Evolving Leader-Member Exchange (LMX) Theory and Market-Oriented Lateral Leaders in Turbulent Global Markets

In this study we examine the impact of market orientation of leaders on their leader-member exchange (IMX) with their followers. We review the evolution of leader-member exchange (LMX) theory over the exist five decades, and relate the strategic influence of increasing turbulence in the market environment on multiple generations of leadership styles during that period. Whereas vertical dyadic exchanges between hierarchical leaders and their followers may produce satisfactory performance of followers in equilibrium markets with predictable growth, these dyadic exchanges fail to do so in turbulent markets. Disequilibrium markets with disruptive turbulence demand introduction of discontinuous innovation from a new generation of market-oriented lateral leaders working closely with their boundary-spanning followers. We propose a number of hypotheses relating the market environment, leader-member exchange, and performance. Implications for managers and future researchers are discussed.