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The following article was written by Coleman Patterson and appeared in the Business section of the Abilene Reporter-News.

Being 'in' with boss pays off with recognition, responsibilities, May 27, 2007, 2D.

Many of the theories that management researchers, consultants, and practitioners study are done so with the hopes of applying them in the workplace.  Theories are explanations for how things work.  They are developed and refined through research and the scientific method.

When absenteeism increases or employee performance drops, it is important that managers know how to make corrective actions.  The interrelationship among the variables in a theory permits inferences about ways to bring about desired outcomes.  Because they are often developed and used to solve actual problems, many organizational theories are “prescriptive” in nature.

Other types of theories are “descriptive.”  Descriptive theories describe the phenomenon of interest.  Understanding the ways that things work can help decision makers forecast and predict events in the future.  One popular descriptive organizational and management theory is Vertical Dyad Linkage Theory (VDL) or Leader-Member Exchange Theory (LMX) by George Graen and his associates.

This theory was developed while studying worker ratings of superiors.  The traditional method of evaluating supervisors had been to have workers rate them individually and take the average rating as the assessment for the superior.  Graen’s team found a flaw with that traditional system.  A supervisor who receives mediocre ratings from all of his or her workers will appear equal to a superior who receives outstanding ratings from half of his or her workers and horrible ratings from the other half.  Clearly, however, those two situations are very different.

Out of the study of disparate supervisor ratings from different groups of workers was born VDL—which later became LMX.  This theory states that leaders in organizations tend to form special relationships with some followers and non-special or ordinary relationships with others.  These relationships form quickly, perhaps over no more than several months, and are relatively stable.  “In-group” members are those who receive special attention.  They are typically given more responsibilities, placed into situations where they can prove themselves and make important connections, and are first to be offered special opportunities or resources.

Workers who are not in the in-group are known as out-group members—or “hired hands.”  They exist within the organization to do their jobs and are given relatively low levels of choice or influence.  Their supervisors do not necessarily dislike out-groupers, they simply do not have the special relationships with superiors that in-groupers do.  When special opportunities become available, out-groupers tend to be overlooked.

LMX concepts become most interesting in the midst of organizational change.  When executives retire or are terminated, when companies merge or have layers of management eliminated, or when internal versus external candidates are promoted and hired for management jobs, the resulting LMX concepts can change the cultures and tones of organizations.  LMX concepts are also very relevant to the area of career development.  Being an in-grouper to in-groupers all the way to the top of the organization puts one in an advantageous position within an organization.  In an opposite manner, being an out-grouper in a line of out-groupers does not bode well for long-term career advancement.

Further research on LMX and leadership style has noted that effective leaders are those who make all workers feel like in-groupers…but that is another story.

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