Considering the development of a relationship between leaders and subordinates, Yukl , George, and Jones (2010) mentioned the Leader-Member Exchange (LMX) theory, in which trust, loyalty, and respect are only developed after the testing phase. The relationship has gone through the reciprocal testing phase, which begins with an evaluation of each other between leader and subordinates about the motives and aspirations. Leader, at first, should test the willingness of the new subordinates and build confidence by opening some dialogs with subordinates. Getting more feedback from the subordinates will help both in this testing phase.
When trust, loyalty, and respect have developed, relationship has built to a different approach which mutual trust and confidence will take place. The performance of an organization depends on the relationship between leaders and followers. Cited by Uhl-Bien (2003), relationship generates social capital, which transforms human capital into a competitive advantage by facilitating the actions of individuals within large organizational framework (Nahapiet & Ghoshal, 1998). Quality among individuals definitely creates social capital within and beyond an organization. Relational leadership maximizes influence and influence is a power to benefit organization’s performance (Uhl-Bien, 2003).
Building relationship is complicated and not easy. To open an effective dialog, leader needs to understand to fill the gap between communication and intent (Weeks, 2001), create comfortable atmosphere, prepare for stressful conversation, focus on objectives, and know how to deliver the message (Manzoni, 2002). Business is moving toward globalization, dealing with multicultural working environment. Trust and effective communication are required in globalization. Building relationship in a global organization is more challenge because leader deals with diversity in a multicultural environment. Communication will be a biggest challenge for leader who is not preparing for stressful conversation (Weeks, 2001).
Using the LMX theory to build relational leadership, therefore, helps even when dealing with small, large, or international organization.
Manzoni, J. (2002). A better way to deliver bad news. Harvard Business Review, 80(9), 114–119.
Uhl-Bien, M. (2003). Relationship development as a key ingredient to leadership development. In S. Murphy & R. Riggio (Eds.), The future of leadership development (pp.129–147). Mahwah, NJ: Erlbaum.
Weeks, H. (2001). Taking the stress out of stressful conversations. Harvard Business Review, 79(7), 112–119.
Yukl, G., George, J. M., & Jones, G. R. (2009). Leadership: Building sustainable organizations (Laureate Education, Inc., custom ed.) New York: Custom Publishing