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Scientific Essay from the year 2011 in the subject Business economics - Business Management, Corporate Governance, grade: 9.0 out of 10, Griffith University (MBA - Business), course: Leadership, language: English, abstract: Business today is more competitive and global than ever. Hence greater challenges are imposed on businesses and their leaders at all levels. Companies are forced to be more efficient and effective, i.e. maximize outcome from available resources. Within leadership theory it has repeatedly been established that high-quality LMX relationships increases employee‟s performance, i.e. maximizes output. I.e. developing high-quality LMX relationships, are a means to optimize business performance. In this essay I will utilize motivational theories to support my argument that the quality of LMX relationship, affects followers job performance and satisfaction. And further analyse the effect of respectively a transactional and transformational approach to leadership.