Best Practices in Organizational Change Management

Abstract

This paper describes best practices in organizational change, including change models supported by academic and popular literature. We review the history of organizational change theory and the development of two unique styles of organizational change models, processual and descriptive. We look to see how these models are used in organizations today and what constitutes a best practice. We describe why the integration of existing models can provide better project success. We also analyze three unique case studies in light of these best practices. This analysis provides a deeper understanding of how each of these cases succeeded or failed based on the implementation plans employed by leaders in each organization.

Keywords: change management, change leadership, transition management, leading change

Introduction

Errida and Lotfi (2021) tell us that leaders in organizations are constantly working to change and adapt their business practices to increasingly complex and dynamic environments. However, many organizations struggle to implement successful change projects, and 60-70% of change efforts fail. Failure is often due to change managers ignoring best practices from change models and methodologies (Phillips & Klein, 2022). This paper will review the history and variety of organizational change theories, including those from popular literature. We will analyze what constitutes best practices based on analyzing the literature in this field of study.

60-70% of change efforts fail Click To Tweet

In the second half of this paper, we will review three separate case studies. We uncover what leaders did right and where they fell short of best practices. Through this analysis, we can better understand how these organizational change theories and models can work in the real world. For this analysis, we will look at the successful implementation of a project management methodology at a Moroccan construction company, the failed implementation of new surgical sutures at a Dutch hospital, and the successful reformation movement in ancient Judah by King Josiah.

Best Practices in Organizational Change

One of the undeniable facts about change is that it keeps on changing, as do change management methodologies. Studies in change management began in engineering management and industrial engineering more than 100 years ago with the work of Fredrick W. Taylor (Ratana et al., 2020). However, Kurt Lewin provided the first real contribution to change management. He popularized a three-step planned approach to change in 1951. This approach required top managers to plan and project change from the top of the organization. Lewin described the organizational change process as unfreezing, moving and acting, then refreezing in a new form (Ratana et al., 2020). This top-down, management-driven approach to change was considered the “theoretical foundation of planned change management” (Errida & Lotfi, 2021, p. 1).

Lewin’s planned approach to change management proved ineffective with the pace of environmental, technological, and organizational change in the 1990s. In 1991, strategic management consultant Arnold Judson expanded Lewin’s work into a five-phase step-by-step model, which included analysis, communication, gaining acceptance, changing from the status quo, and consolidating the new conditions (Ratana et al., 2020). This five-step model led to many other multi-step change management models, such as Kanter’s ten commandments, Hamel’s eight-step insurrection method, and Luecke’s seven steps of managing change (Ratana et al., 2020).

During this renaissance period of process-driven change management programs, John Kotter launched his eight-stage leading change method in 1996 (Ratana et al., 2020). This method became the best-known (Kang et al., 2022) and most influential approach in the change practitioner community (McLaren et al., 2022). Kotter created his approach based on his observations as a consultant and Kanter’s ten commandments (Ratana et al., 2020). Kotter was also heavily influenced by Lewin’s unfreeze-change-refreeze methodology, as evidenced by penguin and iceberg metaphors in his writings (McLaren et al., 2022).

John Kotter's eight-stage leading change method became the best-known model Click To Tweet

Over the years, organizational change management models have evolved along two different lines of thought, processual and descriptive. Like Kotter’s eight-stage leading change method, processual models assume that a “change process can be successfully managed by following a series of pre-planned steps” (Errida & Lotfi, 2021, p. 7). On the other hand, descriptive models worked to identify and explain the causes and effects of change initiatives. Errida and Lotfi (2021) identified 18 different processual models and 19 different descriptive models being used globally.

On the processual model side, Lewin’s unfreeze-change-refreeze methodology strongly influenced processual change model development. The concept is that unfreezing destabilizes the status quo and creates the need and buy-in for change. The transition involves moving to the new future state. Refreezing occurs after the change is complete to cement the new culture, processes, and behaviors. After Lewin’s methodology, the most notable processual model is Kotter’s eight-stage leading change method (Errida & Lotfi, 2021).

Kotter’s eight stages include establishing a sense of urgency, creating a powerful guiding coalition, developing a vision and strategy, communicating the change vision, empowering broad-based action, generating short-term wins, consolidating gains and producing more change, and anchoring new approaches in the culture (Kotter, 2012). The stages should be followed in rigid order, although Kotter later revised this idea in 2014, acknowledging that the steps can also be run concurrently (McLaren et al., 2022).

Kotter’s model is influential in the change leadership community but has faced criticism. Critics say it is practitioner-based, not robustly founded in theory, and has been referred to as “pop management.” Still, it is often cited in academic literature, is widely used in change management education, and is commonly deployed in change management efforts (McLaren et al., 2022). Kotter’s model was developed with consultancy-based observations but is generally considered a “recommendable reference” in academic literature. (McLaren et al., 2022).

Kotter’s change model has been deployed in various industries but has been especially successful in guiding change in higher education settings, specifically for dealing with administrative and technical changes (Kang et al., 2022). Kang et al. (2022) documented its use in a three-year change process in an engineering department at a university in the southwestern United States. They concluded that with some modifications, Kotter’s model worked well in an institutional setting. They found a non-linear approach to be more effective and integrated ideas from the design-based implementation research (DBIR) model (Kang et al., 2022).

Other modifications have been suggested to Kotter’s model as well. McLaren et al. (2022) suggest that “establishing a sense of urgency” can create anxiety and stress in employees, leading to increased resistance to change. Instead of vilifying the status quo, they recommend emphasizing the things from the status quo that will remain the same after the change initiative. In this manner, employees can have a firm anchor and reference point, reducing stress and increasing acceptance of the change (McLaren et al., 2022).

Fredberg and Pregmark (2022) share a similar concern. They say a sense of urgency can be a double-edged sword, supporting and preventing change. A sense of urgency and dissatisfaction with the current state created through negative management cues will create stress, anxiety, and fear. These undesirable emotions will block the needed change capabilities of the team. Pregmark (2022) agrees that a sense of urgency and dissatisfaction with the status quo alone are insufficient for a successful transformation in the current fast-paced business environment.

On the descriptive model side, Errida and Lotfi (2021) tell us that at least 19 different descriptive models are being used in business today. The 7-S Model was the first framework developed in this category. Former McKinsey consultants Tom Peters and Robert Waterman developed a model to assess the changes necessary to ensure operational effectiveness by looking at seven organizational elements: strategy, structure, systems, staff, style, skills, and shared values. Chmielewska et al. (2022) show where the 7-S Model was used to evaluate the organizational effectiveness of public hospitals in Warsaw, Poland. Their study showed that social factors play a significant role in the operation of these businesses, and change managers need to consider this when planning change initiatives.

Several notable works have shaped change management practices outside the processual and descriptive models of organizational change. One is the influencer model introduced by Grenny et al. (2013). It provides valuable insights into the art and science of influencing change in people and organizations. The authors emphasize the importance of identifying the vital behaviors that drive change and focusing on them. They provide four strategies to discover these vital behaviors: noticing the obvious, looking for crucial moments, learning from positive deviants, and spotting culture busters. They also describe six different sources of influence that can be used to create lasting change: personal motivation, social motivation, ability, structural motivation, structural ability, and cultural motivation.

Leaders have used the ideas in Grenny et al. (2013) in various industries to enact significant change. For example, Eng and Donnelly (2020) used these techniques and the success of the Delancey Street Foundation to model a reduction of crime and addiction in North America’s second-largest Chinatown in Vancouver, Canada. Holmes (2021) used these techniques to create beautiful, clean common spaces in Detroit. Saver (2022) used vital behaviors to reduce retained surgical items in hospital patients nationwide.

Another essential concept outside the processual and descriptive models of organizational change is the idea of the “human side” of change. Bridges and Bridges (2016) provide a distinct process for dealing with this critical aspect of organizational change by focusing on the transition management of employees. Their method has similarities to Lewin’s unfreeze-change-refreeze concept. Bridges and Bridges (2016) tell us that people process change through a psychological and emotional transition which includes a three-phase process. Those phases include an ending, a neutral zone, and a new beginning. Their methodology focuses on managing the human aspects of change through these three phases. The human side of change management is often overlooked in favor of more technical, procedural, and logistical concerns.

With so many change management methods, programs, and philosophies available for change practitioners today, it is hard for practitioners to determine which ones should be used to lead change initiatives effectively. Errida and Lotfi (2021) tell us that leaders should not rely on just one or even a few models because “certain factors may be omitted or neglected, which could result in failure if the model is inappropriate to the change context” (p. 2). They tell us that 60-70% of organizational change efforts fail because of the increasingly complex and dynamic business environments in which organizations operate. In their literature review, they looked at 37 organizational change models and determined the top 12 factors for success that were common throughout the research.

The 12 factors that impact organizational change management success, according to Errida and Lotfi (2021), are the following: clear and shared vision and strategy of change, change readiness and capacity for change, change team performance, activities for managing change management, resistance management, effective communication, motivation of employees and change agents, stakeholder engagement, leadership and sponsorship, reinforcement and sustainment of change, approach and planning for change, and monitoring with measurement. They also point out that companies should integrate project management into their change process.

Phillips and Klein (2022) took a similar approach and found 15 common strategies in 16 different change management models. They interviewed change practitioners to see how many used strategies similar to those in the change models. They discovered that most change practitioners ignored the popular change literature but found five common strategies between the models and the practitioners. These strategies included the following: communicate the change, involve stakeholders at all levels of the organization, focus on organizational culture, consider the organization’s mission and vision, and provide encouragement and incentives to change.

The best practice in organizational change management is to integrate existing models Click To Tweet

Each of these models and methodologies gives change practitioners various ways to think about organizational change. While there is no preferred change management model in practice today, there is a way to think about best practices in change management. Phillips and Klein (2022) tell us that there is no “universal change management approach that works in all settings” (p. 189). They say that the best practice is to integrate the existing models. Errida and Lotfi (2021) agree and say that integrating existing models will “lead to an integrated understanding of how to ensure successful organizational change” (p. 2). The best way for leaders to beat the odds and lead successful change initiatives is to have a broad understanding of the change literature and employ the right tactics for the given situation.

Case Studies in Organizational Change

In order to gain a better understanding of what organizational change management looks like in the real world, we considered three case studies. These case studies demonstrate many of the practices highlighted in the first section of this paper. We first looked at a successful implementation of a project management methodology at a Moroccan construction company. We then reviewed a failed implementation of new surgical sutures at a Dutch hospital. Finally, we analyzed a successful reformation movement in ancient Judah by King Josiah.

The first case study we reviewed was the implementation of a project management methodology (PMM) at a Moroccan construction company. This company had around 300 employees and sales of $35 million. Errida and Lotfi (2021) conducted this study to validate the findings from their literature review. They reviewed two organizational change initiatives over two years. One of those initiatives failed, and the other was considered successful. We reviewed the successful change program, which involved the implementation of a PMM.

Errida and Lotfi (2021) report that company management knew the current way they were running projects was inadequate and resulted in financial losses. The leadership team agreed implementing a new PMM was necessary to improve company performance. Company executives sponsored the project and actively supported the implementation team by providing them with all the resources needed for a successful project. Those resources included a change leader and funding for training, consultants, certification, and project management software. From the start, there was a sense of urgency, dissatisfaction with the status quo, executive sponsorship, and a guiding coalition.

Errida and Lotfi (2021) also found that a strong change leader led the project. In post-project interviews, they discovered that the leadership skills of the project change leader had a visible positive impact on the project outcome. Interviewees stated that the project change leader established a “clear vision and roadmap on how to implement the PMM” (p. 9). They also said he provided effective communication, regular meetings, personal coaching, and team motivation. The project change leader provided a vision for change, and he communicated that vision successfully throughout the project.

The project change leader also generated broad-based support for the project by successfully convincing influential supervisors and project managers to become active in the change process. Errida and Lotfi (2021) say that he “helped them overcome their fears and misconceptions and made them aware of the advantage of the new methodology” (p. 9). By making key employees early adopters and supporters of the new process, he was able to get those still resisting the change on board. Getting the blockers on board helped remove many obstacles for the overall project.

Errida and Lotfi (2021) also said this project succeeded because management adopted a “no blame” philosophy and encouraged employees to participate actively in meetings and discussions throughout the implementation. They effectively used two-way communication to help employees deal with the emotional side of the change. Bridges and Bridges (2016) remind us that change often means a loss for employees, and leaders need to allow employees to talk about those feelings. Leaders must bring the losses out in the open and acknowledge them openly and empathetically. They did this well in this project.

Finally, Errida and Lotfi (2021) pointed out the effective use of learning, coaching, and empowerment throughout this project as a success factor. Employees received training covering the principles, processes, and tools of the new methodology. The project leader assisted employees into the new way of doing business by doing as Bridges and Bridges (2016) suggest. Bridges and Bridges (2016) tell us that we can help employees adopt a new beginning by explaining the purpose, giving them a picture of what the future will look like, telling them the plan for the implementation, and giving them a part to play in the new beginning. The management team did all of that in this project.

In this successful case study, we see effective use of the concepts of both Kotter and Bridges. We also see validation of the literature review of Errida and Lotfi (2021). The 12 factors they identified that impact change management success were all used in this project. This use of various change management tools and techniques also further supports the idea that the best practice for change management is often to integrate ideas from several existing models.

The next case study we considered was an organizational change effort in the Netherlands that Graamans et al. (2020) studied. At the end of 2014, management in a large university hospital in the Netherlands launched an effort to find cheaper surgical suture material. Hospital management was looking to reduce costs and standardize sutures throughout the hospital. The hospital purchasing manager invited vendors to bid their most economically advantageous suture. The tender was awarded to a new supplier who produced a high-quality, lower-cost alternative to what the hospital was currently using.

Top hospital managers and the purchasing manager then implemented a small-scale change initiative using Kotter’s eight-stage leading change method. This project was a test case for further cost-cutting projects. The suture project was considered by management to be relatively easy to implement in both scale and complexity. However, hospital management failed in the most basic way. They failed to establish a sense of urgency and articulate why the status quo was problematic (Kotter, 2012).

Next, they put together a small guiding coalition that included outside medical experts and some of the hospital’s department heads. They did not include any of the surgeons who would be the ones using the new sutures. Management assumed they could communicate the change to surgeons by other means. They failed to create a true guiding coalition that could work together like a team to implement the change (Kotter, 2012). They left out a key stakeholder in the formation of the coalition.

Kotter (2012) tells us that the next two stages of the change process are developing a vision for the change and communicating that vision. Hospital managers believed cost-cutting was necessary, and this suture cost reduction was a test case for further cost-cutting projects. However, they failed to develop a clear vision to communicate to all hospital stakeholders. They also made the mistake of communicating this change primarily by email to the hospital staff. Information about the tendering process, the vendor decision, the verification process, the introduction of the new sutures to the hospital, and training workshops were all sent to hospital employees via email. Kotter (2012) tells us that change managers should be “using every vehicle possible to constantly communicate the new vision” (p. 23). Hospital management failed here as well.

Kotter (2012) says the next step in creating major change is to empower broad-based action and eliminate obstacles. Unfortunately, this is the stage where this project died. Management failed to create a sense of urgency, build a true guiding coalition, develop a vision, and properly communicate that vision. Because they fell short in these stages, they ran straight into a brick wall of unexpected opposition (Graamans et al., 2020).

Graamans et al. (2020) tell us that hospital management “anticipated some resistance” (p. 321). However, the hospital’s cardiothoracic surgeons met them with fierce defiance. Graamans et al. (2020) say that the surgeons “adamantly refused to work with the new suture material” (p. 321). Surgeons expressed anger at management, stockpiled their own supplies, and refused to operate. They told managers they would hold them accountable for potential patient deaths that could arise from using the new suture. They also threatened to go to the press if that were to happen. Management was surprised by the emotional reaction of the surgeons in accepting this small change in sutures.

What hospital managers failed to grasp is the emotional and psychological side of change management. Changing sutures resulted in an ending for surgeons. Bridges and Bridges (2016) remind us that “when endings take place, people get angry, sad, frightened, depressed, and confused” (p. 32). These surgeons felt that they weren’t consulted, communication about the change was poor, and management didn’t understand the critical nature of sutures and their use. Cardiothoracic surgeons consider the surgical suture as the lifeline a surgeon relies on to keep the patient alive. A small cost reduction could never justify the potential loss of a surgery patient.

In the end, management canceled the contract for the new sutures and stopped the project but not without a lot of hurt feelings on both sides. Management failed to involve critical stakeholders in the change process, and they failed to anticipate the emotional reaction to the change. This failed change initiative created hurt and mistrust between the surgeons and management. It also jeopardized all future cost-reduction efforts. (Graamans et al., 2020).

The final case study we considered was the organizational change effort led by Josiah, the king of Judah, from around 640 to 609 B.C. Josiah was the son of king Amon and the grandson of Manasseh, both of whom were disobedient kings of Judah. 2 Kings 21:20 tells us that Amon “did evil in the eyes of the Lord, as his father Manasseh had done” (New International Version, 1978/2011). Josiah was a young king who began his reign at eight years old after his father was assassinated. Josiah’s change leadership efforts in Judah were highly effective. To understand his impact on the nation, we considered his actions against the backdrop of Kotter’s eight-stage leading change method.

Josiah was 26 when a book was found in the temple that was likely Deuteronomy. The book had likely been hidden since the reign of Manasseh (Merida et al., 2015). When Josiah heard the words read from this book, he knew Judah had been disobedient. Josiah reacted immediately and he “tore his robes” (New International Version, 1978/2011, 2 Kings 22:11). Josiah also discovered God’s plan to destroy Judah because of the sins of Manasseh and all the kings who had come before him. Josiah then established a sense of urgency in an effort to delay God’s wrath. He began to lead a significant reformation movement in Judah (Merida et al., 2015).

Josiah created a guiding coalition by calling together “all the elders of Judah and Jerusalem” (New International Version, 1978/2011, 2 Kings 23:1). He then formed a new vision for Judah “to follow the Lord and keep his commands” (New International Version, 1978/2011, 2 Kings 23:3). He then communicated the new vision to all of Judah. 2 Kings 23:2 says “he went up to the temple of the Lord with the people of Judah, the inhabitants of Jerusalem, the priests and the prophets—all the people from the least to the greatest. He read in their hearing all the words of the Book of the Covenant, which had been found in the temple of the Lord” (New International Version, 1978/2011).

Josiah continued his change leadership efforts by empowering broad-based action throughout Judah. 2 Kings 23:4-20 provides a complete list of actions Josiah took to remove all priests, temples, symbols, and altars to all the foreign gods being worshipped in the country. Merida et al. (2015) call these actions “comprehensive and thorough” (p. 304). Josiah also generated a significant short-term win by fulfilling a prophecy that came from “a man of God” to Jeroboam I. Merida et al. (2015) tell us that Josiah “beats the altar at Bethel to dust and defiles it by burning bones on it” to ensure the word of the Lord in 1 Kings 13:2 comes to pass 300 years later (p. 304).

Josiah continued to consolidate his gains and produce more change by taking even more “anti-paganism” action in Judah (Merida et al., 2015, p. 305). 2 Kings 23:24 says that “Josiah got rid of the mediums and spiritists, the household gods, the idols and all the other detestable things seen in Judah and Jerusalem” (New International Version, 1978/2011). Josiah maintained his sense of urgency by cleaning up the past mistakes of his father, grandfather, and the kings who had come before them.

The most impressive action Josiah took, however, was anchoring the new approach into the culture. He did this when he announced the celebration of Passover in 2 Kings 23:21. He directed and supported his people in reinstating this sacred practice that had been abandoned for nearly 700 years. Merida et al. (2015) tell us, “in celebrating the festival, he outdoes Hezekiah and even David” (p. 304). Through Josiah’s faith, love of God, direct actions, and change leadership efforts, God delayed His wrath on Judah for the 31 years that Josiah remained king. With Josiah, we see a successful change leadership effort that includes all the elements of Kotter’s eight-stage leading change method.

Conclusion

The growth of organizational change theories in the 1990s was due to the decade’s rapid environmental, technological, and organizational changes. The pace of these changes has only increased since that time. Kotter (2012) tells us that “these trends demand more agility and change-friendly organizations; more leadership from more people” (p. ix). He says that leading change competently is the only answer for companies to keep up with the pace of change in today’s business environment.

We observed in this paper a wide variety of change management theories and methodologies, and there is not one universal change management approach that works in all companies and settings (Phillips & Klein, 2022). Instead, we find our best practices when we integrate the ideas from existing models (Errida and Lotfi, 2021). For example, we saw the successful implementation of a project management methodology using concepts from both Kotter and Bridges. Change leaders in that case study addressed both the procedural and emotional side of the change effort.

Today’s leaders need to be exposed to various tools and techniques in change management to increase the odds of successful change initiatives. We will see improved results and performance only by employing the best methods for the specific situation.

References

Bridges, W., & Bridges, S. M. (2016). Managing transitions: Making the most of change (4th ed.). Da Capo Lifelong Books A Member of the Perseus Books Group.

Chmielewska, M., Stokwiszewski, J., Markowska, J., & Hermanowski, T. (2022). Evaluating organizational performance of public hospitals using the McKinsey 7-S framework. BMC Health Services Research, 22(1), 7. doi:10.1186/s12913-021-07402-3

Eng, P. A., & Donnelly, E. (2020). Hidden dragons: The revitalizing of Vancouver’s Chinatown from humanistic perspectives. The Journal of Humanistic Psychology, 60(2), 205-226. doi:10.1177/0022167817696840

Errida, A., & Lotfi, B. (2021). The determinants of organizational change management success: Literature review and case study. International Journal of Engineering Business Management, 13 doi:10.1177/18479790211016273

Fredberg, T., & Pregmark, J. E. (2022). Organizational transformation: Handling the double-edged sword of urgency. Long Range Planning, 55(2), 102091. doi:10.1016/j.lrp.2021.102091

Graamans, E., Aij, K., Vonk, A., & ten Have, W. (2020). Case study: Examining failure in change management. Journal of Organizational Change Management, 33(2), 319-330. doi:10.1108/JOCM-06-2019-0204

Grenny, J., Patterson, K., Maxfield, D., McMillan, R., & Switzler, A. (2013). Influencer: The New Science of Leading Change, Second Edition (2nd ed.). McGraw Hill.

Holmes, M. R. (2021). The intersectionality of performance: A sweet spot. Performance Improvement, 60(9-10), 23-29. doi:10.1002/pfi.22005

Kang, S. P., Chen, Y., Svihla, V., Gallup, A., Ferris, K., & Datye, A. K. (2022). Guiding change in higher education: An emergent, iterative application of Kotter’s change model. Studies in Higher Education (Dorchester-on-Thames), 47(2), 270-289. doi:10.1080/03075079.2020.1741540

Kotter, J. P. (2012). Leading change. Harvard Business Review Press.

McLaren, T. A. S., van der Hoorn, B., & Fein, E. C. (2022). Why vilifying the status quo can derail a change effort: Kotter’s contradiction, and theory adaptation. Journal of Change Management, ahead-of-print(ahead-of-print), 1-19. doi:10.1080/14697017.2022.2137835

Merida, T., Platt, D., & Akin, D. L. (2015). Exalting Jesus in 1 & 2 Kings. Nashville, Tennessee: B & H Publishing Group.

New International Bible. (2011). The NIV Bible. https://www.thenivbible.com (Original work published 1978)

Phillips, J., & Klein, J. D. (2022). Change management: From theory to practice. TechTrends, 67(1), 189-197. doi:10.1007/s11528-022-00775-0

Pregmark, J. E. (2022). Renewing models for change. The Learning Organization, 29(3), 255-274. doi:10.1108/TLO-05-2021-0056

Ratana, S., Raksmey, C., & Danut, D. (2020). Conceptualizing a framework: A critical review of the development of change management theories. Studies in Business and Economics (Romania), 15(2), 205-214. doi:10.2478/sbe-2020-0035

Saver, C. (2022). Addressing the role of human factors in the retention of surgical items. AORN Journal, 116(2), 118-125. doi:10.1002/aom.13748

 

Note: This paper was written as part of my requirements for a Doctorate in Strategic Leadership at Liberty University. I’m sharing this here for those who may be interested in some of the theories of leadership. Let me know if you have any questions.

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Organizational Change Methods

In 1964, singer-songwriter Bob Dylan famously wrote, “the times they are a-changin’.” And the pace of that change has continued to accelerate since that song was written. Businesses need to be more agile and change-friendly than ever before. Today’s business leaders must be able to successfully lead change initiatives to stay ahead of trends and the competition (Kotter, 2012). Change is the only way businesses will survive (Phillips & Klein, 2022).

Change is the only way businesses will survive Click To Tweet

Fortunately, there are many approaches business leaders can use to influence change in their organizations (Phillips & Klein, 2022). The first real contribution to change management was developed by Kurt Lewin, who popularized a three-step planned approach to change in 1951. This approach required top managers to plan and project the change from the top of the organization. Lewin described the organizational change process as unfreezing, moving and acting, then refreezing in a new form (Ratana et al., 2020). This top-down, management-driven approach to change has worked for businesses for nearly four decades.

Lewin’s top-down, planned approach to change management, however, proved ineffective with the pace of environmental, technological, and organizational change in the 1990s. In 1991, Arnold Judson, a strategic management consultant, expanded Lewin’s work into a five-phase step-by-step model, which included analysis, communication, gaining acceptance, changing from the status quo, and consolidating the new conditions (Ratana et al., 2020). This five-step model led to many other multi-step change management models, such as Kanter’s ten commandments, Hamel’s eight-step insurrection method, and Luecke’s seven steps of managing change (Ratana et al., 2020).

During this renaissance period of process-driven change management programs, John Kotter launched his eight-stage leading change method in 1996 (Ratana et al., 2020). This method became the best-known (Kang et al., 2022) and most influential approach in the change practitioner community (McLaren et al., 2022). Kotter’s approach was mainly adopted from his observations as a consultant and Kanter’s ten commandments (Ratana et al., 2020). Kotter was also heavily influenced by Lewin’s unfreeze-change-freeze methodology, as evidenced by the penguin and iceberg metaphors in his writings (McLaren et al., 2022).

Kotter’s eight stages included establishing a sense of urgency, creating a powerful guiding coalition, developing a vision and strategy, communicating the change vision, empowering broad-based action, generating short-term wins, consolidating gains and producing more change, and anchoring new approaches in the culture (Kotter, 2012). The stages are meant to be followed in rigid order, although Kotter later revised this idea in 2014, acknowledging that the steps can also be run concurrently (McLaren et al., 2022).

Even though Kotter’s model is practitioner-based, not robustly founded in theory, and has been criticized as “pop-management,” it has been highly influential in academic literature, widely used in change management education, and is commonly deployed in change management efforts (McLaren et al., 2022). Kotter’s model was developed with consultancy-based observations but has been accepted as a “recommendable reference” in academic literature. (McLaren et al., 2022).

Today’s business leaders must be able to successfully lead change initiatives to stay ahead of trends and the competition Click To Tweet

Kotter’s change model has been deployed in various industries but has been especially successful in guiding change in higher education settings, specifically for dealing with administrative and technical changes (Kang et al., 2022). Kang et al. (2022) documented its use in a three-year change process in an engineering department at a university in the southwestern United States. They concluded that with some modifications, Kotter’s model worked well in an institutional setting. They found a non-linear approach to be more effective and integrated ideas from the design-based implementation research (DBIR) model (Kang et al., 2022).

Other modifications have been suggested to Kotter’s model as well. McLaren et al. (2022) suggest that “establishing a sense of urgency” can create anxiety and stress in employees and ultimately lead to increased resistance to change. Instead of vilifying the status quo, they recommend emphasizing the things from the status quo that will remain the same after the change initiative. In this manner, employees can have a firm anchor and reference point, reducing stress and increasing acceptance of the change (McLaren et al., 2022).

References

Kang, S. P., Chen, Y., Svihla, V., Gallup, A., Ferris, K., & Datye, A. K. (2022). Guiding change in higher education: An emergent, iterative application of Kotter’s change model. Studies in Higher Education (Dorchester-on-Thames), 47(2), 270-289. doi:10.1080/03075079.2020.1741540

Kotter, J. P. (2012). Leading change. Harvard Business Review Press.

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Note: This paper was written as part of my requirements for a Doctorate in Strategic Leadership at Liberty University. I’m sharing this here for those who may be interested in some of the theories of leadership. Let me know if you have any questions.

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Leader-Member Exchange (LMX) Theory and the Problem of Cliques

Note: This paper was written as part of my requirements for a Doctorate in Strategic Leadership at Liberty University. I’m sharing this here for those who may be interested in some of the theories of leadership. Let me know if you have any questions.

Introduction

The leader-member exchange (LMX) theory, originally called the vertical dyad linkage (VDL) theory, focuses on the vertical dyad linkages between leaders and followers (Dansereau et al., 1975). In the LMX theory, researchers demonstrated a reciprocal relationship between leaders and followers in which both parties contribute to the quality of the relationship. As such, LMX became one of the first leadership theories that included leaders and followers in the study of leadership (Schyns & Day, 2010).

Dansereau et al. (1975) showed that a leader’s limited resources of time and energy are inadequate to perform all the job requirements. Because of this, leaders cannot devote the required time and energy to all of their followers to help them reach optimum performance. Therefore, leaders spend a disproportionate amount of their resources on certain team members. This difference causes the formation of in-groups and out-groups, where in-group members gain more support and attention from the leader than out-group members (Seo et al., 2018).

LMX theory demonstrates how cliques can form in organizations. Because of leadership resource constraints, some groups of followers receive more information, attention, and support than others (Dansereau et al., 1975). This preferential treatment can be seen as unfair and discriminatory for out-group members and cause disunity and discord in the organization.

This literature review aims to develop a comprehensive understanding of the LMX theory, consider the challenge of cliques and discord in the workplace, and determine the best ways researchers have found to build unity. The information in this review comes from a select group of peer-reviewed articles chosen from the broad collection of papers written on this subject over the past 50 years.

LMX Theory, the Problem of Cliques, and Finding Unity

LMX Theory

LMX theory considers leadership as a process. The unique two-way relationship between a leader and each follower plays a significant role in developing the attitudes and behaviors of followers (Harris et al., 2014). Those attitudes and behaviors can provide both beneficial and detrimental impacts on the organization. In this section, we will review many key elements of the LMX theory that researchers have considered.

The Significance of Followers

At the heart of the LMX theory is the overall relationship quality between the leader and the follower. The LMX theory was the first to introduce a relationship-based approach to leadership theory (Buengeler et al., 2021). The relationship quality between the leader and the follower has a meaningful impact on a follower’s life. A high-quality relationship with the leader will lead to a higher status, opportunities, support, autonomy, and greater access to information (Liden et al., 2006). In exchange, the leader gains greater trust, loyalty, competence, support, and performance from the follower (Dienesch & Liden, 1986). Because the LMX theory is based on individual relationships, each leader-follower dyadic relationship will be unique (Schyns & Day, 2010).

In-Groups and Out-Groups

Chen and Zhang (2021) remind us that “people were born equal, yet they are treated differently everywhere” (p. 1074). This fact is especially true for followers in organizations. Followers with high-quality LMX relationships gain shared trust, open communications, and mutual support from leaders. On the other hand, followers with low-quality LMX relationships are limited to basic contractual duties and responsibilities (Chen & Zhang, 2021).

In early studies of long-term dyadic relationships with managers and followers, Dansereau et al. (1975) discovered the emergence of two nearly equal-sized groups. There was an in-group, characterized by expanded roles and a deeper relationship with the supervisor, and an out-group, which resembled a formal employment contract. Dansereau et al. (1975) discovered that the unique relationships between individual leaders and followers created a differentiated LMX over time.

A differentiated LMX means that in-group members receive more input, information, support, and concern from their leaders. In response, in-group members are more engaged, dependable, and supportive of their leader. In-group members go the extra mile for their leader, and the leader does the same for them. On the other hand, out-group members perform their duties but don’t go beyond their basic job description. Dansereau et al. (1975) explain that in-group members are led while out-group members are supervised.

LMX and Role Theory

LMX theory shows that leaders develop differentiated relationships with followers. Role theory suggests that the roles people occupy provide the context by which they establish relationships with one another. Role theory helps us understand the role-taking and role-making process as part of the LMX relationship. In LMX, the role-taking process unfolds when a leader communicates expectations to a follower. Based on that input, the relationship with the leader will evolve to higher or lower quality during the role-making stage. Once the relationship has evolved and is established, the roles between leader and follower become more stable and routine (Matta et al., 2015).

LMX and Social Exchange Theory

LMX theory is centered on the unique dyadic relationship between a leader and each follower. That relationship has a significant impact on follower motivation. The social exchange theory helps us understand how leaders and followers exchange benefits. The social exchange theory is based on the idea that relationships are created through a cost-benefit analysis process. As a part of that theory, reciprocity norms demonstrate that people return favors and acts of kindness. Followers in high-quality LMX relationships are highly motivated because of the beneficial social exchange. The leader provides support and resources beyond the formal employment contract in exchange for follower effort that goes beyond the formal job description (Wang & Hollenbeck, 2019).

LMX and Psychological Contracts

Another important concept to consider in the LMX theory is the psychological contract theory. Psychological contracts are implicit. In other words, psychological contracts are different from the explicit agreements in an employee’s formal employment contract. A psychological contract is an implied agreement. It describes the informal promises, commitments, and joint agreements that make up the relationship (Henderson et al., 2008).

Psychological contract fulfillment refers to a follower’s perception that the leader has met the contract fairly and equitably. High-quality LMX relationships maintain followers’ psychological contract fulfillment (Chen & Zhang, 2021). Psychological contract fulfillment has been shown to increase employee performance and organizational citizenship behavior (Henderson et al., 2008). The challenge for leaders is maintaining the fulfillment of psychological contracts of all employees, not just the in-group members.

 LMX Structures

An essential characteristic of the LMX theory is the LMX structure in the organization. Researchers have shown that not all LMX structures look and behave alike. Dansereau et al. (1975) originally observed two nearly equal-sized subgroups of employees with different characteristics. They called these groups the in-group and out-group. Later, this structure was referred to as the bimodal configuration (Seo et al., 2018) and LMX separation (Buengeler et al., 2021).

Bimodal configuration and LMX separation are characterized by nearly equal-sized subgroups of followers (50:50 or 60:40) with similar characteristics (Seo et al., 2018). There is an in-group and an out-group. The in-group members have a higher-quality LMX relationship with the leader compared to the out-group members, and the variation within the subgroup is low (Buengeler et al., 2021).

Researchers next considered the LMX structure called fragmented configuration (Seo et al., 2018), also known as LMX variety (Buengeler et al., 2021). In this structure, there are no subgroups. Every follower has a unique LMX relationship with the leader that varies in quality. No two followers have a similar relationship. In the fragmented configuration and LMX variety structure, the leader seeks to discover each follower’s unique talents and motivations during the role-making process (Seo et al., 2018). The leader customized his investment and interaction with the members based on their individual needs and preferences (Buengeler et al., 2021).

The final structure researchers considered was the solo-status configuration (Seo et al., 2018), also known as LMX disparity (Buengeler et al., 2021). In this structure, there are two subgroups, one large and one small (as few as one member), with two different LMX relationships. One subgroup has a higher-quality LMX relationship than the other. Seo et al. (2018) further break this structure into two forms: the solo-status high LMX configuration and the solo-status low LMX configuration.

The solo-status high LMX configuration is characterized by the leader forming a high-quality relationship with one or a few followers while maintaining a lower-quality relationship with the rest of the group. The solo-status low LMX configuration is characterized by the leader forming a high-quality relationship with most members and a low-quality relationship with one or a few followers (Seo et al., 2018).

The LMX Problem

LMX theory shows that leaders develop differentiated relationships with followers over time. From the earliest studies on this theory, researchers discovered a problem. Dansereau et al. (1975) referred to it as the “consequences of vertical exchanges” (p. 71). Some followers will get attention and support from the leader, and others won’t. Because of this disparity, out-group members feel left out and discriminated against. As a result, they experience less job satisfaction and increased turnover (Dansereau et al., 1975).

The problem with LMX is the formation of cliques in an organization due to LMX differentiation. In-group members get disproportional attention from leaders, which other members see as unfair. This special treatment for some employees creates conflict, discord, and an “us and them” environment inside the organization. In this section, we review how LMX differentiation creates problems in the workplace.

The Problem of Resources

Leaders are often asked to do more with less so being a good steward of workgroup resources is critical to success. The LMX theory shows that resource deployment in an organization is directly influenced by the quality of an employee’s relationship with their leader (Omilion-Hodges et al., 2013). Since company resources (money, space, people, and equipment) and leader resources (time and energy) are limited, leaders must decide to apply them in the best way possible. Studies show they use them disproportionately for high-quality LMX members doing critical tasks (Dansereau et al., 1975).

Employees in high-quality LMX relationships get more resources from their leaders than their low-quality LMX counterparts. The fact that some employees get preferential access to resources hurts the collective functioning of the group (Omilion-Hodges et al., 2013). There is an overall perception of unfairness in the organization, especially when leaders don’t fully explain why they favor certain groups of employees (Liden et al., 2006).

The Problem with Similarity

Another source of problems for the LMX theory occurs in the role-taking and role-making process. At the beginning of the LMX relationship, the leader initiates the connection with the follower through role-taking. In role-taking, the leader determines the relationship’s quality based on initial impressions of the follower’s capabilities and weaknesses. After this initial process, the leader and follower enter the role-making stage. In this stage, both the leader and follower are active participants. In the role-making stage, the leader and follower become emotionally entrained (Cropanzano et al., 2017).

The problem with this process is the similarity-attraction paradigm. This paradigm states that people are drawn to other people with similar demographics, characteristics, activities, and attitudes (McClane, 1991). Followers similar to the leader are more likely to develop a greater LMX relationship with the leader through role-taking and role-making. If this occurs, these individuals will gain greater access to resources than those dissimilar to the leader. This disparity could lead to feelings of discrimination in the workforce (McClane, 1991). This bias is especially problematic for organizations if the discrimination is based on gender, age, ability, national origin, or race.

The Fairness Dilemma

Procedural justice relates to fairness in allocating resources, resolving disputes, and making decisions. Followers perceive procedural justice when a leader’s decisions are made fairly and consistently based on unbiased merit (Chen et al., 2018). A procedural justice climate exists when followers perceive fairness in organizational decision-making because it is consistent, accurate, and unbiased (Jung et al., 2022). Followers also sense procedural justice when they have some level of control or influence over the outcome of decisions, such as opportunities to participate in the decision-making process (Chen et al., 2018).

By its very nature, LMX is biased toward in-group members. In-group members with a high-quality LMX relationship have more input and influence in disputes, decisions, and resource allocation. LMX differentiation decreases followers’ feelings of procedural justice because followers are treated differently based on their LMX status (Chen et al., 2018). The challenge for leaders is establishing and maintaining a procedural justice climate in an environment where LMX differentiation exists.

Effects on the Organization

The LMX differentiation process creates a favored group of followers in the workplace. This differentiation runs counter to the human need for fairness. In-group members with a high-quality LMX relationship receive preferential treatment from the leader. The existence of this special status could create a situation where social categorization would begin to emerge in the organization. Followers with similar high-quality LMX status may create a clique that excludes those with a lower status, thus creating an isolated minority. Followers in the minority status are more likely to have reduced cooperative behaviors, which would create discord in the organization (Chen & Zhang, 2021).

Perceptions of unjustified LMX differentiation have been shown to impede coworker communication, damage coworker relationships, reduce organizational citizenship behavior, and decrease overall employee well-being (Omilion-Hodges et al., 2013). High LMX differentiation can trigger negative emotional responses if perceived as unfair. These responses could include anger, disgust, and contempt, which are all detrimental to organizational unity (Cropanzano et al., 2017). Research has shown that employees prefer unity and less unjustified or unexplained LMX variance in their workgroups (Omilion-Hodges et al., 2013). The question is – how can leaders create organizational unity in a workplace where LMX differentiation exists?

Finding Unity in LMX

LMX theory shows how a leader will develop differentiated relationships with followers based on their unique dyadic relationships. Followers who develop a high-quality LMX relationship with the leader will gain advantages over those with a lower-quality LMX relationship. Followers in the in-group gain shared trust, open communications, and mutual support from the leader. This preferential treatment can be seen as unfair and discriminatory for out-group members and can cause disunity and discord in the organization The challenge is to identify ways create unity in the organization where LMX differentiation exists. In examining the research, we identified a number of ways to do this.

Finding Unity in LMX Structures

Researchers have found that some LMX structures are better for maintaining organizational unity. Buengeler et al. (2021) point to LMX variety as one of those structures. In LMX variety, there are no subgroups, and every follower has a unique LMX relationship with the leader that varies in quality. These unique relationships are created based on the followers’ expertise and experience and may help the group’s overall ability to function. LMX variety is formed by a leader’s intentional efforts to build a unique relationship with each member based on their individual needs, motivations, contributions, and preferences (Buengeler et al., 2021).

This same structure is called the fragmented configuration by Seo et al. (2018). They found that the fragmented configuration led to greater organizational commitment and reduced turnover. They explain that, in the fragmented configuration, the leader develops a unique, high-quality relationship with most of the followers based on their skills and abilities. The followers reciprocate with increased loyalty, support, and commitment to the organization (Seo et al., 2018).

The only other LMX structure to show improved organization performance was the solo-status low LMX configuration. In this structure, the leader forms a high-quality relationship with most members and a low-quality relationship with one or a few followers. The minority member(s) becomes the token(s) of the group. The visibility of being the minority member(s) causes them to respond in two unique ways: increasing their efforts or trying to blend in with the majority. In either case, organizational unity is maintained, and performance improves (Seo et al., 2018).

Finding Unity in Role Theory

LMX theory is rooted in role theory based on the “developed” or “negotiated” roles that followers take on as a result of their interactions with the leader (Dienesch & Liden, 1986). Chen et al. (2018) take this concept further to show that LMX differentiation between followers is critical to group performance. They explain that a leader needs to assign tasks and resources based on the followers’ abilities. Chen et al. (2018) show that LMX differentiation benefits the group when based on followers’ ability, competence, task performance, and contributions to the organization. In other words, so long as it is merit-based. The organization’s overall performance is improved when the leader gives more autonomy and resources to top performers so they can engage in more challenging activities (Chen et al., 2018).

Chen et al. (2018) acknowledge that the outcome of LMX differentiation may still invoke perceptions of injustice among members. But, they explain that the perception of unfairness is mitigated when the differentiation is based on merit and high-quality LMX members are held accountable for higher performance levels. Chen et al. (2018) equate this acceptance to employee pay. Pay differentiation does not invoke perceptions of injustice so long as it is based on merit, task performance, and experience.

Finding Unity in a Fair Social Exchange

Studies on the LMX theory often invoke the social exchange theory and the norm of reciprocity to account for the development, maintenance, and output of individual high-quality LMX relationships (Henderson et al., 2008). These high-quality LMX relationships are based on the idea that both the leader and the member contribute valuable resources, and both parties view the exchange as fair (Schyns & Day, 2010).

Schyns and Day (2010) take this further and explain that LMX differentiation in an organization will be perceived as fair by all members so long as they see each exchange as fair and equitable, even though each LMX exchange may be different. Chen et al. (2018) explain that LMX differentiation is seen as favorable in a group so long as the differentiation is directly related to the members’ task performance variation. In other words, if employees see that the preferential treatment of certain employees is merit-based and justified, they will be more willing to accept it.

Finding Unity in Equality and Respect

Dansereau et al. (1975) tell us that leaders have a resource problem. They say that leaders “cannot devote the required time and energy to each and all of [their] members to ensure their optimum performance” (p. 72). Chen and Zhang (2021) have a different perspective. They tell us that LMX differentiation in an organization also reflects a leader’s values and motives, not just resources. Chen and Zhang (2021) state that if leaders want to avoid the formation of cliques due to the social categorization process, they need to devote more time and energy to developing high-quality relationships with all their members in an equal way. To maintain unity, leaders must also be on guard for fault lines that separate the minority from the majority (Chen & Zhang, 2021).

Chen and Zhang (2021) also encourage leaders to treat all members respectfully and politely regardless of LMX status. By doing so, leaders create the perception of strong interpersonal justice and social treatment in the organization. Out-group members will be more likely to merge into the group and engage in beneficial activities if they feel confident they will be treated fairly in the future (Chen & Zhang, 2021).

Finding Unity in LMX Excellence

Schyns and Day (2010) coined the term LMX excellence to describe three critical parts of effective LMX practice in organizations: (1) high-quality relationships, (2) leader and follower agreement about the relationships, and (3) consensus among all followers concerning relationships with the leader. They suggest four ways to achieve LMX excellence in an organization: culture, span of control, transformational leadership, and psychological climate. We also added consistency and transparency from the work of Henderson et al. (2008).

The right organizational culture can create an environment conducive to LMX excellence. For LMX to create unity in an organization, leaders must establish and emphasize group identity and a group focus. This group focus is especially important in more individualistic cultures. As members see LMX differentiation in terms of the benefits for the overall group, there is less discord and more unity (Schyns & Day, 2010).

Leaders also need to consider their span of control. Often leaders do not have the resources to establish high-quality relationships with all their followers because they have too many direct reports. Leaders with a large span of control are also less likely to accept overtures from low-quality LMX followers to develop their working relationships. Leaders with a smaller span of control are more likely to have high-quality relationships with all their followers (Schyns & Day, 2010).

Transformational leadership can also lead to LMX excellence. Transformational leaders engage in individual consideration, a behavior likely to enhance LMX quality for all employees. Transformational leaders focus on a common goal or vision which positively affects social identity and consensus. Unity is built when all members see the need to have a positive relationship with the leader to meet the collective objectives (Schyns & Day, 2010).

A climate of psychological safety can also help a leader achieve LMX excellence. Psychological safety allows for constructive dialogue between the members and the leader such that agreement and consensus will emerge in an organization. A psychologically safe environment allows followers and leaders to build trust, agreement, and unity (Schyns & Day, 2010).

Finally, Henderson et al. (2008) remind us that, to achieve LMX excellence, LMX differentiation in the workplace must be consistent with the goals, demands, and customs of the market and the group. Consistency with common practice will increase the likelihood that differentiation will be accepted by the members and will not cause conflict or a loss of motivation. They also stress the importance of transparency. The elements of LMX differentiation that are valuable to the leader and members in achieving group objectives should be communicated. Leaders need to be transparent about why some members are treated differently than others. Transparency and communications around LMX differentiation will help eliminate discord in the organization (Henderson et al., 2008).

Methods and Limitations

To tackle a literature review on a 50-year-old leadership topic such as the LMX theory, we needed a place to start. Our method was to begin with a recent article about the challenges of minority out-group members. We selected the Chen and Zhang (2021) study as our starting point because they specifically looked at the impact of cliques in the workplace due to LMX differentiation.

We then used the reference list from this paper to dig deeper into the body of work on this subject. As we uncovered a topic of particular interest, we pulled the original study to understand the topic deeper. In total, we reviewed 16 articles that span five decades. Each of these articles added to our understanding of this complex topic.

The limitations of this literature review are significant. The most important limitation was the small percentage of available studies we looked at for this review. The sheer volume of literature that has been written on this popular topic precluded us from getting a more comprehensive view of this topic. To understand the popularity of the LMX theory, consider these statistics. By 1986, researchers had written only 21 journal articles on this theory (Dienesch & Liden, 1986). In 2019, more than 1,845 articles on the LMX theory existed (Buengeler et al., 2021). Our literature review of only 16 studies was not all-inclusive and only scratched the surface of this popular and complex subject.

Questions for Further Research

Despite the relatively small sample of papers we considered as part of this literature review, we did gain an understanding of the challenges of cliques in the workplace as a result of LMX differentiation. We also learned that researchers had considered many approaches to ensure organizational unity is maintained in an environment where LMX differentiation exists.

Since LMX differentiation is often due to a limitation of resources on the part of the leader (Dansereau et al., 1975), we were surprised that we did not find many researchers considering span of control as an obvious solution to the resource problem. With a reduced span of control, leaders would have the necessary time and energy to develop high-quality LMX relationships with all their direct reports. Of all the articles we reviewed, only Schyns and Day (2010) considered this as a solution.

A search for peer-reviewed journal articles with the terms “LMX” and “span of control” in the abstract revealed only six articles written in 50 years on this topic. After reviewing the abstracts in each of these papers, we learned that none of these articles considered the interaction between span of control and LMX excellence as defined by Schyns and Day (2010). We recommend that future researchers consider studying the compelling interaction between span of control and LMX excellence to provide an optimum approach to leading a team with unity in an environment where differentiated LMX exists.

Conclusions and Recommendations

As a part of this literature review, we learned that leaders develop differentiated relationships with followers ranging from high-quality, deep relationships to more transactional ones. This differentiated approach to leadership is due to limited resources and can cause organizational problems as out-group receive less support and attention from the leader than do in-group members. We also learned that LMX differentiation could cause cliques to form in an organization.

We reviewed several potential solutions researchers have studied to maintain unity in an environment where differentiated LMX exists. Researchers discovered several viable solutions to maintain unity: optimum LMX structures, role theory, fair social exchange, equality, respect, culture, span of control, transformational leadership, psychological climate, consistency, and transparency. All of these solutions represented actions leaders can take to reach LMX excellence.

We were surprised by the lack of research on the topic of span of control which would appear to be an obvious solution to the resource problem at the heart of LMX differentiation. We recommend that researchers in the future consider studying the interaction between span of control and LMX excellence to provide additional insight on this potential solution.

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