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Social Exchange Theory

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The behavior of individuals in different social set ups such as work places is known as social
exchange theory. It is a theory that shows the drive to enter relationships among individuals. It
this, it offers the benefits of driving forces in many relationships. Individuals must always
discover the benefits that come with the relationships before indulging in them (Chadwick-Jones
& John 38).
Besides the challenges that come with such relationships, major ones include costs while benefits
on the other hand are known as rewards. The theory therefore shows that the two components
must be considered. It also demands that clear comparison should be carried out to identify short
and long term benefits of undertaking a given action. This should also be compared closely to the
costs incurred in the entire process.
If costs outweigh given benefits, the action should them be omitted. The exchange theory has
therefore been practiced in many marital relationships. Partners often seek to get the benefits in
many social relationships they engage in. this is a factor that initiated a wide range of
frameworks governing rewards that parties gain in the relationships.
The theory is also widespread and it has been adopted in the management of many organizations
when it comes to making of vital decisions. It has also helped in determining the credibility of

different investment decisions that are undertaken. Even so, the theories can result in different
actions by different individuals across different societies.
Reward measurements also differ from one individual to the other. Additionally, costs incurred
in the activities adopted also vary in magnitude among different people. Those who are prone to
the risks often engage in risky engagements because they focus more on the outcomes. This is
contrary to those who are averse of risks and avoid taking risky engagements because of
unforeseen effects.
This paper will take a look at social exchange theory and more specifically, how it affects the
behaviors that people undertake. The theory has assumptions relating to activities adopted. It
orates that humans will aim at maximizing on profit in all situations and in a given undertaking.
Additionally, it elucidates that a person who is rational will strive to eliminate any action that
will affect his or her status.
The assumption is very clear in business world where investments are carried out based on the
proceeds that will be realized. Projections must also be carefully done before engaging in any
commercial activity to ensure the rewards expected will be more compared to the involved
expenses. Therefore, the parties involved in any form of agreement will always endeavor to
maximize on the benefits of the relationship.
It is also a factor that has led to creation of many agreements where the benefits are mutually
shared to achieve satisfaction. Secondly, the theory dons that people are often oriented and will
act their best to achieve set goals. The set goals are also believed to offer direct benefits to
individuals thus, the emphasis placed on goal fulfillment.
In connection with organizational or set goals, there are statutes that will be enacted to direct the
actions of individuals towards the desired course. The set goals will also determine whether to
enter into given agreements or not as they try to control individual or group rewards. The
exchange programs also occur within a cultural set up in a society.
This means that beliefs and norms of given people play a very crucial role in determining the
decisions made or agreed on. In this respect for societal norms, it is also ensured in profit
maximization. From foregoing, it becomes very evident that the theory is imperative in ensuring
efficiency in social relationships.
Relating to the theory is therefore considered an incredible experience of realized failure owing
to misunderstandings on the need to consider the benefits as well as the costs before undertaking
any activity. The experience also relates to work based relationships among new interns and
employers within an organization (Blau 30).
Before assuming any roles in an organization, the management and individuals enter into given
terms and conditions that will ensure employees work efficiently and that the management offers
good remunerations. For efficiency and set goals to be achieved in the entered agreements,
mutual offers should also be made to allow rewards to exceed costs to be incurred by the
employer and employees.

Flurry of what is vested upon them while remunerations do not often reflect appreciations for
their services. Besides, many interns often work in poor conditions that result into constraints
that prevent them from achieving goals set by an organization. Failure to make considerations on
factors when entering in any job agreement has contributed a great deal to high costs and losses
incurred by employees.
The situation was very prominent in the 19th century across many sectors before the era of social
awakening, the 20th century. Therefore, this, demands for social exchange theory to be adopted
by employers in different employment sectors. The rewards expected should also be stated
clearly in comparison with sacrifices that will be made in an agreement. Poor working conditions
for example contributes to high costs incurred therefore, they should be minimized to achieve
effective social exchange.
The benefits of both parties in a given agreement should also be considered. In the exchange of
services offered by interns, there should be motivations offered by employers as rewards. Better
payment is no doubt a key motivator in the employment sector. Similarly, promotions should be
offered to interns as this will help in ensuring that both the employer and employee enjoy
rewards accrued and promote mutual and good relationship (Blau 40).
Owing to the nature of those who maximize profits, objectives should be set clearly to control
the actions of employees and employers. The social exchange theory has been greatly practiced
in business field and more specifically in the marketing department. Based on the nature of
individuals to maximize on profits, business persons have strived to reap bountifully from their
businesses despite the welfare of their clients.
The quality of different commodities has also been compromised in many situations as business
men try to increase their profit margins. Even so, with the introduction of social exchange theory,
business persons have been integrated slowly for the welfare of their consumers especially when
it comes to product development.
The theory also demands that relationships of consumers and producers should be bridged
through quality service and product delivery to meet the needs of clients. In the production and
delivery of products, firms should also consider costs incurred so as to protect them against
expected returns. Central to given advancements are also the image of the market and consumer
welfare and in exchange, the rewards given to producers should be prompt payments.
From the discussion, it is evident that if practiced properly, social exchange theory can result into
harmony and efficacy in different relationships and sectors. The impact of the model is also
manifested in business world. In investment plans, the model plays a crucial role in decision
making. The projected rewards that are expected from an investment plan should also outweigh
project related costs. This will also reduce any possibility of realizing losses in the undertaken
projects. Through the outlined objectives, project rewards will also be achieved easily.
Additionally, the model allows for cordial relationships between esteemed clients and their firms.
Mutual relationships will also help to increase the efficiency of product and service delivery
despite enhancing the welfare of involved parties. Secondly, the theory is depicted to be very

important in the business environment. Before considering job placements in different

organizations, individuals should also compare returns against possible constraints.
In the event where the costs to be realized surpass the expected rewards, the opportunity should
be ignored and better placement opportunities should be settled for (Blau 36). Leaderships in the
organizations should also ensure that appropriate measures are employed to enhance
relationships where all parties gain mutually in the organization.
The satisfaction of different people within the workplace should also be a major concern in all
operations carried out in an organization. In marriages, the social exchange model has played a
crucial role in promoting holistic advancements of all involved parties as the interests of different
individuals are put into consideration.

Works cited
Blau, Peter M. Exchange, and Power in Sociallife. N.Y: Wiley, 1964. Print
Chadwick-Jones, John K. Social Exchange Theory. 1976. Print.

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