Essay on Positive Leader, LMX, and PsyCap Dynamics

This essay delves into the concept of positive leadership within the business environment, focusing on the roles of authentic leadership, Leader-Member Exchange (LMX), and Psychological Capital (PsyCap). It explores how these elements interact to influence employee performance, encompassing aspects such as optimism, self-awareness, and open-mindedness in leaders. The essay highlights the importance of LMX in fostering strong leader-subordinate relationships and the significance of PsyCap, which includes hope, efficacy, resilience, and optimism (HERO), in creating a positive work environment. Furthermore, it examines how different employee groups, such as professionals and administrative staff, require tailored approaches to cultivate their psychological capital. The essay concludes by analyzing the impact of a leader's emotions on employee performance, emphasizing the importance of emotional intelligence and its effect on employee comfort and productivity. The paper argues that authentic leadership, LMX, and PsyCap are essential for building a positive and productive workplace.

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Positive Leader 1
The objective of this essay is to enlighten the reader regarding the details about a positive leader
in the business environment. The essay focuses on the meaning of a leader and their relationship
with leader member exchange and psychological capital as well. Every company present at
marketplace need to have a leader who is efficient enough to manage the functions of the
business otherwise the business will not grow. The paper highlights that how psychological
capital built different type of employees in a worldwide view. It also evaluates how emotions of
leader impact on the performance of the employees working with them. More details about the
essay are mentioned below:
Leadership refers to the activity of leading a group of people and making them do certain tasks in
the environment. A leader is a person with leads the organization and get things done for the
business. The leadership act helps in increasing efficiency of the employees by making them
focus on certain crucial objectives of the business. The leadership activity works by developing a
clear vision statement for the business, through the vision statement the leaders gets to provide
an idea of the activities to their team member in the business environment. Further after
establishing the vision, the leader aims to coordinate the actions of the team members in such a
way that conflicts does not arise at workplace and the work gets done easily. A leader is a person
who takes step up in the crisis and helps the organization overcome it (Popli, and Rizvi 2016).
Leadership involves the process of developing a vision and focusing on it so as to attain an
effective relationship with the employees. A leader possesses several characteristics that make
them different from other team members at workplace. Optimism refers to the process of having
a positive attitude towards every scenario of life. A leader make of this quality to be positive and
make other people positive in critical situations. Optimism helps the leader to find out that there
is scope of improvement and work upon that. Secondly, self-awareness characteristic helps the
leader to proactively take measures to prevent the business from attractive any risk in the
business environment. This characteristic secures the employees and organization from trapping
in issues. A leader needs to be authoritative and opinionative in the business environment
(Huang, and Paterson 2017). This characteristic helps them to effectively take decision on behalf
of the organization and for the better of the organization.
Further, it should be noted that authentic leadership refers to the modern as well as inclusive
approach that helps the leaders to use their qualities in nurturing genuine relationships with the

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team members and then providing importance to the work of employees as well. An authentic
leader is a person who is extremely supportive and motivating for the employees. This type of
leader believes in forming real connective the people he works. Talking about the characteristics
of an authentic leader, it should be noted that an authentic leader is supportive, self-aware, open
minded and truthful. This type of leader is supportive as they encourage the employees to be
open minded and innovative as well. An authentic leader aims to develop the employees
individually as well as in groups. This type of leader stands with the employees so as to provide
them a better decision (Bouckenooghe, Zafar, and Raja 2015). These types of leaders are self-
aware as they focuses on the strengths and weaknesses of the employees and make increase their
productivity as well. This type of leaders focuses on the long term result for the business.
Thirdly, they are open minded as they are always open for new ideas and innovation on the part
of employees of the business. These leaders are truthful as they do not believe in hiding
something from the employees just so as to make things done in the business (Harwiki 2016).
The Leader-Member Exchange Theory (LMX) or Vertical Dyad Linkage Theory refers to the
theory that develops a relationship-based approach to leadership in the business environment that
focuses on the two-way relationship between the leaders and the followers. This theory suggests
that a leader in the market develop an exchange with every subordinate. Every relationship with
the subordinate is different that is based on the leader member exchange. In this relationship,
both the parties share their responsibility, decision and trust on each other. The leader share
resources to the subordinate and subordinate provide their performance to the leader in response
(Asrar-ul-Haq, and Kuchinke 2016). This framework works on the basis of trust and respect
between leader and member that helps them to build up an emotional relationship with each
other and work more effectively. This type of theory promote better working environment for all
the people in the company resulting in which effectiveness in the organization is also increased.
This theory basically explain how leaders and managers in the business develop a strong
relationship with the employees of the company and make them work in the company. The
theory explains three types of relationships between the leader and the subordinate that are role
taking, role making and routinization. The role taking occurs when the member enters in the
group and the leader takes time to analyse the behaviour and characteristics traits present within
them. Role making occurs when the member starts to work in the organization (De Clerq,
Bouckenooghe, and Raja 2019). At this stage, the leader sorts the employees in two teams that

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are in-group and out-group. In-group are the people whom have the trust of leader and the leader
can provide responsibility to them. The employees present in the out group do not have the trust
of the leaders and are restricted to perform certain actions in the business. Thirdly, routinization
is the last phase in which routine between the members and the leaders is established. This
process helps them to build and identified relationship with each other and continues that in long
run (Rego, et. al., 2017).
Further, Psychological Capital is multidimensional core construct system that consists of hope,
optimism, resilience and efficacy. This system strongly connected with the performance of the
employees and their work related attitude as well. This is an approach that initiates positive
psychology among the employees of the company. HERO (Hope, Efficacy, Resilience and
Optimism) are the four aspects that the leader try to in built in the behaviour of the team
members so as to make them work and grow in a positive environment. This type of approach
create a positive working environment for the employees to work and stay in the organization
(Luthans, and Youssef-Morgan 2017). Talking about the relationship of all the three concepts, it
should be noted that authentic leader is the person who works in the organization to create a
positive environment and build a relationship with the team members of the business. LMX and
PsyCap are two approaches that can help the authentic leader to fulfil their mission in the
business environment. All the three concepts are pitching for the similar objective in the business
environment that is to work on the employees of the company and build a positive relationship
with them so that they can work in better ways. The authentic leader can use Leader member
exchange in developing relationship with the employees of the company and find out ways to
analyse their differential skills and capabilities. With the help of this process, the leader can
identify the employees that the loyal for the company and are willing to work for the company
(Luthans, Youssef, and Avolio 2015). Further, the PsyCap process will help the leader to build a
positive work environment for the employees and recognize them on the basis of their behaviour.
This process can help the authentic leader is developing ways and activities to increase the
ability of the employees. Hope, self-efficacy, optimism and resilience are the four aspects that
help the leader to improve the performance of the employees in a business environment.
Furthermore, when it comes to psychological capital, it should be noted that different individual
require different type of environment to work upon and grow. Leader needs to provide

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environment to the employee on the basis of their personal and professional behaviour as well.
Resulting to which, if the leader will provide similar environment to the professional that they
are providing to the administrative personnel then they will not grow as every individual require
diverse circumstances and psychological capital survive and grow (Valsania, Moriano, and
Molero 2016). Considering the case of professionals present in the business environment, it
should be noted that they require authoritative and responsibility sharing environment where they
can take part in major activities of the business and contribute their opinion as well. However,
talking about the administrative employees of the company, they require respect and advanced
training in the business environment (Leroy, et. al., 2015). The administrative staff of the
company is not considered important and are left out in taking crucial decisions of the company.
Thus, it should be noted that according to psychological capital, it is important for the leader
provide training to the administrative staff of the organization so that they get the sense that they
are also growing in the external environment and people are respecting them as well (Boekhorst
2015). Thus, it should be noted that different psychological capital explains that different people
require different environmental conditions to grow and it is the duty of the leader to provide
them such environment where the employees can grow and sustain in the business environment.
Apart from hope, efficacy, resilience and optimism every individual require different
circumstances and conditions to show their efficiency in the environment. It is the responsibility
of the leader of the company to judge the behaviour of the employees and provide them similar
environment to perform their action in the business environment (Lyubovnikova, et, al., 2017).
Lastly, the fact should be noted that emotions of leader affect the employee’s performance in
both positive as well as negative ways. On one hand, if the leader takes decision considering
their emotional aspect, then it can be said that their emotions might make the decision cloudy.
However, on the other hand, the emotional leadership aspect of the leader can help them in
taking a wise decision on the part of employees (Regan, Laschinger, and Wong 2016). Emotional
leadership refers to the leadership process that makes the leader focus on the behaviour of the
employees along with their productivity. Further, it should be noted that performance is
multidimensional concept; the performance of the employee is based upon several factors apart
from their work efficiency (Hirst, et. al., 2016). The emotions of the employer also reflect on the
performance of the employees in the business environment, for instance if an employee has
failed to attain the trust of the employer in the business environment then the emotions of the

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employer can reflect on the performance of the employee even if he is trying hard to do it. Thus,
it should be noted that in this way the emotions of the leader could reflect on the performance of
the employee negatively. Whereas, talking about the positive impact, it should be noted that
emotional intelligence of the leader could make the employee feel comfortable and secure while
working in the organization. This can significantly increase the performance of the employees in
the business environment (Hsieh, and Wang 2015).
Thus, in the limelight of above mentioned events, the fact should be noted that the paper
elaborated details about the impact of leadership in the business environment. Concepts like
authentic leadership, PsyCap and LMX are illustrated in the paper along with their relationship
with each other as well. The environment plays a lead role in training the employees and
improving their performance as well. Thus, it should be noted that it is important for the leaders
to motivate the employees by changing the environment.

Positive Leader 6
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