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Stages of leader-member exchange relationships

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The leader-member exchange theory explores how leaders and managers develop relationships with members of their teams. It also explains how this relationship can either help or hinder an individual team member’s personal growth within the organisation.

A link has been found between the behaviours associated with the personality traits of leaders and team members. These behaviours appear to underpin the different phases of the LMX relationship. LMX theory acknowledges the role of personality traits in leader-member relationships.

Specifically, Northhouse (2019, p. 144) highlights that:

Leaders look for followers that exhibit enthusiasm, are more participative in their job-roles, are gregarious and open, and demonstrate a degree of extraversion. Followers are more attentive to leaders who are pleasant, trusting, cooperative and agreeable.

Several different parts or concepts are present in leader-member exchange theory. The steps show how the relationship between the employee and the leader is formed.


The first stage is when the person joins the team. The team leader evaluates their capabilities and talents, and this enables them to decide what opportunities to offer the new member to match their capabilities. This happens quickly, and the leader can offer opportunities for them to demonstrate their capabilities in the form of appointed tasks.


The new team member is carrying out their appointed tasks, and the leader begins to see how devoted they are to the work that needs to be done. Leaders expect staff to work hard, be loyal, and also trustworthy. It is during this stage that leaders either consciously or subconsciously put individuals into either the in-group or the out-group.


In this final phase, routines between team members and their leaders are established. It’s an opportunity for both parties to get an insight into how they both work. Patterns of social exchange are established. Members of the in-group work hard to maintain their reputation and relationships.

Northouse, P. G. (2019). Leadership: Theory & practice. Thousand Oaks, CA: SAGE.
© University of Southern Queensland
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