Leader-Member Exchange (LMX) Theory

Leader-Member Exchange (LMX) Theory suggests that leaders develop different relationships with their team members. Some employees may have a closer, more trust-based relationship with their leader, receiving more support, opportunities, and recognition. Others may have a more formal, less personal connection. These varying relationships influence how effectively team members perform and feel about their work. High-quality LMX relationships typically lead to better communication and collaboration, benefiting both employees and the organization. Essentially, the theory highlights that the quality of the leader’s relationship with each team member impacts overall team dynamics and success.