LMX Theory and Its Relevance to Contemporary Organizations

Leading Strategic Decision Making

Leading Strategic Decision Making
LMX theory is Leader-Member Exchange conveys that leader and follower make a
unique connection which is based on their social interexchange and their quality will
determine the work of the employees. This essay will discuss the relevance of this theory to
contemporary organizations. As well as how this relationship can be maintained within the
leader and follower. Implications of this theory for the workplace will also be discussed
(Omilion-Hodges, and Ptacek, 2021).
Leader-member exchange theory states that knowing the influence leaders have on
their employees can only be recognized when we the type of relationship they have with each
other. Various types of relationships can be made between the employee and employer. The
trust factor is very important where an organization wants a high-quality leader-member
exchange relationship. This high-quality relationship is formed when they are supportive of
each other and understands each other problem, in a high-quality relationship they are ready
to help each other in every way possible for them so that they can maintain this relationship.
Low-quality leader-member exchange is just opposite to the high quality, in this both don’t
have trust in each other. In this low-quality relationship, they don’t support each other and
don’t understand each other which is not beneficial for the company. It is because if they
cannot work with each other then they will not be able to bring profit to the organization
(Graen, Canedo, and Grace, 2018).
This theory is the best suitable in the contemporary organization as the employer
wants to form a relationship with their employees so that they make employees work in the
organization easily. In contemporary organizations employers are very supportive to their
employees while they are working in the organization, they want to have a better relationship
with their employees. While the employees want to give their best to the organization as they
have high quality relationships with their employer. Here both the employers and employees
are satisfied with each other work as they are both giving things the other person needs. But
this theory has some points where the expectations have not been met. Some employees in
the organization don’t have a good relationship with their boss which may be because they
like the traditional work environment and are not able to adjust to the new environment (Bos-
Nehles, and Audenaert, 2019).
Various organizations have LMX theory in their structure for example HUL where the
organization thinks and do efforts to make working easier for the employees. While the

employees there are very dedicated and loyal to the company that they contribute to the profit
of the company. Some companies support their employees by arranging a playgroup floor for
the female employees who have children so that they can work without worrying about their
children. Also, some organizations give break in the career of an employee because of the
reasons stated by the employee and give them a job at the same position when they are ready
to join the organization again. These employees when they work in the organization give
their best to improve the profit of the company (Vuong, and et.al., 2021).
The main factors for the high quality relationship between leaders and followers
should be from both sides, as one side determinants cannot be beneficial for the organizations
as well as the employees. If the employer has to maintain the relationship, then they should
listen to their employee’s problems so that they can support them when they are in need.
Employers should empathize with the employee when employees are in a bad mental state,
this will give a reflection that the employer is concerned for them and they can form a
connection. They should spread awareness of working in a group by highlighting the
importance of working in a group. Employees should also be made aware of the companies’
goals and responsibilities so that they can make effort in that direction.
The employer should persuade their employees to work their best so that they can
grow in their knowledge and contribute to the organization. They should be made aware of
the new technologies adopted in the organization to support and make them effective. The
employer and employee should be able to communicate with each other as well know what
effective communication will benefit the organization as well as the employees. Employers
should be able to implement strong ethical standards and values in the employees so that
employees can remain loyal to the organization and employers.
The follower also has some responsibility such as they should know what knowledge
is required to fulfill a task which is given in the organization. They should be eager to learn
those things which they are not aware of but are important for the organization, this will help
the organization to reach its goals. They should influence the other employees of the
organization to complete their goals effectively and efficiently so that everyone in the
organization can grow and reduce the work of the employer. Employees should be able to
overcome barriers that are there in the way to reach the goal of the organization. They should
be realistic which means they should learn from the mistakes of the leader and should be able