The leader’s first impression of a group member’s competency plays an important role in placing the group member in the in-group or in the out-group. Another key linking factor is whether the leader and team member have positive or negative chemistry. Group members who make effective use of influence and political tactics increase their chances of becoming members of the in-group.

A field study seems to confirm that first impressions make a difference. The researchers gathered ratings of six aspects of the manager–group member dyad. Results showed that the initial leader expectations of members and member expectations of the leader were good predictors of the LMXs at two weeks and at six weeks. Member expectations of the leader also accurately predicted member assessments of the quality of the LMX at six months. An important interpretation of these results is that the LMX is formed in the first days of the relationship.

In summary, the LMX model provides a partial explanation of teamwork development. Members of the in-group work smoothly together and with the leader because they feel privileged. Being a member of the out-group may not diminish teamwork, but it certainly does not make a positive contribution.