The Leader-Member Exchange (LMX) Model of Leadership

The Leader-Member Exchange (LMX) Model of Leadership

Identify “The Leader-Member Exchange (LMX) Model of Leadership: In Group &

Out Group” course concept that apply to this case (the attached document). Be as

specific as possible and justify your response by demonstrating your understanding

of how the concept relate to information in the scenario. Using headings/sub-

headings is strongly encouraged.

Case Study

Analyze the situation below by integrating and applying course concept “The Leader-Member

Exchange (LMX) Model of Leadership”.


Fine Foods, Inc. is a global company that wants to improve job performance. Their

headquarters is in the U.S., but they have major offices in Switzerland and China. The CEO of

Fine Foods has specially appointed a task force of four to create a new compensation and

rewards system that will be implemented in all of their locations worldwide. The team must

submit a proposal within a month.

At the first team meeting, Serge, Elizabeth, Anna and Cayce discuss their task for the first

time. Serge, who is from Switzerland, immediately proposes a system where compensation is

completely results-oriented and competitive, like it is in the U.S. and Switzerland. Serge says

that he is very confident that this will be the best solution and that the CEO will praise them for

this results-focused system.

Elizabeth says she always trusts Serge and agrees that the results-oriented system is the

way to go. Elizabeth and Serge are ready to start drafting their plan when Anna speaks up. She

asks, “Do we have to implement the same system for all of our locations? There may be different

structures that will be more effective at improving job performance in different countries.” Serge

says he is sure it must be the same system across all countries, but Anna and Cayce are not sure.

During the discussion they realize that none of them have spoken directly to the CEO; everyone

got this assignment from their own direct supervisors and heard slightly different instructions.

When pressed by Serge, Anna does not have an alternative solution. She wants to do

some research individually and discuss it at length with the group. Cayce suggests a system

where the boss ranks individual employees to determine compensation, without input from the

employee or others, arguing that the boss always knows best, no matter what country.

No one responds to Cayce’s suggestion. There is a long pause, and it seems meeting

productivity has come to a halt. Elizabeth says that the team seems to be at a stopping point and

suggests, “Why don’t we take a break and get lunch together and then revisit this after we’ve

clarified our charge?”


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