The Leader-Member Exchange Theory first emerged in the 1970s. It focuses on the relationship that develops between managers and members of their teams. The theory states that all relationships between managers and subordinates go through three stages.

The goal of LMX theory is to explain the effects of leadership on members, teams, and organizations. According to the theory, leaders form strong trust, emotional, and respect-based relationships with some members of a team, but not with others. LMX theory claims that leaders do not treat each subordinate the same.

The Leader-Member Exchange Theory (LMX), also called the Vertical Dyad Linkage Theory, describes how leaders maintain their position in groups and how they develop relationships with other members that can contribute to growth or hinder development.

Vertical dyad linkage theory9. What is it called in LMX when leaders form a relationship with each of their followers? The vertical dyads form the basis for in-group and out-group formation11.

Leader-member exchange theory has both strengths and weaknesses. LMX makes sense intuitively. We can all understand and feel in-groups and out-groups. LMX makes the relationship between leaders and followers the focus of the leadership process.

The results provided support the view that LMX and empowerment were both significantly associated with employee voice behavior. The positive relationship between LMX and employee voice behavior was stronger when employees received higher levels of empowerment.

What is the relationship between LMX and employee empowerment? in-groups are willing to do more than what is required in their job description to enhance the group’s goals.

Fred Dansereau

As expected, our results are consistent with our three central propositions, that: (1) LMX is a driving force behind subordinates’ social identification and positive affect; (2) LMX are positively related to social identification, positive affect and TMX; and (3) LMX promotes the development of TMX relationships …

LMX has been criticized for its potential to alienate some subordinates, failing to account for the effects of group dynamics and social identity, and failing to provide specific advice on how leaders can develop high-quality relationships.

For followers, applying the concepts of LMX theory is easy: align yourself with the leader, take on extra tasks, and expect positive results. For leaders, LMX offers a greater challenge, because making your team as productive as possible will mean finding ways to turn out-group members into in-group members.

Terms in this set (14) Followers who had higher quality relationships with their leaders were more likely to engage in more discretionary behaviors that benefited the leader and the org.

Authentic leadership theory emphasizes that leaders are free to adopt or develop their own leadership style so long as that style is consistent with their own character and values.

House’s Path Goal Theory. The theory is based on the premise that an employee’s perception of expectancies between his effort and performance is greatly affected by a leader’s behavior. The leaders help group members in attaining rewards by clarifying the paths to goals and removing obstacles to performance.

Path–goal theory assumes that leaders are flexible and that they can change their style, as situations require. The theory proposes two contingency variables, such as environment and follower characteristics, that moderate the leader behavior-outcome relationship.

The last two criticisms of the path-goal theory are it fails to explain how leadership behavior correlates to a follower’s motivation and that the theory is only directed towards the followers, removing the possibilities of followers being able to affect change on leaders (Northouse, 2016).

Advantages of the theory include: It provides a framework for leaders to understand how their style influences the motivation of their subordinates. It’s unique in that it links motivational theory to leadership. It highlights that the role of leaders is to guide and help their subordinates achieve.

Starbucks also apply a Path-Goal Theory. Build a Starbucks as the most recognized and respected brand in the world is the company’s objective.

The path-goal theory states that a leader’s behavior is contingent to the satisfaction, motivation and performance of their employees. The manager’s job is viewed as guiding workers to choose the best paths to reach both their goals as well as the corporation’s goals.

Path–goal theory suggests that it is important for leaders to provide coaching, guidance, and direction for followers, to help followers define and clarify goals, and to help followers around obstacles as they attempt to reach their goals.

He uses motivation, influence and referent power to overcome business obstacles and achieve shared success. Evidence of Howard Schultz transformational leadership qualities are a key component of the Starbucks operation.

democratic

The strategic vision has never changed but expands few more objective missions. After Schultz return as Starbucks CEO, he took several actions that push Starbucks to the new level of differentiation and innovation. Schultz had three main themes: strengthen the core, elevate the experience, and invest and grow.

Starbucks has a matrix organizational structure, which is a hybrid mixture of different features from the basic types of organizational structure. For example, the company’s product-based divisions intersect with functional groups and geographic divisions, which in turn intersect with other parts of the organization.

The matrix structure seems to work for Starbucks, as they maintain effective communication, great product development, efficient production, and exemplary customer service as a result.

Successful Businesses which use the Matrix Organizational Structure. Some successful organizations which have used a Matrix Organizational structure include; Phillips, Caterpillar, and Texas Instruments have all used the Matrix Structure at some point in time.

Leadership

• Kevin Johnson. president and chief executive officer.
• Rachel Ruggeri. executive vice president and chief financial officer.
• Andy Adams. senior vice president, Store Development.
• Tyson Avery.
• Wouleta Ayele.
• Kelly Bengston.
• Luigi Bonini.
• Brady Brewer.