Academic journal article Management Revue

Social Reciprocity as a Critical Success Factor for Small and Mid-Size Enterprises: Work Relationships as Reflections of Social Exchange Structures **

Academic journal article Management Revue

Social Reciprocity as a Critical Success Factor for Small and Mid-Size Enterprises: Work Relationships as Reflections of Social Exchange Structures **

Article excerpt

1. Problem and method

Small and mid-size enterprises (SMEs) face several challenges: For example, the shortage of skilled workers and demographic change can both have an adverse effect on the formation of internal work relationships. The willingness of employees to contribute to a given SME, to perform to the best of their ability, and especially to commit to a long-term working relationship with their employers may represent yet another major challenge. In relationships between employers and employees, which are all too often characterized by vagueness, both parties have to ensure an advance performance. The willingness to do so is likely to increase with the quality of the social relationship. The empirical study by Baron, Burton, and Hannan (1996) shows that money, love and work are central determinants for good work relationships. This study aimed to show that in SMEs, a functional social community can be of greater importance than monetary incentives and that violations of social reciprocity norms have an adverse effect on work relationships. In this article, we consider how reciprocal exchange relations can be fostered and how and to what extent constructions of social reciprocity contribute to this process. We show that especially establishing social exchange structures significantly improves the quality of work relationships.

In the empirical part of this study, we examine the phenomena under consideration with the help of selected case studies. We propose several assumptions, and these allow us to conduct a focused investigation of complex environments such as those of SMEs while simultaneously providing us with opportunities to consider and integrate connections that have not been regarded to be relevant. The preliminary theoretical considerations provide the framework of the study. In contrast to a "mono-theoretical analysis," which allows only for an interpretation of a given phenomenon in light of theory used, the observation of central mechanisms (Elster, 1989, and fundamentally Bunge, 1967) offers the distinct advantage of providing a more comprehensive explanation of the evidences that are observed.

2. Work relationships in SMEs

As Martin (2006) rightly points out, a work relationship is first and foremost a social relationship. A work relationship is also an exchange relationship. The two parties, employer and employee, do not act entirely altruistically (and in classic economic models, altruism is completely excluded) as they aim to bestow the expected rewards for performances on each other. Working relationships are, however, also characterized by asymmetrical exchange relations. Performances and rewards cannot be precisely located in temporal, spatial or content terms. The interests of employers and employees can, however, be explained by the theory by Bernard (1938), which was further developed by March and Simon (1958). According to Barnard, the situation of an organisation is always precarious and its survival only guaranteed by safeguarding the fragile balance between stimuli and contributions. The evaluation of the stimuluscontribution-relation is based not only on the actual performance of the players but also on the interpretation of the performance and an assessment of the situation. These kinds of assessment may lead to conflict and strain. What is significant for the functionality of the organisation is if, and in what form, the players invest time and ef- fort because they will get something in return, which is supported institutionally. Employees can rest assured that the organization values their contributions. In their study, Martin and Bartscher-Finzer (1998) identify work satisfaction as the goal of this exchange for employees and the commitment of the employees as that of the employers.

The basic conditions for this kind of exchange are not being constantly renegotiated in a work relationship; instead, there are structures that facilitate the process of exchange. …

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