Contemporary leadership theories

Question 1

Define Leader-Member exchange theory (LMX)

Answer 1

• Leaders and followers have unique one-on-one relationships (some of better or worse quality)
• Leaders have a special relationship with a small group of employees -> ingroup. The rest of the followers -> outgroup

Question 2

Define Charismatic leadership

Answer 2

• There is just something about certain leaders that cause people to be drawn towards them
• Leaders inspire followers through words, ideas, and behaviour

Question 3

Define transformational leadership

Answer 3

• inspire others to perform: by transcending followers’ self-interests for the good of the organization.
• Widely studied and shown to be effective, because it:
   Promotes positive employee moods
   Motivates employees, instilling confidence and engagement
   Leads employees to personally identify with the leader, her/his values and identity
   Improves the quality of LMX
   Improves fairness perception and trust

Question 4

Define Transactional leadership

Answer 4

• Leaders clarify roles and tasks, and allocate rewards or punishment when needed
• They are not opposing approaches, but they complement each other.
• Transformational leadership is valuable for group performance, OCBs, satisfaction with the leader and safety behaviours in organizations
• Transactional leadership is important for leader effectiveness, follower performance, and follower job satisfaction
• A clear division between the two may be difficult to see in practice.