An assumption that leaders will develop relationships which typically involve a degree of exchange between themselves and subordinates or co-workers. Two groups form, one with a strong LMX relationship (the in-group or unit) and another lacking in a strong LMX relationship (the out-group).
LEADER-MEMBER EXCHANGE THEORY (LMX THEORY!: “In the workplace, some leaders of groups or companies have been known to swap their characteristics (leader-member exchange theory), if only temporarily with other workers to widen their skillset.”