Submitted Successfully!
To reward your contribution, here is a gift for you: A free trial for our video production service.
Thank you for your contribution! You can also upload a video entry or images related to this topic.
Version Summary Created by Modification Content Size Created at Operation
1
Orhan Uludag
 + 1383 word(s) 1383 2021-08-23 07:58:40 |
2 format correct
Conner Chen
 Meta information modification 1383 2021-09-16 03:31:28 | |
3 format correct
Conner Chen
 Meta information modification 1383 2021-09-16 03:34:12 |

Video Upload Options

Do you have a full video?
Send video materials Upload full video

Confirm

Are you sure to Delete?
Yes No
Cite
If you have any further questions, please contact Encyclopedia Editorial Office.
Uludag, O. Leader—Member Exchange (LMX) Theory. Encyclopedia. Available online: https://encyclopedia.pub/entry/14132 (accessed on 25 April 2024).
Uludag O. Leader—Member Exchange (LMX) Theory. Encyclopedia. Available at: https://encyclopedia.pub/entry/14132. Accessed April 25, 2024.
Uludag, Orhan. "Leader—Member Exchange (LMX) Theory" Encyclopedia, https://encyclopedia.pub/entry/14132 (accessed April 25, 2024).
Uludag, O. (2021, September 13). Leader—Member Exchange (LMX) Theory. In Encyclopedia. https://encyclopedia.pub/entry/14132
Uludag, Orhan. "Leader—Member Exchange (LMX) Theory." Encyclopedia. Web. 13 September, 2021.
Leader—Member Exchange (LMX) Theory
Edit
This entry is adapted from the peer-reviewed paper 10.3390/su13147981

The LMX theory was first described as “Vertical Dyad Linkage” (VDL). Graen and Uhl-Bien (1995) argued that the LMX theory consists of four stages, wherein each stage is related to and builds upon the previous stages. Leader–member exchange (LMX) theorists argue that leaders in the organization should give more responsibility to their followers, delegate powers, support the sharing of work-related knowledge, and allow participation in decision-making processes. LMX theory is a psychological process variable and plays an intermediary role between transformational leadership and knowledge management. 

transformational leadership (TL) knowledge management (KM) organizational performance (OP)

1. Leader—Member Exchange (LMX) Theory

The LMX theory was first described as “Vertical Dyad Linkage” (VDL) [1]. Graen and Uhl-Bien (1995) argued that the LMX theory consists of four stages, wherein each stage is related to and builds upon the previous stages [2]. Leader–member exchange (LMX) theorists argue that leaders in the organization should give more responsibility to their followers, delegate powers, support the sharing of work-related knowledge, and allow participation in decision-making processes [3]. LMX theory is a psychological process variable and plays an intermediary role between transformational leadership and knowledge management [4]. Research has suggested that transformational leadership traits are predictors of leader–member exchange (LMX) theory [5][6][7][8]. LMX theory identifies the specific roles, interpersonal exchanges, and related functions of organizational employees. From the perspective of transformational leadership, leaders ensure organizational success by transferring the vision, mission, and goals of the organization to their followers [9]. Consequently, LMX theory suggests that leaders establish mutual norms and social exchanges with their followers [10].

2. Transformational Leadership

Leadership approaches should meet the needs and expectations of seasonal and full-time employees. It should be noted that there are differences in the contracts, rules, regulations, and policies applied between the work of full-time and seasonal employees [11]. Bass and Avolio (1994) stated that transformational leadership is an individual-level theory bounded by individuals’ perceptions. Additionally, transformational leadership consists of four dimensions related to the behavioral component, which are idealized influence, inspirational motivation, intellectual stimulation, and individualized consideration [12]. Additionally, research indicates that the “effect of spiritual leadership on the three dimensions of customer-oriented boundary-spanning behaviors is fully mediated by spiritual survival and spiritual well-being”, ([13], p. 637). A transformational leader has charisma, inspires followers, increases intellectual stimulation, and promotes individualized consideration [14][15]. The transformational leader should establish a system that is focused on knowledge, and develop new transformational methods by acquiring data that are explicit and implicit within the organization [16][17]. Transformational leadership is a management style that focuses on ideas and encourages subordinates’ risk-taking behaviors, thus developing a network among individuals [17]. Transformational leaders contribute to subordinates’ motivations, provide for their organizational requirements, establish a knowledge substructure, and develop a knowledge management system, in order to ensure knowledge flow by stimulating individualized opinion and intellectual interest [18]. Additionally, a transformational leader influences subordinates by setting both organizational and individual goals [19]. Leaders demonstrate and utilize leadership models, known as either transactional or transformational leadership, that each possesses unique attributes in the context of leading [12]. Transformational leadership positively influences human development and human interaction, and increases teams’ motivation and organizational efficiency [20][21][22].

3. Knowledge Management System

Knowledge management is considered a versatile, multidimensional, and controversial concept [16]. In today’s world, increasing globalization affects the production of knowledge, and the examination of changes in the competitive environment demonstrates that knowledge management is a necessity [23]. Knowledge management has the effect of making organizations faster, more innovative, efficient, and effective. In addition, the concept of management is a term that describes the interaction of knowledge in the organization with environmental effects [24]. The ability of an organization to create and use knowledge is considered to be the most important source of sustainable competitive advantage within knowledge-centered institutions [25]. Knowledge is becoming the most significant resource in the world’s economy, and it provides a competitive advantage. Knowledge management provides a solution to the challenging paradox of organizations [26]. In today’s knowledge-based society, some processes are important to knowledge management, as well as to increasing the production of knowledge, ensuring the flow of knowledge, and interpreting data to accomplish organizational goals [16]. Therefore, knowledge management enables the flow of knowledge that realizes essential competencies within the organization, in order to create, store, share, and evaluate knowledge [27]. The knowledge management infrastructure consists of the organization’s structure, technology, and culture. Knowledge management is a process that consists of four sub-dimensions: acquisition, conversion, application, and protection [28]. Research has indicated that the knowledge management process comprises the capture, transferal, and use of knowledge [29]. The knowledge management process consists of acquiring (collecting knowledge), collaborating (sharing knowledge), integrating (combine knowledge), and experimenting (measuring knowledge) [30].

4. Organizational Performance

Organizational performance is seen as the ultimate dependent variable for researchers in many fields, and is used to measure the fundamental productivity of organizations [31]. The measurement methods that are used to measure organizational performance in different studies differ significantly [32]. Leadership characteristics influence the behaviors of subordinates towards accomplishing organizational goals. Therefore, leadership styles can improve organizational performance [33]. Different leadership approaches are required to increase organizational efficiency and effectiveness under changing global conditions. Previous leadership models are now inadequate in today’s world, leading to failures when managing complex organizations [34]. Furnham (2002) argued that the appropriate measurement method depends on the quality of leadership [35]. In the study conducted by Lim and Ployhart (2004) on Singapore’s army, it was revealed that transformational leadership positively affected team performance [36].

5. Organizational Learning

Organizational learning is defined as a process of the creation and acquisition, dissemination, application, and sharing of knowledge within an organization [37]. According to Nevis et al. (1995), organizational learning is influenced by participatory leadership, systemic thinking, and vision sharing [38]. Additionally, according to research by Garcia-Morales et al. (2006), sharing a vision and team learning are the main issues that affect organizational learning [37]. Organizational learning is a type of leadership in which training is designed and implemented for followers. In other words, organizational learning is the responsibility of the leader. Leaders should create a new environment in which followers can improve their performance, create a vision, and engage in team learning [39].
Organizational learning refers to an organization’s ability to maintain or improve performance, and includes knowledge acquisition, sharing, and utilization [40]. The process of organizational learning incorporates the knowledge created by individuals to increase the organizational knowledge repository. Organizational learning is a dynamic process that relies on interaction in a community, in which individuals convert tacit knowledge into explicit knowledge in the organization [16]. The development of the organization’s abilities and knowledge repository increases the organization’s capability and facilitates organizational learning [39][41].

6. Knowledge Creation Process

Knowledge management is considered an input–output cycle. The process of knowledge management is a phenomenon in which knowledge is used through appropriate methods for accomplishing organizational goals and transforming knowledge into intellectual capital [42]. Lee and Choi (2003) investigated the knowledge creation process adapted from the SECI model, which consists of socialization, externalization, combination, and internalization. The SECI model is a theory that explains the knowledge creation process in four dimensions, and was developed by Nonaka and Takeuchi (1995) [43]. The process of socialization describes how tacit knowledge is transformed into recent tacit knowledge through sharing experiences. The process of externalization converts tacit knowledge into recent explicit knowledge. When tacit knowledge is converted into explicit knowledge, it becomes essential to recent knowledge. The combination process indicates that that explicit knowledge is transformed into more complex explicit knowledge. The process of internalization is that in which explicit knowledge is transformed into tacit knowledge, and individuals access knowledge that is shared in group discussion, meetings, etc., which is then converted into tacit knowledge [44].

7. Job Satisfaction

Job satisfaction is explained as ‘‘a pleasurable or positive emotional state, resulting from the appraisal of one’s job or job experiences’’, ([45], p. 1304). Job satisfaction demonstrates the effective working and emotional satisfaction levels of individuals in their job. Additionally, job satisfaction is recognized as a multidimensional global concept [46]. Job satisfaction and its implications affect job-related variables. Job satisfaction increases the level of motivation, organizational citizenship behavior, job involvement, job performance, etc. On the other hand, it decreases the level of absenteeism, turnover, etc. [46][47][48]. It is observed that more effective organizations meet the needs of their employees, and the more they value their employees, the more work performance increases [49]. Accordingly, the fact that many types of research have been conducted on job performance has revealed that it is important to evaluate both individual job performance and job satisfaction [50].

References

  1. Dansereau, J.F.; Graen, G.; Haga, W.J. A vertical dyad linkage approach to leadership within formal organizations: A longitudinal investigation of the role making process. Organ. Behav. Hum. Perform. 1975, 13, 46–78.
  2. Graen, G.B.; Uhl-Bien, M. Relationship-based approach to leadership: Development of leader-member exchange (LMX) theory of leadership over 25 years: Applying a multi-level multi-domain perspective. Leadersh. Q. 1995, 6, 219–247.
  3. Scandura, T.A.; Graen, G.B. Moderating effects of initial leader–member exchange status on the effects of a leadership intervention. J. Appl. Psychol. 1984, 69, 428.
  4. Herman, H.M.; Mitchell, R.J. A theoretical model of transformational leadership and knowledge creation: The role of open-mindedness norms and leader-member exchange. J. Manag. Organ. 2010, 16, 83.
  5. Basu, R.; Green, S.G. Leader-Member Exchange and Transformational Leadership: An Empirical Examination of Innovative Behaviors in Leader-Member Dyads. J. Appl. Soc. Psychol. 1997, 27, 477–499.
  6. Deluga, R.J. The relationship of leader-member exchange with laissez-faire, transactional, and transformational leadership in naval environments. Impact Leadersh. 1992, 1992, 237–247.
  7. Howell, J.M.; Hall-Merenda, K.E. The ties that bind: The impact of leader-member exchange, transformational leadership and transactional leadership, and distance on predicting follower performance. J. Appl. Psychol. 1999, 84, 680–694.
  8. Wang, H.; Law, K.S.; Hackett, R.D.; Wang, D.; Chen, Z.X. Leader-member exchange as a mediator of the relationship between transformational leadership and followers’ performance and organizational citizenship behavior. Acad. Manag. J. 2005, 48, 420–432.
  9. Burch, T.C.; Guarana, C. The Comparative Influences of Transformational Leadership and Leader-Member Exchange on Follower Engagement. J. Leadersh. Stud. 2014, 8, 6–25.
  10. Graen, G.B.; Scandura, T.A. Toward a psychology of dyadic organizing. Res. Organ. Behav. 1987, 9, 175–208.
  11. Araslı, H.; Arıcı, H.E. The art of retaining seasonal employees: Three industry-specific leadership styles. Serv. Ind. J. 2019, 39, 175–205.
  12. Bass, B.M.; Avolio, B.J. (Eds.) Improving Organizational Effectiveness through Transformational Leadership; SAGE: Thousand Oaks, CA, USA, 1994.
  13. Bayighomog, S.W.; Araslı, H. Workplace spirituality–customer engagement Nexus: The mediated role of spiritual leadership on customer–oriented boundary–spanning behaviors. Serv. Ind. J. 2019, 39, 637–661.
  14. Bass, B.M. Two Decades of Research and Development in Transformational Leadership. Eur. J. Work. Organ. Psychol. 1999, 8, 9–32.
  15. Bass, B.M.; Avolio, B.J. MLQ, Multifactor Leadership Questionnaire Sampler Set: Technical Report, Leader Form, Rater Form, and Scoring Key for MLQ Form 5x-Short; Mind Garden: Redwood City, CA, USA, 2000.
  16. Nonaka, I.; Takeuchi, H. The Knowledge Creating Company: How Japanese Companies Create the Dynamics of Innovation; Oxford University Press: Oxford, UK, 1995.
  17. Senge, P.; Roberts, C.; Ross, R.; Smith, B.; Kleiner, A. The Fifth Discipline Fieldbook; Doubleday: New York, NY, USA, 1994.
  18. Bollinger, A.S.; Smith, R.D. Managing organizational knowledge as a strategic asset. J. Knowl. Manag. 2001, 5, 8–18.
  19. Dvir, T.; Eden, D.; Avolio, B.J.; Shamir, B. Impact of transformational leadership on follower development and performance: A field experiment. Acad. Manag. J. 2002, 45, 735–744.
  20. Margulies, N.; Yukl, G.A. Leadership in Organizations. Acad. Manag. Rev. 1982, 7.
  21. Avolio, B.J. Full Leadership Development: Building the Vital Forces in Organizations; SAGE Publications: Thousand Oaks, CA, USA, 1999.
  22. Bass, B.M. Transformational Leadership: Industrial; Military, and Educational Impact: Mahwah, NJ, USA, 1998.
  23. Picot, A.; Reichwald, R.; Wigand, R.T. Die grenzenlose Unternehmung: Information, Organisation und Management. In Lehrbuch zur Unternehmensführung im Informationszeitalter; Springer: Berlin/Heidelberg, Germany, 2013.
  24. Macharzina, K.; Wolf, J. Unternehmensführung: Das Internationale Managementwissen; Konzepte Methoden Praxis; Springer: Berlin/Heidelberg, Germany, 2008.
  25. Nonaka, I.; Toyama, R. The Knowledge-creating Theory Revisited: Knowledge Creation as a Synthesizing Process. In The Essentials of Knowledge Management; Springer Science and Business Media LLC.: Berlin/Heidelberg, Germany, 2015; pp. 95–110.
  26. Anthes, G.H. Learning how to share. Computerworld 1998, 32, 75–77.
  27. Barrett, P.; Sexton, M. Innovation in Small, Project-Based Construction Firms. Br. J. Manag. 2006, 17, 331–346.
  28. Gold, A.H.; Malhotra, A.; Segars, A.H. Knowledge Management: An Organizational Capabilities Perspective. J. Manag. Inf. Syst. 2001, 18, 185–214.
  29. Davenport, T.H.; De Long, D.W.; Beers, M.C. Building Successful Knowledge Management Projects; Center for Business Innovation Working Paper, January 1997. Available online: https://www.researchgate.net/publication/200045855_Building_Successful_Knowledge_Management_Projects (accessed on 21 June 2021).
  30. Leonard, D. Wellsprings of Knowledge; Harvard Business School Press: Boston, MA, USA, 1995.
  31. Richard, P.J.; Devinney, T.; Yip, G.S.; Johnson, G. Measuring Organizational Performance: Towards Methodological Best Practice. J. Manag. 2009, 35, 718–804.
  32. Kirby, J. Toward a theory of high performance. Harv. Bus. Rev. 2005, 83, 190.
  33. Mathura, V. The Influence of Strategic Leadership in an Organization: A Case Study: Ellerine Holdings Limited. Ph.D. Thesis, Rhodes University, Grahamstown, South Africa, 2009.
  34. Reger, R.K. From the Special Issue Editor Managing in the information age. J. Manag. 2001, 27, 233–234.
  35. Furnham, A. Managers as change agents. J. Chang. Manag. 2002, 3, 21–29.
  36. Lim, B.-C.; Ployhart, R.E. Transformational Leadership: Relations to the Five-Factor Model and Team Performance in Typical and Maximum Contexts. J. Appl. Psychol. 2004, 89, 610–621.
  37. García-Morales, V.; Lopez-Martín, F.; Llamas-Sánchez, R. Strategic factors and barriers for promoting educational organizational learning. Teach. Teach. Educ. 2006, 22, 478–502.
  38. Nevis, E.C.; DiBella, A.J.; Gould, J.M. Understanding Organizations as Learning Systems; MIT: Cambridge, MA, USA, 1997.
  39. Senge, P.M. The Leaders New Work: Building Learning Organizations. Leadersh. Perspect. 2017, 32, 51–67.
  40. DiBella, A.J.; Nevis, E.C.; Gould, J.M. Understanding Organizational Learning Capability. J. Manag. Stud. 1996, 33, 361–379.
  41. Greenwood, D.J.; Argyris, C.; Schon, D.A. Organizational Learning II: Theory, Method, and Practice. ILR Rev. 1997, 50, 701.
  42. Rahimi, H.; Arbabisarjou, A.; Allammeh, S.M.; Aghababaei, R. Relationship between Knowledge Management Process and Creativity among Faculty Members in the University. Interdiscip. J. Inf. Knowl. Manag. 2011, 6, 017–033.
  43. Lee, H.; Choi, B. Knowledge Management Enablers, Processes, and Organizational Performance: An Integrative View and Empirical Examination. J. Manag. Inf. Syst. 2003, 20, 179–228.
  44. Nonaka, I.; Toyama, R.; Konno, N. SECI, Ba and Leadership: A Unified Model of Dynamic Knowledge Creation. Long Range Plan. 2000, 33, 5–34.
  45. Locke, E.A. The nature and causes of job satisfaction. In Handbook of Industrial and Organizational Psychology; Rand McNally: Chicago, IL, USA, 1976; Volume 1, pp. 1297–1343.
  46. Judge, T.A.; Parker, S.; Colbert, A.E.; Heller, D.; Ilies, R. Job Satisfaction: A Cross-Cultural Review. In Handbook of Industrial, Work & Organizational Psychology; SAGE: Thousand Oaks, CA, USA, 2012; pp. 25–52.
  47. Buelens, M.; Kreitner, M.; Kinicki, A. Organizational Behavior; McGraw Hill: New York, NY, USA, 2002; Available online: https://repository.vlerick.com/handle/20.500.12127/475 (accessed on 21 June 2021).
  48. Spector, P.E. Job Satisfaction: Application, Assessment, Causes, and Consequences; SAGE Publications: Thousand Oaks, CA, USA, 1997.
  49. Yun, S.; Takeuchi, R.; Liu, W. Employee self-enhancement motives and job performance behaviors: Investigating the moderating effects of employee role ambiguity and managerial perceptions of employee commitment. J. Appl. Psychol. 2007, 92, 745–756.
  50. Viswesvaran, C. Assessment of Individual Job Performance: A Review of the past Century and a Look Ahead. In Handbook of Industrial, Work and Organizational Psychology: Personnel Psychology Handbook of Industrial, Work and Organizational Psychology: Personnel Psychology; SAGE Publications: Thousand Oaks, CA, USA, 2012; pp. 110–126.
More
© Text is available under the terms and conditions of the Creative Commons Attribution (CC BY) license; additional terms may apply. By using this site, you agree to the Terms and Conditions and Privacy Policy.
Upload a video for this entry
Information
Subjects: Management
Contributor MDPI registered users' name will be linked to their SciProfiles pages. To register with us, please refer to https://encyclopedia.pub/register :
Orhan Uludag
View Times: 864
Revisions: 3 times (View History)
Update Date: 16 Sep 2021
Table of Contents
    1000/1000
    Hot Most Recent
    Feedback