A Review of Social Exchange Relationship

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INTRODUCTION

The relationship between employees and their organization is often described as an exchange relationship (Mowday, Porter & Steers, 1982). The exchange relationship initially refers to a contractual relationship with the purpose of exchange of interests between two subjects of interests. This contractual relationship might be explicit or tacit. The exchange is a process of organizing and realizing certain interest. Accordingly, in this paper the author defines the exchange relationship of employees and their organization as "a contractual relationship between employees and their organization (i.e., the two parties in a labor relationship) with the purpose of exchange of interests". The contractual relationship of employees and their organization can be explicit (e.g., the labor contract) or tacit (e.g., psychological contract). As researchers use the theory of exchange to explain the relationship between employees and their organization, a popular opinion is that the human behavior under the guidance of principle of exchange is the basis for other human behaviors and social relations, i.e. the purpose of employees paying extra efforts is to get more returns from the organization. The nature is "reciprocity". All exchange relationships, without any exception, include the following four concepts, i.e. the actor, the resource, the structure, and the process. The participant in the exchange is known as the "actor", which can be individual or group. As one actor has the assets or competencies that are valuable for the other party, the physical assets or competencies become "resources". The resources for exchange could be tangible goods and services, or intangible items, e.g. various abilities attached to the actor. The actor tries to get more useful resources that are under the control of the other by means of the exchange process. This exchange relationship stays in a mutual dependent structure. The simplest exchange relationship is consisted of two parties, i.e. A and B. Each party controls the resources that are valuable for the other party. As the two parties in an exchange relationship fall into a larger exchange network, the network can provide more choices for, at least, one party. The actor with more and better choices in an exchange relationship is regarded as the party with "power privilege".

Late 1930s, the academic researchers tried to interpret the exchange relationship of employees and their organization by "input". Banard divided the input of employees into two categories, i.e. special input and common input. The two categories of inputs have the role of incentives. In particular, the special input means to take certain specific subject as the target, whilst the common input means general, instead of individual. The studies of the contents of mutual inputs between employees and their organization are displayed in Figure 1.

SOCIAL EXCHANGE RELATIONSHIP

During the past 20 years, a lot of researches on organizational relationship came out. The theory of social exchange is regarded as a powerful analysis framework to understand the relationship of employees and their organization. It is the dominant conceptual paradigm to understand the behaviors in a working environment (Cropanzano & Mitchell, 2005). The theory of social exchange can be traced back to the 20s in 20th century (Malinowski, 1922; Mauss, 1925). It concerns many academic fields, such as anthropology, social psychology, and sociology. Throughout the development history of social exchange theory, theoretical researchers conclude that social exchange includes a series of interactive behaviors with obligations. According to the theory of social exchange, these interactive behaviors are interdependent and determined by others' behavioral responses (Blau, 1964). The social exchange emphasizes the interdependent transactions with high-quality relationships.

The Basic Principles for Social Exchange

A basic recognition of social exchange relationship is that the social exchange relationship will evolve into the trust, the loyalty, and the mutual commitment overtime. …