Suppose you’re an associate at a tax firm. If the firm needs to go for an audit and your manager is confident enough to let you take charge, you’ll find that you’ve become more productive, responsible and confident. 

But if your manager doesn’t support your working style, you’ll probably shy away from taking initiative. It’s important to have an open relationship with your manager so that they can help you realize your full potential.

Today, companies support equal distribution of responsibilities and duties. Floor plans are open and there are no cabins separating seniors from associates. Unlike traditional workplaces, where there’s a clear hierarchy, in a flat organizational structure, leaders and members rely on each other.

There’s an important relationship between a leader and the team members. This relationship has a direct impact on the day-to-day activities of any organization. To be a successful professional, you have to align your skills, abilities and motivations not just with your organization but also with the senior management.

We can understand this critical workplace relationship with a well-known concept known as the leader-member exchange theory or the LMX theory of leadership. The direct relationship between a leader and the team members must be built on trust and exchange of ideas. With mutual respect and understanding, you can work well with your manager to achieve both your personal and professional goals.

Let’s discuss the characteristics of the leader-member exchange leadership theory to understand how it can help you improve your performance.

Leader-Member Exchange Theory

The LMX theory of leadership directly relates to the relationship between leaders and team members. It studies the impact this relationship can have on an organization and its members. A positive relationship will result in increased productivity and effective results, whereas a negative relationship can cause workplace conflicts.

When you’re working with senior members of the organization, you aspire to do well and contribute in the best way possible. You’ll be keen for your manager to be supportive of your efforts and value your contribution. But sometimes a manager may be hard-pressed to follow-up with each of the team members, which may result in someone being overlooked. So, it becomes important for a leader to build a rapport with each member of the team. There are two branches of the LMX theory:

  1. Role Taking

When you join an organization, you’re in the first stage of building a relationship with your manager. The leader-member exchange theory is in its foundational stage; your manager is just getting to know you and your abilities. You have to first get acquainted with the work style that suits the organization.

At this stage, your manager hasn’t as yet built an image or opinion of you so you have the opportunity to stand out from the crowd. The way you conduct yourself and interact with your teammates will determine your role and the responsibilities you’re given in the organization.

  1. Role Making

The second stage of the leader-member exchange is where you begin to settle into your role. You’ll get acquainted with your tasks, work on a schedule and collaborate with different stakeholders. Your manager will assess your abilities and skills to identify the type of worker you are. This is where you have to build trust with your manager so that you can get the opportunities you deserve. Managers tend to categorize their team members into two groups:

  • In-group

The in-group comprises members who are on good terms with their managers. This comes from a place of loyalty and trust. If your manager feels that you’re invested in the organization’s success, you are more likely to be offered more opportunities for success.

  • Out-group

The out-group comprises members who don’t engage directly with the manager. They’re offered fewer opportunities. They are assigned projects that may not play a critical role in achieving organizational goals. If your manager categorizes you as part of this group, they may not have close interactions with you.

But now, the LMX theory has the scope to move beyond these two stages as there is a change in the way organizations structure their management. Classifying members—although subconsciously—into in-groups and out-groups is not permanent. It changes as your role changes within an organization.

The leader-member exchange theory specifically signals a collaborative relationship between leaders and team members. It proposes that a member must follow the leaders of their own will. Harappa Education’s Managing Teamwork course will teach you how you can build a strong rapport with your team to facilitate a trust-based relationship. Learn how to work well with others and prove yourself as an important member of the team. 


Explore topics & skills such as Leaders vs Managers, How to Build Trust in a Team, Teamwork Skills, Rapport Building, What is Team Leading & Teamwork Examples from our Harappa Diaries section and build trust-rich relationships.

Related articles

Discover more from Harappa with a selection of trending blogs on the latest topics in online learning and career transformation