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    Question

    According to the LMX Theory, leaders often divide their

    subordinates into an In-Group and an Out-Group. Which of the following best describes the In-Group experience?
    A Members experience more autonomy in running the internal affairs of the company but are not given any responsibilities requiring interaction with the external environment Correct Answer Incorrect Answer
    B Members are managed strictly via the formal employment contract and job descriptions and are referred to company’s internal code of conduct for any clarification Correct Answer Incorrect Answer
    C Members have higher levels of trust, more autonomy, and perform tasks beyond their job description. Correct Answer Incorrect Answer
    D Members are chosen solely based on seniority and years of service and achieving of targets Correct Answer Incorrect Answer
    E Members receive more formal authority but have less direct contact with the leader to ensure quick decision making at leader’s end Correct Answer Incorrect Answer

    Solution

    LMX theory focuses on the dyadic relationship between the leader and each individual. The individuals in the In-Group enjoy high-quality exchanges with the leader. Their experience is defined by mutual trust, respect, and obligation. Because of this strong bond, they are often granted more autonomy, receive extra resources/information, and frequently take on extra-role responsibilities that go beyond their formal job descriptions.    While the Out-Group has a purely transactional relationship based on the formal contract.   Note – LMX theory explains that leader-follower relationships (in-groups vs. out-groups) form through three stages: o   Role-Taking (Initial Assessment): Occurs when a new member joins the team. The leader evaluates the employee's skills, abilities, and work ethic. This stage is characterized by formal, initial interactions where the leader determines the employee's potential. o   Role-Making (Trust Building): The employee begins working on tasks. Through these interactions, the leader and member negotiate the employee's role, building trust and commitment. During this phase, the employee is often subconsciously categorized into either the "in-group" (high trust, more responsibility) or the "out-group" (lower trust, task-oriented). o   Role-Routinization (Stabilization): The relationship stabilizes into a predictable pattern of behavior

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