Document Type

Closed Project

Publication Date

Fall 1998


Dundar Kocaoglu

Course Number

ETM 520


Susanne Scott and Reginald Bruce researched how a manager’s relationship with subordinate research and development professionals can impact innovative behavior, and how problem-solving style relates to innovative behavior. For the manager/subordinate relationship, they focused on an area called ‘leadermember exchange’ (LMX) theory. LMX recognizes both the transactional and transformational aspects of leadership, emphasizing the relationship between managers and employees. Transactional leadership is based on fulfilling contractual obligations – performing the duties of the job for pay. Transformational leadership dictates that leaders can motivate employees to work at a high level than they otherwise would. Through vision and expressions of confidence in employee abilities, managers transform employees so that they transcend their individual needs to pursue group goals. This has traditionally been viewed as a unidirectional flow from managers to employees. LMX cites the social exchange between managers and employees, a bi-directional flow in which managers and employees influence each other, as the key element influencing productivity and innovative behavior. ‘High’ LMX relationships are characterized by collaborative partnerships between managers and employees.


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