A Purposeful Approach to LMX Differentiation: The Role of LMX With Key Members

Abstract

A central idea in the leader-member exchange (LMX) literature is that leaders, due to the limited organizational and personal resources available to them, often struggle with developing and maintaining high-quality exchange relationships with all of their members. As a natural consequence, leaders typically form high-quality relationships with a select few members—often those who seem likable or are similar to the leader—while maintaining formal and distant relationships (i.e., low-quality LMX) with others. This form of differentiated treatment of members creates tensions in team dynamics. In this paper, we propose that leaders can mitigate the downsides of leader-member exchange differentiation (LMXD) for team dynamics by being more purposeful and strategic in how they differentiate in their treatment of members. Specifically, we posit that when leaders strategically develop high-quality LMX relationships with key members—individuals occupying influential positions in team social networks—such key members will engage in behaviors that buffer the negative impact of LMXD on team dynamics. Our framework integrates LMX theory with perspectives from social networks research to illustrate how strategic differentiation influences task and relational team dynamics. Finally, we discuss recommendations for empirically testing, theoretical extensions, and practical implications of this framework.