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    The Leader-Member Exchange 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 4-6 page 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

    - Describe the role of relationship development and management in effective leadership and use the concepts in improving leadership effectiveness.
    - Analyze the various leader, follower, cultural, and situational characteristics that contribute to leadership.
    - Apply critical thinking skills to analyze business situations.
    - Use effective communication techniques.

    The response addresses the queries posted in 1496 words with references.

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    Solution Preview

    //The following will shed light on Leader- Member Exchange Theory, the concepts of in-groups and out-groups, observations from a real business situation where these concepts have been seen, major differences between the groups, impact of being in the groups on both the groups as well as on the organization, extent of membership on task related factors and the implication of the leadership and leader's relationship with his followers.//

    Leader- Member Exchange theory

    Leader- Member Exchange theory is about the relationship between the leaders and the members, where a leader uses the tactic of exchanging the role of the former and the latter. Unlike other leadership theories, in this theory both the leader and member are given equal prominence because both have an equal role and considers each and every member of the team as a leader. According to this theory, there are two types of leader member relationship. At work places, it is observed that people make some groups on the basis of character and performances of the other employees. These groups are In Groups and Out Groups (McKenna, 2000).

    // In the following section, the concept of In-groups and Out-groups will be discussed. How these groups are formed automatically in the organization will also be discussed.//

    In- Groups

    People who feel confident working with each other, have a pleasant relation ship with each other, and who are loyal to each other, makes a common group. The members discuss the task giving extra time and efforts and prove responsible. These people share information with each other regularly and get strong positive responses and guidance with each other. These people attract leader's attention and interest automatically. Leader feels that these people are useful in enhancing his leadership power; they show action, perform the job with more responsibility, and naturally come together to form a group. This group is called In- Group.


    The people who die in this group are those who have more to do with their job related task only and want to finish it as soon as possible. They fulfill their obligations towards the organization, do not take initiative and do not want to take any moral responsibility towards the organization. They have a very little dialogue and interaction ...

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