Communication is critical to the success of teamwork in any organization. Organizations, on the other hand, must implement Social Exchange Theory in order to enhance effective communication and interpersonal relations. This theory presents a sociological viewpoint in which two components work together to establish mutual understanding through cost-benefit analysis. As a result, the interactive trade must take place between two individuals or parties who profit equally or in accordance with the agreement.
This was chosen because it can help to improve the interaction between an organization's management and its personnel. First, the theory is based on the assumption that all interacting individuals seek to earn high profits. For example, an organization can agree to increases employees’ salaries and benefits. In return, employees will be obliged to improve their productivity and profitability. The second assumption is that interaction occurs in a system that promotes free and fair competition. Therefore, when applied to an organization, it would be impossible for the management to break the covenant or benefit more than the employees. Third, the theory assumes that social norms or culture regulates social exchange. Apparently, organizations have to develop an inclusive culture that also considers employees’ welfare before implementing the social exchange. It will be easy for employees to accept a mutual relationship with an organization if its culture focuses on promoting their value and satisfying their needs. The final assumption is that social exchange involves a high level of trust, which can further strengthen the relationship. It will be easy for the employees in any organization to trust that the top leadership will implement all the necessary changes according to the agreement. On the other hand, the organizations will ensure that it works according to the agreement to maintain its trust and gain employees’ loyalty.
Cook, K. S., Cheshire, C., Rice, E. R., & Nakagawa, S. (2013). Social exchange theory. In Handbook of social psychology (pp. 61-88). Springer Netherlands.
This article discusses social exchange theory and how it applies to organizational performance. The authors provide a detailed description of the theory, how Holmer developed it and how the theory has transformed social behavior among individuals, groups or even organizations. According to Cook, Cheshire, Rice, & Nakagawa (2013), indicate that social exchange theory depends on the culture and behaviors of an organization. The article emphasizes on how the application of the theory of leadership can help in inducing positive changes within an organization. For instance, exchange relationships affect the distribution of power, hence even sharing of rewards between the management and employees (Cook, Cheshire, Rice, & Nakagawa, 2013). This article is beneficial because it offers a detailed understanding of the theory, its assumptions and numerous applications in organizational leadership. It is important to note that the authors demonstrate a clear understanding of the theory and articulate their ideas correctly, thereby making it easy to understand the information.
Herman, H. M., Huang, X., & Lam, W. (2013). Why does transformational leadership matter for employee turnover? A multi-foci social exchange perspective. The Leadership Quarterly, 24(5), 763-776.
The authors describe the social exchange between leaders and employees. The article focuses on Leader – Member Exchange as the common social exchange process in organizations. This study is an experimental design that involves 490 employees from a telecommunication’s company call center. By conducting research, the authors identify the relationship between transformation leadership and social exchange theory. From the findings, transformational leadership promotes social interaction between employees and an organization. The social exchange theory explains why transformational leaders have a significant influence on employees and can pull them towards any direction. According to Herman, Huang, and Lam (2013), transformational leaders can create short term and long term reciprocal relationships with employees. This means that a leader can establish a specific obligation for employees or team members. In return, employees receive favors or benefits that mostly involve tangible materials, money, and promotions. By applying the social exchange theory, transformational leaders attract workers physically and emotionally to the organization. Therefore, it is easy to retain them for long. This article is useful because it has relevant information on how the social exchange is part of the transformational leadership that promotes organization’s performance.
Jia, L., Shaw, J. D., Tsui, A. S., & Park, T. Y. (2014). A social–structural perspective on employee–organization relationships and team creativity. Academy of Management Journal, 57(3), 869-891.
In this article, Jia, Shaw, Tsui & Park (2014) explain how the social exchange theory affects the relationship between employees and their organizations. The study begins by identifying different types of relationships existing at the workplace. Then, the authors discuss the impact of social exchange theory on the creativity of different teams. Unlike employee – organization relationships, Jia et al. (2014) assert that social exchange promotes sharing of information, skills, and knowledge among team members. Hence, the theory contributes to a high productivity of team members, who also gain by acquiring more skills, early completion of individual tasks and subsequent promotions. The authors use an experimental design to collect adequate information on how social exchange promotes a working relationship between organization and employees or employee-employee interactions. This study helps to understand how social exchange theory promotes communication and work relationships in organizations.
References
Cook, K. S., Cheshire, C., Rice, E. R., & Nakagawa, S. (2013). Social exchange theory. In Handbook of social psychology (pp. 61-88). Springer Netherlands.
Herman, H. M., Huang, X., & Lam, W. (2013). Why does transformational leadership matter for employee turnover? A multi-foci social exchange perspective. The Leadership Quarterly, 24(5), 763-776.
Jia, L., Shaw, J. D., Tsui, A. S., & Park, T. Y. (2014). A social–structural perspective on employee–organization relationships and team creativity. Academy of Management Journal, 57(3), 869-891.
