PROCESS AND STRUCTURE IN LEADER-MEMBER EXCHANGE

Theory supporting the key premise of the leader-member exchange (LMX) approach to leadership, that leaders differentiate between subordinate s, hers not been fully developed. We address this deficiency by (a) re turning LMX research to its historical roots in exchange processes by introducing a framework for understanding relationship quality that is based on reciprocity, and (b) extending the traditional domain of LMX research beyond the formal leader-subordinate relationship in order t o offer ct more complete explanation of the differentiation process. W e employ insights derived from social network analysis to describe how social structure facilitates the exchange processes through which lea ders assist in incorporating some members into the inner life of an or ganization but exclude others.