This chapter aims to provide a review of three main elements in order to conduct this research; leader-member-exchange (LMX), intrinsic motivation, and employee creativity. The researcher reviewed the general concepts, theories, and details of those variables that support the hypothesis in this study.
Leader-Member Exchange
Since LMX model has emerged and became the main concept in an organization. LMX refers to when leaders and followers have developed their relationships which bring many benefits to each other (Graen & Uhl-Bien, 1991). Moreover, LMX theory mentioned that leaders and subordinates will exchange the reciprocal with trust, obligations, and respect (Graen & Uhl-Bien, 1995).
The concept of LMX theory is generated within workgroups and it occurs with differing types of exchange patterns also different quality relationships from low to high between leaders and subordinates (Henderson, Liden, Glibkowski, & Chaudhry, 2009). In addition, LMX theory and many studies (Gerstner & Day, 1997; Graen & Uhl-Bien, 1995; Janssen & Van Yperen, 2004) explain that the degree of relationship between leaders and subordinates quite specific because it emphasizes the dyadic exchange relationships in terms of organizational aspect.
According to Xu, Loi, and Lam (2015), they defined LMX as a relationship between supervisors and each of their subordinate. Moreover, it focuses on supervisors’ aspect by which the supervisors’ concern high-LMX members as a trusted person and they tend to be the guidance for them; also giving more information or resources to them.
On the organizational aspect, LMX in this research refers to the process that leaders and subordinates built the relationship with different types and quality of exchange patterns which usually predict positive or negative potential differences in the workplace (Gerstner & Day, 1997).
Moreover, the researcher is required to clarify the understanding of the relationship structure at work. According to Erdogan and Bauer (2014), they summarized the lexicon for dyadic relationships at work. Figure 1 illustrated a variety of relationships at work and summarizes these kinds of relationships.
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Figure 2.1. Relationship at work: Summarizing the nomenclature for peer, upward, and downward dyadic relationships. Retrieved from Erdogan, B., & Bauer, T. N., 2014. Leader-member exchange (LMX) theory: The relational approach to leadership. In D. Day (Eds.), The Oxford handbook of leadership (pp. 407– 433). New York, NY: Oxford University Press.
Since relationships at work are concerned as an important element in an organization.
These kinds of relationships can be divided into four types (see figure 2.1.); Leader exchange (LLX) refers to the relationship exchanges between leaders and leaders; Leader-member exchange (LMX) refers to the relationship exchanges between leaders and subordinates; Supervisor leader-member exchange (SLMX) refers to the relationship exchanges between leaders and focal members which focusing on leaders’ perspective; and Coworker exchange (CWX) refers to the relationship exchanges between subordinates and subordinates.
In this research, LMX is the degree of relationships between leader and followers in an organization which can be measured from leaders’ perspective or followers’ perspective. However, Hiller, DeChurch, Murase, and Doty (2011) claimed that 83 percent of the studies, the LMX model was measured by followers’ perspective. Thus, this research conducts the data from followers’
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perspective and focuses on LMX line because it correctly represents the meaning of LMX model and the sampling in this study.
The Development of Leader-Member Exchange in an Organization
Over the past few decades, LMX’s researches (Cropanzano, Dasborough, & Weiss, 2017) have occurred during the era of organizational leadership. The most successful of LMX is contributing to the importance of the relationship between leaders and followers also the outcomes of itself. According to Graen and Uhl-Bien (1995), they have developed The ‘LMX-7’ questions for investigating the LMX outcomes and foundations of LMX model; so the LMX-7 items refers to a variety of aspects of the relationship between the leaders and the followers, including effectiveness, perception of relationship, requirement, recognition of performance, and voluntariness to support others. Moreover, Graen and Uhl-Bien (1995) documented that there are four stages of the development of LMX model. So, it is important to clarify how this progression has developed, each of the stage is described below.
Stage 1: discovery of differentiated dyads.
Since Vertical Dyad Linkage (VDL) (Dansereau, Graen, & Haga, 1975) has originated in 1975, it found the relationship between leaders and subordinates can divide into two characteristics;
the first one is out-group and the second is in-group. The out-group style refers to a low-quality exchange relationship between leaders and followers. The leaders consider their subordinates as an ineffective person with low trust, respect, and obligation and the relationship is based on an employment contract. In contrast, the in-group style refers to a high-quality LMX relationship.
The leaders consider their subordinates as an effective person with a high degree of trust, respect, and obligation. Moreover, leaders may offer mentoring, task and extra-role behavior. Also, the relationship is based on trust and integrity.
Therefore, this stage emphasizes leader behavior with the question that which degree of the quality exchanges that leader could develop and maintain because in this stage the leaders are required to develop the relationship to benefit the functioning of the work unit. However, the VDL model became the one domain for analysis and it began to develop in terms of the relationship area in an organization.
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Stage 2: focus on the relationship and its outcomes.
In this stage, the evolution of LMX from VDL has already emerged (Graen, Novak, &
Sommerkamp, 1982). The finding in this stage was divided into two section; firstly, the relationship between leaders and followers were affected by those characteristics from stage one including the leader and follower behaviors. In addition, the role-making is also related to LMX relationship. The role-making process refers to the member within the group to create their own role in order to develop a relationship with their co-workers or leaders by consideration as trust, respect, and obligation (Dansereau et al., 1975). Secondly, the high quality of the LMX relationship is positively related to the leaders and followers outcomes; also it can benefit task and organization. Obviously, the evolution of LMX from VDL is changing beyond the two characteristics that mentioned above because LMX model explicates the process of the relationship development and the consequences of this relationship in an organizational factor.
Accordingly, the finding of this stage concluded that the effective leader process starting when leaders and subordinates can create and maintain a high quality of social exchange relationship.
Stage 3: description of dyadic partnership building.
According to stage two, LMX’s concept already moving beyond relationship within groups and out-groups as VDL model mentioned. In this stage, the LMX theory is shifted from traditional thinking to modern thinking in terms of a superior-subordinate relationship. It follows that the leaders not only be a boss but also be a partnership and must provide all materials, resources, and helps to all employees; also building the relationship as a partnership to each subordinate. Thus, this kind of approach is called Leadership Making model.
As a result of leadership making model, it can affect the phenomenon within the organizations; firstly, Scandura and Lankau (1996) claimed that if the organization uses Leadership Marking approach to develop LMX process, the subordinates may perceive more impartial and satisfied. Especially, the subordinates who are dislike or unsatisfied with the partiality issue. Secondly, when the leaders have a relationship with their subordinates as a partnership which represents the high-quality relationship, it would reach the high potential of leader-subordinate and increase an organization's competitive advantage or capability. Thus, this third stage is developed by the modern process of leadership which more useful and effective. For more details about Leadership Making in this stage is described below.
13 A life cycle of leadership making
Since The Leadership Making model was created by Graen and Uhl-Bien (1995) to determine the significance of high-quality relationship in the organizational phenomenon and also to explain a procedure and technique for how to apply these in practice; it divided into three sections.
The first section, it calls “stranger” aspect that refers to the individuals have to work together in the same independent environment within an organization, but the relations between them based on formal employment contract; it can be featured as an economic exchange. This kind of relationship, the leaders limit communication, material, and information to the subordinates, only open within the work context. Moreover, the subordinates only interact with their leaders when the prescribed occupation required. Thus, this section has been described within the LMX theory as a lower-quality relationship (Graen, 1969)
The second section, it is represented as an “acquaintance” aspect that related to social exchange for developing and improving the relationship in the organizational roles. For this step, the members already increased the relationship and started to share their information or resources in terms of personal and work context, but this relationship is still restricted in some part by their personal condition.
The final section, it the peak of the relationship within the workplace which is illustrated as a “mature partnership”. At this point, the relationship of the members is concerned as a high- quality relationship and it is seen as a long-term relationship, in which the individuals can support each other. Furthermore, this relationship is not only concerned about behavioral but also respect, trust, and obligation in every part of the interactional process. So, LMX in this section is absolutely representing the high-quality relationship. For instance, the leaders may delegate all powers to their subordinates when the leaders are not available for working and they ask subordinates for more extra task or help without extra pay in return. In the same way, the subordinates may rely on their leaders for promotion, support, and resources.
In brief, these three sections are obviously beneficial for employees, managers, and organizations. At this point, the core concept of this approach is the way that the leaders should encourage their subordinates and make the proposition to increase high-quality relationship, also be the partnership for them. All of these factors are increasingly equitable and potential within the LMX process.
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Stage 4: expansion of dyadic partnership to group and network levels
At this point, the development of LMX has come so far. LMX has been focused on a dyadic relationship in terms of a workgroup and independent roles. Nevertheless, the nature of leadership is not specified within any situations. Thus, Graen and Scandura (1987) suggested that LMX should be linked as a partnership with a group and network levels.
Therefore, this final stage is concerned as a systems-level perspective and it became the critical domain for developing the question of how LMX differentiation systematizes together to form greater systems of network assemblies in an organization. Moreover, in this stage, it already found that LMX can be both transactional and transformational; as mentioned in the Leadership Making model that there is three section to explain how LMX relationship was developed by members in an organization. Transactional leadership refers to when individuals who are in the
“stranger” and “acquaintance” steps which have self-interest to a larger interest. On the other hand, transformational leadership refers to the individuals who are shifting into “mature partnership”
which represented the high- quality relationship and has a long-term relationship (Graen & Uhl-Bien, 1995).
Since LMX has developed by Graen and Uhl-Bien (1995). Liden and Maslyn (1998) found that LMX theory actually has a multidimensional construct to exchange with their subordinates.
For example, leaders are using several patterns to develop a relationship or exchange with their subordinates (Dansereau et al., 1975; Graen & Cashman, 1975; Liden & Graen, 1980). Thus, Liden and Maslyn realized that it is important to clarify the dimension of LMX including contribution, loyalty, professional respect, and affect, each of the dimension is described below:
According to Dienesch and Liden (1986), they provided the definition of a "contribution"
in the multidimensional construct of LMX that refers to the understanding of quantity, direction, quality, and also activities that related to jobs where the leaders and subordinates are involved for going to the goals which they both establish. However, this dimension is focusing on the task-related behaviors of members. For example, when the leaders assign the tasks to the subordinates and these subordinates can impress their leader the most, so they will be obtained resources, materials, and support that increase job performance. Moreover, members who have high-quality LMX exchanges, it tends to involve in duties that beyond the job description and contract (Dunegan, Duchon, & Uhl-Bien, 1992; Graen & Cashman, 1975; Liden & Graen, 1980; Scandura, Graen, & Novak, 1986).
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Loyalty was defined as the expression of supporting and protecting each other in terms of working context and personal status between leaders and followers (Dienesch & Liden, 1986). In addition, loyalty can be an outcome of the LMX process and also be a core element or dimension of LMX which maintain the development of LMX process (Graen, 1976; Graen & Scandura, 1987).
Moreover, loyalty can predict the types of tasks that leaders will assign to subordinates; the leaders who have loyalty relation with their followers tend to provide the tasks that require the decision-making and have a high responsibility to their subordinates (Liden & Graen, 1980; Scandura et al., 1986).
According to Dienesch and Liden (1986), they defined affect dimension as familiarity between leaders and followers based on interpersonal relationship rather than a relationship in work-context or professional values. However, in the LMX dimensions; the contribution is the most important for LMX process, but, affect dimension might little impact the LMX process. For instance, the leader and followers usually interact in the organization because of the structure.
Above all, affection frequently occurs over work interactions (Bridge & Baxter, 1992).
This final dimension was found by Liden and Maslyn (1998). They suggested that professional respect also important in the LMX process because the degree of perception of reputation between leaders and subordinates can develop the relationship before working or meeting with each other. For example, the person who has an excellent profile or experience inside and outside of an organization will obtain the expert power to develop the relations with their co-workers or leaders. So, the perception of professional respect is concerned as the one dimension that can impact the LMX process in an organization.
Antecedents and Consequences of Leader-Member Exchange
According to Henderson et al. (2009), in their study investigated antecedents and consequences of LMX theory. They found that leadership style, perceived organizational support, task advice, mentoring, career development, tangible resources, organizational culture, respect, and organizational structure may serve and help to explain how LMX process emerge in an organization. Moreover, leadership styles are related to transformational and transactional leadership, and it directly related to LMX quality, in which leaders who are highly transformational leaders seem having high LMX relationship with their subordinates (Wang, Law, Hackett, Wang,
& Chen, 2005).
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Furthermore, Erdogan and Bauer (2014) have been reviewed the antecedents of LMX theory. They discovered that employees' performance and capability are critical factors that can predict the direction of the LMX process because these factors may establish trustworthiness in group work (Bauer & Green, 1996). In the same way, the research by Nahrgang, Morgeson, and Ilies (2009) showed that member performance is occurring as the main role in the LMX process and it can built LMX relationship more effective and stable. In addition, proactive personality (Zhang, Wang, & Shi, 2012) also related to high LMX relationship and quality. Similarly, the high- quality of LMX relationship can be predicted by employees’ perception when they perceived their leaders’ support including advice, mentoring, and suggestion (Sluss & Thompson, 2012).
Equally important, Liao, Liu, and Loi (2010) studied the consequences of LMX quality, and they founded that high quality of LMX can increase job performance, organizational citizenship behaviors, and motivation. In addition, Bauer and Erdogan (2015) studied the consequences of LMX quality and published in Oxford handbook of leadership and organizations that employees' attitude is the most often found in the consequences of LMX studies. Moreover, the Meta-analytic resulting in LMX studies demonstrated that organizational commitment and employees’ turnover intentions are directly related to LMX quality (Dulebohn, Bommer, Liden, Brouer, & Ferris, 2012; Gerstner & Day, 1997). Finally, there are many studies (Farmer, Tierney,
& Kung-Mcintyre, 2003; Gong, Huang, & Farh, 2009; Shin & Zhou, 2003; Tierney & Farmer, 2011) confirmed that creativity is one of the LMX’s consequences. According to Gong et al. (2009), they examined the employees’ creative self-efficacy from 200 insurance agents, and the results found that transformational leadership is positively impacting employee creativity. Similarly, Farmer et al. (2003), and Shin and Zhou (2003) also discovered that leaders with positive interaction and style can provide a useful feedback and advice which encourage employee intellectual curiosity that leads them to creative thinking.
After all, it obviously that LMX theory has been explored over the past few decades. And it has occurred since the organization required the LMX process approaches to implement within the organization design for enhancing positive relationship between leaders and subordinates.
Intrinsic Motivation
There are many researchers have been defined the definitions of intrinsic motivation. In 1994, the intrinsic motivation is defined by Amabile, Hill, Hennessey, and Tighe, they defined
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intrinsic motivation as a perception of people which desires to do activity for responding to his or her interested and enjoyed. According to Ryan and Deci (2000), they defined intrinsic motivation as the execution of an activity with interested and satisfied; when persons who are intrinsically motivated do the task that they interested, they tend to be enjoyable and challenging rather than pressuring and exhausted. Similarly, Thomas (2000) provided the definition of intrinsic motivation as the persons who have positive and passionate feelings with their occupation and also they gain these kinds of feeling from their occupation. So, the intrinsically motivated persons tend to have more energy and reinforcement to fulfill their work personality than those who are not. In addition, Leat and El-Kot (2009) defined that intrinsic motivation is describing the degree of satisfaction when a person does the task in order to respond to their intrinsic motivation. In the same way, Kuvaas and Dysvik (2009) supported that intrinsic motivation emerges from the job itself, where a person feels pleasure and enjoyment. Furthermore, Daskin and Surucu (2016) claimed that the intrinsically motivated person feels that the task that he or she interested provides the challenging and excitement that his or her needs.
In this research, the definition of intrinsic motivation was defined by Gagné and Deci (2005), they defined intrinsic motivation based on self-determination theory that refers to the individual's perception and reason to participate in an activity with commitment, enjoyment, and positive attitude. So, the intrinsic motivation emerges from inside of people that they need to do something with intention, commitment, and joyful emotion to respond to their needs.
The Development of the Theory of Intrinsic Motivation
Since the motivation has emerged in literature, there are many researchers try to investigate the kind of motivation in a human which bring them to an anthropology area. Initially, the early exploration of the study of intrinsic motivation (Ryan & Deci, 2000; White, 1959) was tested in creatures’ behavior such as a rat. And he found that those creatures participate in this experiment with joyful, desirable, and curious even if this experiment not have any reinforcement or reward.
In 1985, Deci and Ryan develop the self-determination theory (SDT) in the empirical study
In 1985, Deci and Ryan develop the self-determination theory (SDT) in the empirical study