Example. A simple example of social exchange theory can be seen
in the interaction of asking someone out on a date
. If the person says yes, you have gained a reward and are likely to repeat the interaction by asking that person out again, or by asking someone else out.
The basic definition of social exchange theory is that
people make decisions by consciously or unconsciously measuring the costs and rewards of a relationship or action, ultimately seeking to maximize their reward
. … Each person wants to get more from an interaction or relationship than they give.
The basic definition of social exchange theory is that
people make decisions by consciously or unconsciously measuring the costs and rewards of a relationship or action, ultimately seeking to maximize their reward
. … Each person wants to get more from an interaction or relationship than they give.
Social exchange theory proposes that
social behavior is the result of an exchange process
. The purpose of this exchange is to maximize benefits and minimize costs. According to this theory, developed by sociologist George Homans, people weigh the potential benefits and risks of social relationships.
Social exchange theory is a concept based on the notion that a relationship between two people is created through a process of cost-benefit analysis. … While the theory can be used to
measure romantic relationships
, it can also be applied to determine the balance within a friendship.
ADVANTAGES OF SOCIAL EXCHANGE THEORY
It explains that
individuals minimize their costs and maximizes their rewards within a relationship
. It tells one how to sustain and keep relationships. It is a timely and systematic approach. The theory is almost applicable in all situations.
Social exchange theory is essentially
a cost-benefit analysis that evaluates the risks and rewards of pursuing or continuing a relationship
. Social exchange theory is used to explain people’s actions in a variety of settings and within a multitude of relationships. Related: How to Manage Employees.
Homans based his theory on
behaviorism
to conclude that people pursue rewards to minimize costs. The “satisfactory-ness” of the rewards that a party gains from an exchange relationship is judged relative to some standard, which may vary from party to party.
Social exchanges opposed to economic exchanges
involve a connection with another person
; social exchanges involve trust, not legal obligations; social exchanges are more flexible and rarely involve explicit bargaining.
The exchange theory of aging, proposed by James Dowd in 1975, is
a social theory that addresses a perceived loss of status and power associated with aging
. … Rewards could be in the form of currency, information, goods, services, respect, power, social support, social acceptance, social approval, etc.
In families, a social exchange perspective argues
that family relationships become inter- dependent, or interactional
. In this respect, power becomes characteristic of the relationship dyad and understanding family relationships includes assessing the power that is held among the actors in those relationships.
Social exchange theory can also be applied to leadership studies as reported by Hollandder and Julian (1969). They
propose that the leader provides more benefits or regards than burden or costs to the followers who in exchange help him achieve the goals of the organization
.
Rewards can consist of
anything tangible or intangible that an individual considers valuable
. For instance, business relationships may provide several concrete benefits, such as income or material goods, in addition to several more abstract benefits, such as prestige and a sense of security.
As you can see, social exchange theory plays an enormous role in the workplace and employee engagement. The good news is that managers who
understand the theory and actively manage relationships in tune with
it are likely to have happier staff and more satisfied customers.
Social exchange theory is one of the most prominent conceptual perspectives in management, as well as related fields like sociology and social psychology. An important criticism of social exchange theory; however, is
that it lacks sufficient theoretical precision, and thus has limited utility
.
Social exchange theory proposes that
social behavior
is the result of an exchange process. … Online social networks seem to be an ideal platform for social exchange because they provide an opportunity to keep social relations with a relatively low cost compared to offline relations.
