Describe leader-member exchange (LMX) theory and discuss the role that social exchange theory plays ...

LMX theory is a theory of leadership that focuses on the quality of the relationship that develops between a leader and an employee. It is a social exchange relationship-based approach to leadership. Social exchange theory is the basis for the effects of LMX. According to social exchange theory, individuals who are treated favourably by others feel obliged to reciprocate by responding positively and returning that favourable treatment in some manner. Thus, employees who are in a high-quality relationship with their supervisor will reciprocate with extra effort and higher commitment and performance.