Leader-member exchange (LMX) theory is rooted in the idea that leaders and followers exchange benefits, and that their relationships are at the heart of the leadership process. Social scientists have long attempted to understand how people relate to each other, beginning with explorations of costs and rewards, interpersonal behavior, and human relationship. A number of theories have used the lens of interpersonal relationships to understand leadership, including Edwin Hollander's focus on idiosyncrasy credits, Tom Tuyler's notion of procedural justice, Dave Messick's delineation of psychological exchanges, and James MacGregor Burns's conceptualization of transforming and transactional leadership. Most notably, George Graen and his colleagues constructed the formal leader-member exchange theory, which began by elaborating on the nature of the leader-follower relationship and its outcomes, and later created a model for effective leadership. This entry traces the background of these ideas and discusses the Graen theory in some detail.

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Copyright © 2009 SAGE Publications, Inc. This book chapter first appeared in Encyclopedia of Group Processes and Intergroup Relations.

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