In terms of follower categorization, what does LMX theory define as the basis for in-groups and out-groups?

The basis of in-groups and out-groups in LMX (Leader-Member Exchange) theory is fundamentally about the relationship quality between leaders and followers. This theory posits that leaders develop unique, dyadic relationships with each of their followers, which can lead to varying degrees of trust, respect, and obligation.

In-groups are formed when a leader develops high-quality exchanges with certain followers, characterized by mutual trust, respect, and a sense of connection. These followers are often given more responsibilities, resources, and opportunities for development. The positive nature of the relationship allows for continuous interaction and support, enhancing the follower's experience and engagement.

Conversely, out-groups emerge when the relationship quality is lower, resulting in limited exchanges. Followers in these groups may not receive the same level of attention or resources, leading to a more transactional relationship. The concept of relationship quality is central to LMX theory because it explains how and why some followers feel more integrated into their teams and organizations than others, ultimately impacting motivation and performance.