<P> The leader--member exchange (LMX) theory is a relationship - based approach to leadership that focuses on the two - way (dyadic) relationship between leaders and followers . It suggests that leaders develop an exchange with each of their subordinates, and that the quality of these leader--member exchange relationships influences subordinates' responsibility, decisions, and access to resources and performance . Relationships are based on trust and respect and are often emotional relationships that extend beyond the scope of employment . Leader--member exchange may promote positive employment experiences and augment organizational effectiveness . It is widely used by many managers and is replacing many of its predecessors . </P> <P> The latest version (2016) of leader--member exchange theory of leadership development explains the growth of vertical dyadic workplace influence and team performance in terms of selection and self - selection of informal apprenticeships in leadership . It suggests that leaders select the best and make offers and members of team accept or not . Apprentices who complete the program develop strong emotional attachments with their mentor - teacher . This is reflected in their descriptions by both of their relationship as one of mutual respect for competence, trust in character and benevolence toward each other . Those who complete the apprenticeship training are more collaborative, helpful to all team members, more deeply engaged in team activities and contribute more to team health and prosperity . This is seen as a win - win relationship by both parties, their team, network and overall organization . </P>

High leader–member exchange (lmx) relationships are based on