There are many theories galore in business. Most have a lot of practicality behind them. The Leadership Member Exchange Theory is one of those theories. Human beings tend to form relationships with others. Some relationships are good. Some aren’t. This theory examines the relationship between a leader and his group members and the unique ways these relationships can develop. People who are closer to the leader and usually have more responsibility and higher access to available resources are called the in-group. There is also an out-group that has less influence and put higher levels of constraint on the leader. The relationship starts when you join a team and has three stages. Role-taking is where you are evaluated by team members when you first join. Next phase is role making where a leader and the team member start to create the role and where the leader makes a promise and reaps the benefits from that promise. The final phase is routinization where it is an established pattern of interaction between leader and member. This sounds like most any relationship and only hard work at building one will result in a good relationship. Many things will attribute to a better relationship include human skills like patience, sensitivity, and the ability to see the viewpoint of others. Aggression, sarcasm, and self-centeredness are detrimental to establishing any good relationship especially in the workplace. Something to remember is that this theory does not really describe well the qualities of a leader that fosters good relationships.