The purpose of this study was to analyze the effects of a political culture of fear and power distance on student perceptions regarding the leader-member exchange theory (LMX) relationship with faculty, and their perceptions of nature of leadership in Libyan business schools. 650 Faculty members and students from business school in seven Libyan Universities were invited to participate in this study. The final number of participants that were accepted was 314. A survey was used to measure the relationship between faculty members and students, leadership style, culture of fear, and power distance. Different kinds of analysis were used to answer the study hypothesis. The analysis was conducted using SPSS software to conduct exploratory factor analyses (EFA) and t-tests. Amos software was used to conduct confirmatory factor analyses (CFA) and structural equation modeling (SEM). Results of SEM show that power distance negatively affects all LMX factors. Power distance directly and indirectly affects five of the leadership dimensions. It negatively affects Autocratic, Negative-charismatic, and Self-protective and positively affects Charismatic, Consciousness, and Humane Orientation. Culture of fear factors Force and Fealty/Finance directly affect the LMX factor Professional Respect. Culture of fear factors impact negatively and positively all leadership dimensions. The effects of LMX factors Professional Respect, Affect, and Contribution on leadership dimensions Charismatic, Self-protective, Ill-tempered, Autocratic, and Humane Orientation are largely direct. [The dissertation citations contained here are published with the permission of ProQuest LLC. Further reproduction is prohibited without permission. Copies of dissertations may be obtained by Telephone (800) 1-800-521-0600. Web page: http://www.proquest.com.bibliotheek.ehb.be/en-US/products/dissertations/individuals.shtml.]