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    Leader-member Exchange (LMX) Model

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    Leader-member Exchange Model

    You have been invited by the human resources manager of a medium-sized company to prepare a "report" on "In Groups and Out Groups." The report will be distributed to departmental VPs and directors.

    In the report you should:

    1. Introduce the concepts of In and Out groups.

    2. Describe a situation where you (or someone you know) were a member of the "In group" and another situation where you (or someone you know) were a member of the "Out group." This should be an example from your own business experience.

    3. Analyze and explain the major differences between the two situations.

    4. Explain how having an in-group and an out-group affected the groups and the organization.

    5. To what extent was membership in either the in-group or the out-group based on task related performance factors? What non-task related factors entered into the decision?

    6. Describe the implications for leadership and a leader's relationship with followers

    Use the Library or other Web resources to support your argument. Be sure to cite your sources using APA Style 6th edition guidelines.

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    Solution Preview

    Yukl (2006) and other scholars suggest that leadership is about influence. A leader influence's a follower's actions, behaviors, and even their perceptions. Leadership, at its foundation, is about relationships (Fairhurst & Sarr, 1996; Goleman, 1998; Yukl, 2006). Leader-member exchange (LMX) theory provides a model for understanding the role-making process between the leader and followers/subordinates. As the role-making process unfolds, the leader establishes individual relationships with each subordinate. Some of these relationships will be high exchange (in-group) and some will be low-exchange relationships (out-groups). The relationship is not only about the leader's influence on the follower, but it is also about the follower's influence on the leader (Yukl, 2006). Leadership certainly is not a one way exchange. Rather, leadership is an exchange between the individuals involved in the relationship.

    Concepts of In and Out-groups

    High exchange relationships are established between the leader and small number of followers, based on compatibility and subordinate performance and dependability (Yukl, 2006). These high-exchange relationships result in the individual becoming a member of the in-group. In-group membership has both benefits and drawbacks. Benefits can include desirable assignments, career advancement, access to organizational resources, and leadership experience/development. Drawbacks can include additional work, sharing leadership administrative tasks, dedication to organizational goals, and expectations of loyalty by the leader (Yukl, 2006). Both the leader and the follower have to commit additional energy to high-exchange relationships.

    Low-exchange relationships are marked by considerably less interaction and influence between the leader and follower. Low-exchange relationships delegate the individual to being a member of the out-group. The low-exchange or out-group member merely completes required tasks in order to draw their salary. This relationship involves little extra effort on the part of the follower or the leader. This type of relationships is transactional in nature (Yukl, 2006).

    In-group and Out-group Examples

    In-group example:

    Within my organization our highest ranking leader has an executive assistant/advisor that has considerable influence on what items receive attention with our agency. This executive assistant does not head a major division within the organization or chair a specific program. The ...

    Solution Summary

    This solution discusses Leader-Member Exchange (LMX) Model. This solution also defines in-groups and out-groups.