Social Exchange Theory and Example in Real World.pptx

�SOCIAL EXCHANGE THEORY��Management and Organization Theory, Chapter 33 - Miles, J.A. (2012)

1. SOCIAL EXCHANGE THEORY Management and Organization Theory, Chapter 33 - Miles, J.A. (2012) Sharfuddin Chowdhury MBBS, FCS(SA), FACS, MMed , PhD, DSc (2 nd yr) October 7, 2025

2. Introduction Social Exchange Theory (SET) explores relationships as transactions . Based on cost-benefit analysis , individuals seek to maximize rewards and minimize costs. Key premise: Social interactions are reciprocal . Importance for management: Explains employee motivation, commitment, and cooperation .

3. Historical Background Developed from sociology and psychology. Roots in economic principles of rational choice. Peter Blau (1964) – broader organizational applications. George Homans (1961) – behavior as an exchange of rewards.

4. Core Concepts of Social Exchange Theory Rewards – benefits from interaction (e.g., recognition, support). Costs – sacrifices or negative outcomes (e.g., time, effort). Reciprocity – the expectation that positive actions will b e returned. Comparison Level – benchmark for what individuals expect in a relationship. Equity & Justice – perceived fairness is critical for sustained relationships.

5. Basic Assumptions People are rational and seek to maximize rewards . Social relationships are interdependent . Behavior is contingent upon past interactions and expectations. Mutual benefit is essential for long-term relational stability.

6. Types of Exchange Economic Exchange – short-term, explicit, contractual. Social Exchange – long-term, trust-based, implicit. Example: Mentoring programs rely on social exchange , not contractual obligation.

7. Social Exchange in Organizations Employee-Organization relationship is a social exchange : Organization provides: salary, benefits, support. Employee provides: loyalty, effort, performance. Strong reciprocity leads to: Increased job satisfaction Higher organizational commitment Reduced turnover

8. Factors Affecting Social Exchange Trust: Reliability of the other party. Power & Dependence: Unequal dependence can strain exchange. Cultural Norms: Influence expectations of reciprocity. Perceived Fairness: Imbalances reduce satisfaction and cooperation.

9. UTILITY FOR THE HEALTHCARE LEADERS Employee Motivation: Recognition and rewards maintain engagement. Leadership: Leaders can build trust through reciprocal behavior. Team Dynamics: Collaboration improves when members perceive fairness. Conflict Resolution: Understanding exchange imbalances helps manage disputes.

10. EXAMPLE IN HEALTHCARE Scenario: In the emergency department, trauma cases require quick coordination of nurses, surgeons, anesthetists, and support staff. Nurses often take on extra shifts or responsibilities during busy trauma admissions. Application of SET: If nurses feel their extra efforts are recognized (e.g., verbal appreciation, schedule flexibility, professional growth opportunities), they are more willing to keep supporting the trauma team during critical shortages. If perceived costs outweigh benefits (e.g., burnout, lack of recognition, unfair workload), trust declines, and staff morale drops. Reciprocity boosts collaboration—for example, when surgeons acknowledge nursing contributions, teamwork and efficiency improve.

11. Critiques and Limitations Overemphasis on rationality – ignores emotions and altruism. Difficult to quantify rewards and costs in complex relationships. Assumes reciprocity , but not all social behavior is transactional.

12. Summary Social Exchange Theory explains interpersonal and organizational behavior . Focus on mutual benefit, fairness, and reciprocity . Provides a framework for enhancing workplace relationships . Still relevant for modern management practices , HR strategies, and leadership.

13. Application of Theory to the situation Erica DeBoer

14. APPLICATION Resource exchange can be economic, social, or both Most rewarding outcomes in social exchange theory do not need to have material value Reciprocity Individualistic Consider a member of the health plan and wellness program Collectivistic Social drivers of health and removing barriers to care

15. Thank You