Leadership & Ethics for Managers Unit 3 IP Research Paper

Leadership & Ethics for Managers Unit 3 IP - Research Paper Example The leader member exchange theory refers to the relationship built due to time pressure by leaders with the small group of followers. These members make in-group are highly trusted, get high privileges and have unbalanced attention of leader as compare to others that fall into out-group category. Relations of out group followers are formal with the leader and based on formal interaction; out-group members do not gain the reward that are controlled by the leader and have a smaller amount of leader’s time. In history when the relationship between leaders and provided followers begun leader categorized their followers into two groups â€Å"in group† and â€Å"out group† and stability seen in such relationships over time. Leader Member exchange model has been introduced in order to reward in-group employees that are most trusted and close to the leader and punish those who fall in out-group and not close to the leader (Liden, Wayne, & Stilwell, 1993; Wayne, Shore, Bo mmer, & Tetrick, 2002). It has been encountered that there is no such procedure through which leaders chose their in-group member, but they choose on the basis of similarities in characteristics of personality, attitude and demographic or it can be said that on a higher level of competence (Duchon, Green, and Taber, 1986). It has been found that leaders have differential attitudes among followers and members fall into in-group do the hard work, have a rating in higher performers, describe high level of satisfaction with their leaders and engage in citizenship behavior at work (Gerstner, & Day, 1997). Workers that are included in the in-group are more engaged, reliable, trustworthy and hardworking as compare to out-group members. In-group and out-group differences bring favoritism and create dissatisfaction among the members of out group. It has been found that favoritism has a damaging impact and costly