The Leader-Member Exchange in Teams of B&H Companies
The Leader-Member Exchange in Teams of B&H Companies

Summary/Abstract: In turbulent and dynamic business environment, companies face intense competition and continuously fight for survival on markets. In order to survive in unstable market conditions, companies must develop abilities to act proactively, to organize employees in teams and to answer more rapidly to customer priorities and silent needs. Proactive attitude in companies is mainly influenced by human relations, interaction, organizational culture and innovations. Therefore, conclusion is drawn how individuals cannot solve complex organizational issues. Authors of this paper present Leader-Member Exchange (LMX) theory of leadership and elaborate its contribution to team development in companies. According to this theory, the main task of a leader is to create and expand boundaries of in-groups that show characteristics of high-performance teams, which are the main drivers of success in companies. Research is conducted in 51 companies in Bosnia and Herzegovina. The results showed significant presence of in-groups and also variety in process of their creation in means of average age of employees, number of years on managing position, owners’ structure, etc. The main objective of this paper is to acknowledge the link between number of in-groups (effective teams), profitability and sales.

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