Laura Cordova

COMM-2050-401
Instructor: Holly Hansen Huntington

Theory Analysis Paper

Social Exchange Theory

Introduction
For the final paper in Communications 2050, I will be analyzing the Social Exchange
Theory. First, I will provide a definition of the theory and talk about its approaches. Second, I
will provide information that will explain the current status of the theory with any new
modifications that have been made. Third, I will evaluate the theorys strengths and weaknesses
based on the Theory Evaluation Criteria. Last, I will list a couple of ways to make improvements
to the theory.
Theory Definition and Approaches
The Social Exchange Theory, also known as the Theory of Interdependence, states that
people make decisions to continue with an interpersonal relationship or exit one by analyzing the
costs and benefits of the relationship. If an interpersonal relationship no longer serves one or
both parties in the relationship, or doesnt offer any benefits, then one or both sides may choose
to walk away from that relationship.
The Social Exchange Theory perspective argues that people calculate the overall worth of
a particular relationship by subtracting its costs from the rewards it provides. The equation for
the SET is worth = rewards costs. (West & Turner, 2010, pg. 186) The outcome is the end
result of the analysis using the SET theory, which refers to whether a person chooses to stay in or
leave the relationship.
The Social Exchange Theory uses three different exchange structures direct exchange,
generalized exchange, and productive exchange. Direct exchange is when both parties
reciprocate actions, such as returning a favor to each other. Generalized exchange is
reciprocating a favor to another party not the original party, sort of like paying it forward.
Productive exchange is when both parties work together to complete something and get equal
amounts of costs or rewards. The Social Exchange Theory falls under the approach of
empirical/scientific because it predicts the behavior of people in relationships to seek rewards.
Current Theory Status
The Social Exchange Theory can assist with communications in the workplace. A recent
study has shown that it is one of the most influential conceptual paradigms in organizational
behavior. (TinyPulse, 2016) Despite people having bad days at work, they dont just quit their
jobs, the rewards (such as getting paid) outweigh the negative aspects (costs). One example of
the Social Exchange Theory being used in the workplace is when employees work really hard but
arent given recognition, the employee may start to wonder if the work they are doing is worth it.
Many workplaces are now offering employee recognition programs to add benefits to the Social
Exchange Theory equation. Another example is when employees realize they are working in a
Laura Cordova
COMM-2050-401
Instructor: Holly Hansen Huntington

negative setting. Employees who are treated unfairly by coworkers, could eventually end up
hating their jobs which could cause them to quit and seek employment elsewhere. The last
workplace related example I will use is when a customer decides that dealing with a company is
too much of a hassle. When companies hire personnel, who lack customer service skills, it can
greatly affect business. If a company has people that are rude and hard to work with, a customer
may decide that its not worth the time and effort and choose to take their business elsewhere just
to not have to deal with that company all together.
The Social Exchange Theory can also be applied to marital relationships. When costs and
rewards are even, marital couples are more likely to be happier in the relationship. If the costs
outweigh the rewards, marital couples may decide to cheat, separate or divorce. Marital couples
also tend to weigh the costs and benefits of the future, not only the past, and make decisions
based on how they think the relationship should be. When marital couples seek help, also known
as counseling or couples therapy, the Social Exchange Theory is used as the first phase of
treatment and focuses on increasing the positive exchanges between partners.
The Social Exchange Theory has been applied to many areas of interpersonal
relationships. It has roots in economics, psychology and sociology. It is being used in the
workplace, in marital relationships and in various counseling sessions.
Theory Evaluation
The seven criteria for evaluating a theory are scope, logical consistency, parsimony,
utility, testability, heurism and test of time. For this section, I will cover scope, utility, testability,
and heurism of the SET.
Scope covers the boundaries of the theorys explanation. The Social Exchange Theorys
scope is said to be too narrow. It cannot be applied to cultures where collectivism is more valued
and practiced than individualism. This theory focuses on the gains and losses of an individual,
not of a group.
Utility refers to a theorys usefulness in teaching us about communication and behaviors.
Scholars of organizational communication and marketing find the Social Exchange perspective
very useful. (West & Turner, 2010, pg. 199) It has been used to explain the process of strategic
alliances among corporations and to examine consumer loyalty. Other researchers have not been
fully convinced of the theorys usefulness, they question if people really calculate the costs and
benefits of a relationship to decide if they should continue with the relationship or not.
Testability is the next criteria that I will cover. Testability is used to determine if a theory
can be proven false. Since the main concepts of the theory, costs and rewards, are not able to be
clearly defined, it makes the theory untestable. There has been some work done to help with this
issue of clearly defining rewards, where a list of some has been created.
Heurism is the last evaluation criteria I will cover for the Social Exchange Theory.
Heurism refers to the amount of research and new thinking that is stimulated by the theory. (West
Laura Cordova
COMM-2050-401
Instructor: Holly Hansen Huntington

& Turner, 2010, pg. 70) The Social Exchange Theory has roots in economics, sociology and
psychology. It has been used in many different communication settings such as marital
relationships, counseling, the workplace, customer to business dealings, and many other
interpersonal relationships.
Improvements to the theory
The biggest improvement that I could think of to make to the theory is regarding its
testability. Researchers from each field that use the Social Exchange Theory should focus on
defining rewards and costs, and closely evaluate the behaviors associated with the items listed to
provide future references for others in the same fields. A way to expand on the theory would be
to input a section relative to groups so as to not focus on an individual which could widen the use
by other cultures as we as for use in group settings by cultures that already use the theory.
Conclusion
The Social Exchange Theory, also known as the Theory of Interdependence, states people
analyze interpersonal relationships based off costs and rewards. The equation for this analysis is
worth = rewards costs. The SET can be applied to relationships in the workplace, business to
business communications, and marital relationships. The SET does have a couple of negative
setbacks such as it is described as having a narrow scope. It focuses on individualism and cannot
be used in cultures where collectivism is more highly valued. Another negative aspect of the
theory is that it cannot be tested because the main concepts are not clearly defined. On the other
hand, scholars in areas such as psychology, sociology, and economics have found the Social
Exchange Theory very useful and have applied it to many interpersonal relationship
communications.
Laura Cordova
COMM-2050-401
Instructor: Holly Hansen Huntington

References
West, R., & Turner, L. H. (2010). Introducing Communication Theory (4th ed.). New York, NY:
McGraw-Hill.
Cropanzano, R., & Mitchell, M. S. (2005, 12 01). Social Exchange Theory: An Interdisciplinary
Review. Retrieved from Sage Journals:
http://journals.sagepub.com/doi/10.1177/0149206305279602
Son, S. (2016, March 01). How Social Exchange Theory Applies to the Workplace. Retrieved
from TinyPulse: https://www.tinypulse.com/blog/sk-social-exchange-theory-in-the-
workplace
The American Journal of Family Therapy, 36:402412, 2008
ISSN: 0192-6187 print / 1521-0383 online DOI: 10.1080/01926180701647264

Wikimedia Foundation, Inc. (2017, March 19). Social Exchange Theory. Retrieved from
Wikipedia: https://en.wikipedia.org/wiki/Social_exchange_theory