Leadership Development: Etihad Airways - LMX Theory Analysis

The report examines leadership development within Etihad Airways, focusing on the application of Leader-Member Exchange (LMX) theory. It emphasizes the significance of strong leader-employee relationships for organizational success, particularly in a competitive global environment. The report highlights the importance of LMX in fostering better communication, improved employee performance, and sustainable business practices. It also discusses the impact of high-quality exchanges between leaders and employees on an organization's ability to make strategic decisions and gain a competitive advantage. The report references relevant research, including studies on the correlation between LMX and organizational outcomes like turnover intention and OCB (Organizational Citizenship Behavior), and the implications of LMX differentiation within teams. The Etihad Airways case serves as a practical example of how these theories can be applied and how they affect business operations and employee engagement.

Running head: LEADERSHIP DEVELOPMENT
LEADERSHIP DEVELOPMENT
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1LEADERSHIP DEVELOPMENT
Leader-Member Exchange theory (LMX) theory states the relationship-based
approach that aims on the relationship between the leaders and their followers. As the
competitiveness between the organizations are increasing on daily basis, it is becoming more
important to maintain a strong relationship between the leaders and the employees of the
organization like Etihad Airways. The implications is huge for a leader or manager who is in
a leading position in an multinational organization and managing the overall business
operations, where relationships with the employees possess a direct impact on the
productivity of the organization. The main focus is on the employees of the organization
along with the leaders or managers, whose behaviours towards the employees and work-
related attitudes (Harris, Li, & Kirkman, 2014).
Organization like Etihad Airways possess a strong relationship between its leaders
and employees. The high-quality exchange leaders and employees helps an organization to
gain the competitive advantage over its competitors, along with taking the strategic decisions
in a clear way. More exchange between the leaders and their followers or employees will help
the organization to take business related decisions more efficiently, so that it will help to
maintain the profit earning of the organization as well as gaining the competitive edge over
others. If an employee stays in-group, then it will help him or her to exchange discussion with
their leader more effectively, which will improve the individual performance of that
employee as well as the productivity of the organization. Sustainability, thus, can be achieved
if the relationship is maintained properly and ethically (Martin et al., 2016).

2LEADERSHIP DEVELOPMENT
References
Harris, T. B., Li, N., & Kirkman, B. L. (2014). Leader–member exchange (LMX) in context:
How LMX differentiation and LMX relational separation attenuate LMX's influence
on OCB and turnover intention. The Leadership Quarterly, 25(2), 314-328.
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.