making, and role-routinization are
the three processes that the LMX relationship progresses through. In role-taking, the
relationship starts with the first exchanges between dyads (supervisor and subordinate), and
through these interactions, respect and trust are developed between the two parties. The
following process in (role-making) involves the supervisor choosing a small group of
subordinates with whom to continue building a rapport. This results in a more social and less
commercial conversation between the two parties. Since sentiments of trust, respect, and
gratitude have already begun to grow between the leader and the subordinate, they are willing
to go beyond the legal work contract at this point. As subordinates carry out their duties,
supervisors provide resources including assistance, independence, and increasingly difficult
work assignments. Role-making is therefore formed based on shared expectations and
contributions of important resources. In the final step (role-routinization), the exchanges
between the leader and subordinate are sustained throughout time through collaboration on
various tasks, but because of the leader's limited resources, they only create and sustain high-
quality interactions with a small number of subordinates.