Answer to Question 1
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Answer to Question 2
Leader-member exchange theory describes the different kinds of relationships that may develop between a leader and a follower, and describes what the leader and the follower bring to and get back from the relationship. The theory focuses on the leader-follower dyad. Each dyad develops a unique relationship that stems from the unfolding interactions between the leader and the follower.
In some dyads, the leader develops a special relationship with the subordinate, characterized by mutual trust, commitment, and involvement. The subordinate helps the leader, the leader helps the subordinate, and each has substantial influence over the other. The leader spends a lot of time with the subordinate, who is given freedom to use his or her own judgment on the job. The subordinate tends to be satisfied and to perform at a high level. This relationship is defined as the in-group.
In a more traditional relationship, the leader relies on his or her formal authority and position in the organization to influence the subordinate, and the subordinate is expected to perform his or her job in an acceptable manner and to follow rules and the directives of the leader. The subordinate has considerably less influence over the leader, and the leader gives the subordinate less freedom to use his or her own judgment. These dyads are characterized by an impersonal, distant, or cold relationship between the leader and the subordinate. This defines the out-group. They are less satisfied and perform at a lower level than in-group subordinates.
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