Social exchange theory

Acronym
N/A

Alternate name(s)
Exchange theory

Main dependent construct(s)/factor(s)
Value and utility: profit, rewards, approval, status, reputation, flexibility, and trust.

Main independent construct(s)/factor(s)
Exchange relation, dependency, and power

Concise description of theory
Social exchange theory grew out of the intersection of economics, psychology and sociology. According to Hormans (1958), the initiator of the theory, it was developed to understand the social behavior of humans in economic undertakings. The fundamental difference between economic exchange and social exchange theory is in the way actors are viewed. Exchange theory “views actors (person or firm) as dealing not with another actor but with a market” (Emerson,1987, P.11), responding to various market characteristics; while social exchange theory views the exchange relationship between specific actors as “actions contingent on rewarding reactions from others.” (Blau, 1964, P.91)

Today, social exchange theory exists in many forms, but all of them are driven by the same central concept of actors exchanging resources via a social exchange relationship. Where social exchange (e.g., Ax; By ) is the voluntary transfer of resources (x,y,…) between multiple actors (A,B,…) (Cook,1977). The theory has evolved from a dyadic model to a network model (Cook, 1977) with market properties (Emerson, 1987). The crux of the theory is still best captured in Homans’s own words (1958, P.606)

“Social behavior is an exchange of goods, material goods but also non-material ones, such as the symbols of approval or prestige. Persons that give much to others try to get much from them, and persons that get much from others are under pressure to give much to them. This process of influence tends to work out at equilibrium to a balance in the exchanges. For a person in an exchange, what he gives may be a cost to him, just as what he gets may be a reward, and his behavior changes less as the difference of the two, profit, tends to a maximum.”

This interaction between two actors (people, firms etc.) results in various contingencies, where the actors modify their resources to each others expectations. Power is the mechanics that can explain the relation of the actors (Emerson, 1962 and Blau, 1964). According to Emerson (1962), power is the property of a relation and not of an actor, because it “resides implicitly in the other’s dependency.” (P.32).

Where “dependence of A upon Bj (DABJ) is a joint function, (1) varying directly with the value to A of the resources received from B and (2) varying inversely with comparison level for alternative exchange relations.” (Emerson and Cook, 1972b: 64). Power results from resource dependency (Emerson, 1962) in a dyadic relation but in a network exchange model, it is also derived from the structure (Cook,1977) - structural power. Here, power of A over B (PAB) in any relation Ax; By is the ability of A to decrease the exchange ratio, x/y (Emerson and Cook,1974, P. 25).

To conclude, social exchange theory is best understood as a framework for explicating movement of resources, in imperfect market conditions, between dyads or a network via a social process (Emerson, 1987).

Diagram/schematic of theory


(Figure source: Cook, 1977) In the above diagram, the letters represents actors and the arrows depict the movement of resources. The arrow head points to the sourcing actors with the ends at the source actors. Here, B1 and B2 represent alternative exchange relations.

Originating author(s)
George Homans (1958)

Seminal articles
Homans,G.C.1958. Social Behavior as Exchange. American Journal of Sociology, 63 (6): 597-606.

Emerson, R. 1962.Power-Dependence Relations. American Sociological Review, 27(1): 31-41.

Blau,P.1964. Exchange and Power in Social Life. New York: Wiley.

Levine,S. and White,P. 1961.Exchange as a Conceptual Framework for the Study of Interorganizational Relationships. Administrative Science Quarterly 5(4): 583-601.

Cook.K.S. 1977.Exchange and Power in Networks of Interorganizational Relations. The Sociological Quarterly 18 (Winter 1977): 62-82.

Originating area
Economics, Psychology and Sociology

Level of analysis
Individual, group, and organizational

IS articles that use the theory
Gefen,D. and M. Keil.1998. The impact of developer responsiveness on perceptions of usefulness and ease of use: an extension of the Technology Acceptance Model. ACM SIGMIS Database 29(2): 35-49.

Gefen, D. and C. M., Ridings. 2002. Implementation Team Responsiveness and User Evaluation of Customer Relationship Management: A Quasi-Experimental Design Study of Social Exchange Theory. Journal of Management Information Systems 19(1): 47-69.

Hall, H. 2003. Borrowed theory - Applying exchange theories in information science research. Library and Information Science Research 25(3): 287-306.

Kankanhalli, A., B.C. Y. Tan, and K.K., Wei. 2005. Contributing Knowledge to Electronic Knowledge Repositories: An Empirical Investigation, MIS Quarterly 29(1): 113-143.

Kern, T & Willcocks, LP. 2000. Exploring information technology outsourcing relationships: Theory and practice, Journal of Strategic Information Systems, 9(2000): 321-350.

Lee, JN and YG, Kim.1999. Effect of Partnership Quality on IS Outsourcing Success: Conceptual Framework and Validation, Journal of Management Information Systems, 15(4): 29-61.

Son, JY., S. Narasimhan and F.J. Riggins. 2005. “Effects of Relational Factors and Channel Climate on EDI Usage in the Customer-Supplier Relationship. Journal of Management Information Systems. 22(1): 321-353.

Links from this theory to other theories
Resource dependency theory, Expectation confirmation theory, Economic rational choice theory, Power-Politics theory

Original Contributor(s)
Jijesh Devan Please feel free to make modifications to this site. In order to do so, you must register. Return to Theories Used in IS Research