The use of the LMX model, in conjunction with other leadership theories, allows finding new ways of effective management. The theoretical basis for the LMX model is of interest since the model has good potential for further integration into leadership theories focused on the high-quality relationships between leaders and followers. In particular, according to research, the LMX model is successfully applied by servant, ethical, and transformational leaders. This paper aims to present how well scientists have studied the LMX model, analyze its interaction with leadership theories, and provide examples of how the model is applied in a real work environment at Google.
The LMX model is actively discussed by scientists, both in the adaptation by other theories and in particular. Besides, discussions continue about the effectiveness of the model and its impact on professional outcomes. However, the peculiarities of adapting the model to other theories still have not been discussed in detail. Nonetheless, the existence of such an application is widely recognized. The following is a literature review, with articles first considering the LMX model and then papers exploring the compatibility of LMX with other theories.
Scientists Reb et al. (2019) draw attention to the importance of leader awareness in building relationships with followers within the LMX model. Specifically, scholars find that a leader’s consciousness leads to better employee performance and may impact reducing employee stress levels. Scientists also believe that applying the LMX model can be associated with organizational justice, business ethics, and practical implications. Then, Carnevale et al. (2019) discuss the moderating effect of the LMX model on how a leader’s humility motivates employees to demonstrate helpful behavior by developing a sense of shared identity. Thompson et al. (2018) found that the LMX model can be a potential antecedent to the leader’s incivility. Scientists believe that out-group members are more exposed to the negative impact of the leader’s incivility. Scholars also admit that employees who were exposed to an unfair uncivil attitude respond with a negative emotional effect that can escalate to social loafing. It is also noted that with low-quality LMX relationships, followers will limit their effort.
On the opposite, Cooper et al. (2018) discuss high-quality LMX relationships and highlight the importance of humor and encouraging leadership behavior as one way to improve civic organizational behavior. Scientists also note that humor is a key interpersonal resource for a leader since positive emotions evoked by the leader, and subsequent social exchanges contribute to developing high-quality LMX relationships. Then, Lai et al. (2019) examined how a leader’s relationship with management affects LMX relationships with followers. The researchers concluded that the quality of a leader’s relationship with management influences team members’ voices and creativity.
Further, Kauppila (2016) studied the impact of in-group or out-group LMX status on work outcomes and found a more positive effect of LMX differentiation on work outcomes for employees with lower rather than higher LMX. According to the scientist’s observations, negative self-esteem with a low LMX status is more evident when top managers decentralize responsibilities to lower hierarchical levels and less pronounced when a leader imposes a shared vision to guide the organization. It should be noted that observation data can be instrumental when accompanying the transition of employees from out-groups to in-groups.
Then, Lee et al. (2019) note that there is ambivalence in LMX interactions. In particular, scientists have found that LMX can be assessed as having low or high-quality and as ambivalent or characterized by both low and high-quality characteristics at the same time. Further, the scholars concluded that LMX ambivalence negatively affects performance, no matter which elements prevail. At the same time, support from colleagues or the organization neutralizes the negative effect of ambivalence. Besides, higher LMX ambivalence results in a more negative impact and reduced performance.
Several studies have also looked at the interaction of LMX with leadership theories. Newman et al. (2017) note the importance of LMX’s moderating influence on servant leadership. In particular, LMX is a catalyst for the manifestation of active personality qualities among employees. Further, Dhar (2016) notes that ethical leadership drives innovative service-sector employee behavior when managers interact with employees through LMX and promote work autonomy. The study also notes that employee autonomy was a critical factor in measuring creative behavior. Besides, Niu et al. (2018) found that LMX relationships positively influence the relationships between authentic leadership and employee identification, while organizational identification positively impacts employees’ innovative behavior.
Further, Nandedkar and Brown (2018) explored the relationship between transformational leadership and LMX. In particular, it was noted that the transformational leader’s qualities, such as idealized influence, inspirational motivation, individualized consideration, and intellectual stimulation, may serve as a good precursor for high-quality LMX. In particular, transformational leaders inspire followers to build high-quality LMX relationships with them as they articulate an appealing vision, inspire followers, and provide individualized support. Scientists also found a positive relationship between transformational leadership and distributional justice and between LMX and distributional justice.
Then, Dhammika (2016) states that visionary leadership is positively associated with organizational and employee outcomes. The scientist also notes that LMX has a significant positive impact on organizational commitment resulting from effective visionary leadership. The direct influence of visional leadership is more critical for the emergence of various commitment options than the moderating role of LMX. Besides, the scientist notes that multiple factors associated with leaders and members can change the LMX influencing pattern by reinforcing or attenuating the influence flaws. The scholar concludes that leaders should be trained in visionary leadership behavior since such leadership improves organizational and employee outcomes. The scientist also says that managers should engage in social exchange relations and keep warm, friendly, trusted, and ethical relationships with their subordinates to increase organizational commitment.
Therefore, the LMX model is a useful tool for improving employee and organizational outcomes. The greatest strength of the LMX model is its applicability to leadership theories as a moderating agent. Given that, in practice, managers of organizations tend to implement various leadership approaches, sometimes using mixed techniques, the LMX model can become a unifying link that will improve the results and effectiveness of each of the leadership styles. LMX is an essential condition for the effectiveness of servant, ethical, visional, transformational, and authentic leadership. Therefore, leaders who prefer these styles should consider the need for rational use of LMX.
For example, in conjunction with the transformational leadership approach, LMX reinforces the importance of dyadic personal interaction between leaders and members. However, as Kauppila (2016) pointed out, LMX relationships can negatively impact out-group members, which becomes less pronounced when the leader imposes a shared vision to guide the organization. Besides, to create more effective relationships within the LMX model, leaders need to develop positive qualities – such as awareness, humility, and humor. Leaders should also strive to avoid ambivalence and incivility with followers since this negatively affects employees’ work outcomes. An equally significant detail that affects the quality of LMX is a high or low quality of the leader’s relationship with their employees.
Most leadership theories imply a particular leadership style or behavior that motivates employees to work harder. For example, transformational leaders use individualized consideration and intellectual stimulation, while authentic leaders try to inspire employees with ethical behavior and loyalty to their principles. However, the LMX approach is also an interaction model based on vertical dyads between leader and follower. Therefore, it is possible that applying dyadic relationships in other leadership styles would have an even more substantial positive effect since the LMX model is based on social exchange theory and emphasizes the importance of a trusting relationship between a leader and followers.
The LMX model is sometimes criticized because there are no clearly defined interaction techniques within this model, and there are no guidelines for increasing the number of in-group members. Based on the research presented above, these shortcomings can be corrected. For example, it can be assumed that more conscious, humble, and rational leaders will have more high-quality LMX relationships. Therefore, out-group members may have relationships of higher quality with better leaders. The more correct a leader is to implement his chosen leadership style, the more employees will want to join in-group. Finally, balance and distributive justice must be observed concerning in-group and out-group members to avoid personal preferences and create equal opportunities.
It is also likely that the LMX model deserves criticism because neutrality towards out-group members can negatively affect their careers as a result. For example, at Google, whose founders Larry Page and Sergey Green have always strived to maintain high-level personal interactions, it is believed that the lack of feedback on employee performance negatively affects their professional development. In particular, ten core leadership qualities are valued by the company. According to Google, a good leader is a good coach, who empowers the team without micro-management, creates an inclusive team environment, is productive and results-oriented, is a good communicator, supports career growth, and discusses results. Therefore, a good leader will gradually expand their influence over the entire team when applying the LMX model.
Notably, Larry Page and Sergey Green, who started the business in the garage of their friend Susan Wojcicki, CEO of YouTube, have built a relationship between leaders and team members in the company based on mutual respect, trust, and engagement. Google’s core values are expressed in a concise formulation – “Don’t be evil.” This approach is a fundamental ethical prerequisite and guides for recruiting new leaders and hiring front-line employees. Larry Page and Sergey Green are also committed to the principles of diversity, equity, and inclusion. It was reflected in the composition of Google’s CEO and key executive team, which included people with a wide variety of backgrounds, but united by a commitment to Google’s ethical principles. Consequently, ethical behavior should become a sound basis for implementing leadership models and developing relationships within the leader-member dyads.
High-quality management allows the company to be the first in many respects. When hiring managers, Google gives them 1-3 months to get comfortable with the new role and then provides training. According to Larry Page and Sergey Green, the ability to listen and be a good communicator is essential for a new manager, as it allows them to get to know the team and find effective ways to lead. Interestingly, to determine the preferred leadership style, Google has developed a questionnaire for managers, which is completed by subordinates. Through this questionnaire, employees can indicate their preferred type of leadership and participation in the work – structured management, autonomy, team participation, or independent work. This approach seems quite logical, as it allows choosing the most effective management style and reduces the likelihood of error. Therefore, Google uses LMX since the company strongly encourages the manager’s motivating participation in the work of employees and the utmost attention to them.
Besides, effective communication in Google means that leaders do not distance themselves from managers, but rather support them, which positively affects the quality of work. In the context of the LMX, this is especially important because managers’ relationship with their leaders has a direct connection with employee performance. In particular, Google leaders learn to have a long-term perspective to integrate the work of different departments and a lot of intellectual discussions with subordinates to inspire them to accomplish impossible tasks. In this way, the leaders of Google united LMX and transformational leadership. It can also be assumed that the founders of the company Larry Page and Sergey Green, are authentic and visional leaders who help create a vision of the company’s capabilities.
It is noteworthy that Google is continually expanding, and therefore often needs new leaders. That is why the company pays special attention to this topic. Besides, through constant training of managers, they learn to see their flaws and grow as leaders. It is the basis for successful interaction between all departments, leaders, and employees of the company. Moreover, effective structural management, with the hierarchical top of authentic leaders Larry Page and Sergey Green, creates a sense of team integrity, despite its enormous size. Therefore, Google builds its stereotypes and leadership rules, which can be expressed within applying a combination of existing leadership theories.
Therefore, the use of authentic and transformational leadership styles by Larry Page and Sergey Green and moderating LMX techniques has led to overwhelming success for the company. In particular, despite the massive number of people and the company philias in half of the world’s countries, Google remains a single whole. Authentic leadership of the company’s founders is the ‘glue’ that holds everything together, and the transactional and visional leadership, which is implemented at the subsequent levels of the hierarchy, allows the company to continually stay in a dynamic condition, set ambitious goals, and fulfill them.
Although the company is a programming organization, leaders Larry Page and Sergey Green have succeeded in complementing the company’s mechanics – high-quality technicians – with a multitude of ethical managers. In this way, the company’s founders spread their vision and their authentic approach, creating a company that offers the world artificial intelligence with a human face. The use of LMX is only one of the joints in Google’s work and is mainly used in the form of the leader-employee dyads.
Even though Google allows its employees to choose their preferred type of management and work independently, managers do not leave out-group members and participate in all employees’ professional lives. However, the earlier invention of the LMX theory defined and consolidated the opportunity for a choice – to participate or not to participate in teamwork for the company’s good. As a result, managers can choose between neutral and positive attitudes towards employees in companies like Google. The emergence and consolidation of the LMX model became a milestone when the hierarchical forcible involvement of employees in work became scientifically obsolete. Simultaneously, it cannot be said that Google embodies effective leadership based on the use of the LMX model. Instead, they overfulfill the task and try to make all employees in-group members, using unique management techniques and approaches developed by the company.
Google cannot be an example for all managers, since their management models have primarily emerged from their corporate ethics and are driven by business specifics and global goals. However, some practices, such as leadership training, can be borrowed by other companies. Leadership training practice can also be applied to leaders who work using the LMX leadership model. It is likely that leadership training, which includes the subsequent assessment of management and leadership qualities, will help create the most comfortable working conditions for all employees while ensuring high productivity.
Besides, concerning the theoretical conclusions presented above, they can also be useful for various managers and leaders. In particular, it is vital to indicate the need to avoid ambivalence when implementing the LMX leadership model, particularly the manifestation of negative leadership qualities and unfair treatment of employees. On the contrary, managers must develop such qualities as awareness, humility, humor, so that their relationships with subordinates can be as successful as possible. It is also essential to observe that LMX can be used as a moderating factor in implementing any modern leadership theories. Consequently, managers can use this model in their work since closer interaction with employees leads to increased job satisfaction, productivity, and organizational commitment. It is noteworthy that when analyzing LMX as a moderating factor, most scholars imply that LMX is a relationship based on mutual trust, respect, and interest. Therefore, LMX is used as a synonym for trustworthy and friendly professional relationships.
Further, the positive impact of using the LMX on performance metrics should be emphasized. In particular, research has provided evidence of the positive effects of high-quality LMX on organizational commitment, employee and organizational outcomes, employee innovation, stress reduction, and a positive correlation with distributional justice and business ethics. Besides, there are particular implications for the top managers. Notably, top managers need to consider that using the LMX model can often be a prerequisite for a hidden manifestation of incivility, leading to negative employee response and a sharp drop in productivity.
Besides, managers need to be supported and encouraged by the top managers not to exhibit ambivalent behavior since leaders’ ambivalence in implementing the LMX model has serious negative consequences for productivity and job satisfaction. Finally, top executives need to take an example from Google’s management strategy and create a long-term perspective coupled with a considerate attitude towards managers and employees. In addition, the quality of the relationship between managers and their leaders strongly influences employees’ work outcomes.
Thus, the LMX leadership model was presented through the literature review, and its interaction with leadership theories was analyzed. There were also examples of applying the model in the working environment of Google. As a result of the analysis, it was found that the LMX model is most effectively used when managers develop the right leadership qualities, such as awareness, modesty, and humor. The threat of an ambivalent or uncivil relationship between leaders and followers has also been described using the LMX model. Top managers were encouraged to pay attention to training managers to develop the required qualities and effectively implement team management. It was also noted that an attentive attitude would protect the company from threats posed by poor communication between managers and their leaders. Research by scientists has also confirmed that the LMX model works well with other leadership theories such as servant, ethical, authentic, visional, and transformational leadership theories. The most commonly mentioned moderating nature of LMX is creating a relationship between leaders and followers based on mutual respect, trust, and interest. Besides, some other recommendations were given regarding how the LMX model can be used by managers and top managers based on Google Inc.’s example.
Carnevale, J. B., Huang, L., & Paterson, T. (2019). LMX-differentiation strengthens the prosocial consequences of leader humility: An identification and social exchange perspective. Journal of Business Research, 96(1), 287-296.
Cooper, C. D., Kong, D. T., & Crossley, C. D. (2018). Leader humor as an interpersonal resource: Integrating three theoretical perspectives. Academy of Management Journal, 61(2), 769-796.
Dhammika, K. A. S. (2016). Visionary leadership and organizational commitment: The mediating effect of leader-member exchange (LMX). Wayamba Journal of Management, 4(1), 1-10.
Dhar, R. L. (2016). Ethical leadership and its impact on service innovative behavior: The role of LMX and job autonomy. Tourism Management, 57, 139-148.
Kauppila, O. P. (2016). When and how does LMX differentiation influence followers’ work outcomes? The interactive roles of one’s LMX status and organizational context. Personnel Psychology, 69(2), 357-393.
Lai, F. Y., Lu, S. C., Lin, C. C., & Lee, Y. C. (2019). The relationship between leader-member exchange and employees’ proactive behaviors. Journal of Personnel Psychology, 18(1), 106-111.
Lee, A., Thomas, G., Martin, R., & Guillaume, Y. (2019). Leader-member exchange (LMX) ambivalence and task performance: The cross-domain buffering role of social support. Journal of Management, 45(5), 1927-1957.
Nandedkar, A., & Brown, R. S. (2018). Transformational leadership and positive work outcomes. International Journal of Organization Theory and Behavior, 21(4), 315-327.
Newman, A., Schwarz, G., Cooper, B., & Sendjaya, S. (2017). How servant leadership influences organizational citizenship behavior: The roles of LMX, empowerment, and proactive personality. Journal of Business Ethics, 145(1), 49-62.
Niu, W., Yuan, Q., Qian, S., & Liu, Z. (2018). Authentic leadership and employee job behaviors: The mediating role of relational and organizational identification and the moderating role of LMX. Current Psychology, 37(4), 982-994.
Reb, J., Chaturvedi, S., Narayanan, J., & Kudesia, R. S. (2019). Leader mindfulness and employee performance: a sequential mediation model of LMX quality, interpersonal justice, and employee stress. Journal of Business Ethics, 160(3), 745-763.
Thompson, G., Buch, R., & Glasø, L. (2018). Low-quality LMX relationships, leader incivility, and follower responses. Journal of General Management, 44(1), 17-26.