Question

Effective communication among teams is often understood within the framework of social exchange theory. Describe this theory, and list two key characteristics in a social exchange interaction.

Answer 1

• Social exchange theory is a model for interpreting society as a series of interactions between people that are based on estimates of rewards and punishments. According to this view, our interactions are determined by the rewards or punishments that we expect to receive from others, which we evaluate using a cost-benefit analysis model (whether consciously or subconsciously).
• Central to the social exchange theory is the idea that an interaction that elicits approval from another person is more likely to be repeated than an interaction that elicits disapproval.
• We can thus predict whether a particular interaction will be repeated by calculating the degree of reward (approval) or punishment (disapproval) resulting from the interaction. If the reward for an interaction exceeds the punishment, then the interaction is likely to occur or continue.
  
• People are rational and calculate the best possible means to compete in rewarding situations. The same is true of punishment avoidance situations.
• People who are involved in the interaction are rationally seeking to maximize their profits.
• According to the understanding that is introduced by social exchange theory, people are fundamentally social animals. People orient themselves to the world through the relationships they have, and depend on social interaction.
• The extent to which employees will be satisfied in a workplace and wish to continue working at a company will be predicated to a large extent on the kinds of relationships they form. Fostering positive relationships is crucial to employee retention.
• Social exchange theory also posits the importance of maintaining a friendly atmosphere in a workplace. If people feel that an environment will be hostile to them in any way, it gives them much less of an incentive to be engaging and seek out relationships.
• The motivation that people have for seeking out relationships is directly proportional to the extent to which they feel they will be positively received, so they can receive various benefits.