Final answer:
The early studies of LMX identified in-groups and out-groups as the two types of vertical linkages which describe levels of closeness and trust between leaders and members within an organization and how these relationships affect organizational dynamics and individual behaviors.
Step-by-step explanation:
The early studies of Leader-Member Exchange (LMX) theory identified two fundamental types of vertical linkages within the organizational context: in-groups and out-groups. In-groups are those with whom leaders have close, trusted relationships, often leading to more opportunities and resources for those members.
Out-groups, conversely, have more formal relationships with leaders and generally fewer opportunities and resources. LMX theory explores how these relationships influence various organizational outcomes, including job satisfaction, turnover, and performance.
Sociologist William Sumner developed the concepts of in-groups and out-groups to describe the potent influence of group inclusion and exclusion. Within the workplace, these dynamics play out in various forms, whether through executive cliques, specialized teams, or social circles. The feelings of inclusion within an in-group can foster loyalty and motivation, while exclusion can lead to competition or even negative behaviors.
LMX theory works with the relationships that employees develop with their organizations. It studies how these relationships influence coworker interactions, shaped by organizational norms, and impacts individual behaviors, such as the tendency to identify with an in-group and the pursuit of improved status within it.