Dear Management Scholars,
Organizational behavior is possibly due to two processes – Bureaucracy and Charisma, according to Max Webber, a 19th century sociologist. Today we measure them by observing the behavior of managers in interaction with their direct reports. In the beginning of modern leadership research, many different reliable measures were invented and failed. In the 1950s, the two complementary measures of consideration (C) of team members needs and improving the structure (S) by increased transparency of responsibilities and rules. These two measures of leader and member interpersonal exchanges were averaged for all team member in a team and become average leadership style for the team. These measures failed until LMX research found that changing C and S from team average to unique leader and member dyads within teams worked in meta-analyses and recently in a meta-analysis of 35 meta-analyses using structural equation modeling (Gottfredson, & Aguinis, 2016). This investigation containing 3,327 studies and 930,349 observations concluded the following structural equation model was the best explanation of the real world: Leader and potential partners carry out extended interpersonal negotiations more specific than their employment contracts. During this negotiation of "honor" agreement within the LMX dyad, the two parties agree to operate as "partners" in terms of the balance between the team and private life. The quality of this agreement was measured successfully by LMX-7 with highest scores indicating a "partner" agreement and lower scores suggesting no additional agreement beyond the employment contract "associate". Once the dyadic agreement was tested by both parties, promised leadership incentive, such as, consideration and structuring (C&S) contingent rewards (CR) and transformational leadership (TFL) would be followed by expected performance. By improving LMX-Interpersonal contract for one professional in sales by one standard unit and using the incentive named the results shown are amazing. Moreover, these figures may be multiplied by the number of sales/people. This was a quantum leap forward and a great holiday present. We now have a factual basis for charisma via LMX theory.
Gottfredson, R. K., & Aguinis, H. (2016). Leadership behaviors and follower performance: Deductive and inductive examination of theoretical rationales and underlying mechanisms. Journal of Organizational Behavior. Wiley Online Library. www.wileyonlinelibrary.com. DOI: 10.11002/job.2152.
Cheers,
George Graen