The Vertical Dyad Theory: Understanding Leadership and Employee Relationships

The vertical dyad theory, also known as the leader member exchange theory, explores the relationship between leaders and employees. This theory examines how leaders develop relationships with their employees and maintain their position in the group. The theory suggests that the quality of the relationship between leaders and employees affects decision making, responsibility, and access to resources. The theory also identifies two types of employees: in-group and out-group. In-group members receive more attention, rewards, and responsibility, while out-group members receive less. The leadership exchange process involves role taking, role making, and routinization. This theory has been applied by leaders like Steve Jobs to improve employee motivation and performance.

Running head: LEADERSHIP
LEADERSHIP
Name of Student
Name of the University
Author Note

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The vertical dyad theory or popularly known as the leader member exchange theory,
discuses basically about the ways in which the leaders develop good relationship with their
employees and also maintain their position in the group. There is a two way relationship
between the leader and his followers that connects them. This relationship can be measured in
terms of support, respect, trust and loyalty. According to the theory, the relationship between
the leaders and his employees determines decision making, responsibility of people,
accessibility to resources and others. Therefore there are two kinds of employees on the basis
of relationship that is in group and out group (Martin et al., 2016). The members belonging to
the in-group are given responsibility of complex work and projects, more attention, more
rewards and others. The out-group members comprise of lesser responsibility, lesser attention
and even lesser rewards. Therefore leadership exchange can also lead to conflicts because of
friction by out group members. The Leadership exchange process comprises of – role taking,
role making and routinasation. The role taking is the first stage in which the mangers assess
the skills and knowledge of the employees who have newly joined. Through this step, the
leader gets an image of the employees on the basis of their expressions. In this phase, the
leader and the employees start understanding the ways of working in group and new
opportunities are given to the members by the leaders (Breevaart et al., 2015). Role making
involves carrying out unstructured and informal negotiation regarding job related factors.
This is the stage in which the assigned task is carried out. In this stage, it becomes very
important to build the trust among the two parties. It is at this phase when the leader decides
whether an employee is an in-group employee or out-group employee. In the stage of
routinasation, certain routines, standards and expectations are determined by both the parties.
Steve jobs have been able to apply this theory and get the best out of all the
employees (Krapfl & Kruja, 2015). This is so because he believes in praising the employees-
Steve jobs praises his employees even when things are not completely right. This helps in

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building trust as in the phase of role making (Schoemaker, Heaton & Teece, 2018). He
believes that it is important to listen to employees and therefore he gives opportunity to his
team to take part in open communication with him. Therefore he tries to gain the trust of
people by listening to them. He also believes in challenging his employees and therefore
believes in not agreeing or disagreeing so easily. He shares the accountability of the work
worth his employees that motivates them and makes the respect him as a leader. He leads his
people by making them better and giving them chance for their own development that is the
reason why many people followed him to NeXT from apple irrespective of their job security.
The model of Leader member exchange helps in improving the relationship between the
leader and the member through trust, respect and other values and therefore this model when
applied in the organization can help in motivating the people, improving their morale and
others.

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References
Breevaart, K., Bakker, A. B., Demerouti, E., & van den Heuvel, M. (2015). Leader-member
exchange, work engagement, and job performance. Journal of Managerial
Psychology, 30(7), 754-770.
Krapfl, J. E., & Kruja, B. (2015). Leadership and culture. Journal of Organizational Behavior
Management, 35(1-2), 28-43.
Martin, R., Guillaume, Y., Thomas, G., Lee, A., & Epitropaki, O. (2016). Leader–member
exchange (LMX) and performance: A meta‐analytic review. Personnel
Psychology, 69(1), 67-121.
Schoemaker, P. J., Heaton, S., & Teece, D. (2018). Innovation, dynamic capabilities, and
leadership. California Management Review, 61(1), 15-42.