Leadership is one of the major areas of study today. Numerous books, articles and research papers are written about this discipline and we receive a lot of information about it. Leadership is a relationship between leaders and followers, and building this relationship requires an appreciation for the personal values ​​of those who would be willing to give their energy and talents to achieve shared goals. Transformational leadership and leader-member exchange are popular theories in the leadership arena. Various researchers and writers have established the validity of these concepts. Numerous writers highlight the role of fairness in the relationship between a leader and a follower. In this essay I will attempt to compare and contrast two theories in relation to their ability to develop different qualities of the supervisor-subordinate relationship. We will first review the main aspects of LMX and transformational leadership models and then discuss them in relation to their ability to develop different qualities of supervisor-subordinate relationships. LMX theory emphasizes the quality of relationships formed between dyad members, rather than simply examining their behavior and traits. LMX has been defined as a system of components and their relationships, involving both leaders and followers, in interdependent behavior patterns, sharing mutual outcome tools and producing conceptions of environment and values. This theory explains the main point of exchange between two individuals and helps leaders realize their intentions when forming a relationship with a subordinate. LMX theory states that the centered process of leadership is in the interaction between leaders and followers. Identify some strengths of LM. ..... middle of paper ......"Equity theory in leader-member exchange: Do we all belong on the inside?" Kravis Leadership Institute Leadership Review, Summer 2002. (http://www.leadershipreview.org/2002summer/article1_summer_2002.asp) viewed 05/03/20087. Greg Thomas, “Leader-Member Exchange Theory (LMX),” Leadership Tip of the Month, November 2003. (http://www.leadingtoday.org/Onmag/nov03/LMX112003.html) viewed 02.05.20088. Tucker, Bruce A.; Russell, Robert F., “The Influence of the Transformational Leader,” Journal of Leadership & Organizational Studies, 2004. (http://goliath.ecnext.com/coms2/summary_0199-2375126_ITM) viewed 05.05.20089. Shaun Killian (MEd, MLead), “A practical overview of leadership theories”, Australian Leadership Development Centre, 2005-2007. (http://www.leadershipdevelopment.edu.au/Content_Common/pg-effect-theory.seo#personal%20tran) viewed 05.05.2008