This essay will discuss the theory of social exchange, how it is applied to real-life situations, and criticism of the theory.
Section I – Discussion
The theory of social exchange developed from applying the economic concept of exchange to social relationships. In such, actors trade one commodity for another desired commodity. In the workplace, this exchange may entail reward exchanged for a costly act. An example would be the granting of prestige in return for giving expert assistance (Lovaglia et al 1995).
Once sensitized to it, social exchange can be witnessed everywhere, not restricted to economic relationships, but in friendship and love relationships as well. Children trade toys, neighbors exchange recipes, politicians offer concessions, and so on. The very commonness of social exchanges would make it simple to look at all social conduct in the regard of exchange, but to do so would rob it of its uniqueness. Mankind is mainly motivated by fear: fear of God, fear of other people, or fear of his own conscience, and it is pointless to attempt to force an action into a theoretical framework of social exchange (Blau 1964).
The social exchange context in less advanced societies is actually more ritualized and necessary. According to Mauss, “What they exchange is not exclusively goods and wealth, real and personal property, and things of economic value. They exchange rather courtesies, entertainments, ritual, military assistance, women, children, dances and feasts; and fairs in which the market is but one element and the circulation of wealth but one part of a wide and enduring contact (1954).
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The basis of the concept of social exchange is this: anyone who gives a rewarding service to anther puts him under an obligation. In order to get rid of the obligation, the second individual must provide something of worth to the first individual. If both parties are content with what they receive, they tend to increase their own service in order to encourage the other to increase his response reciprocally, and to stay out of indebtedness. However, as the received assistance escalates, the need for more typically declines.
For example, when technical help is needed in the workplace, five minutes of an expert’s time are very valuable, and five minutes more probably just as valuable, but when the expert has been helping for an hour, another five minutes are less helpful than were the first five. Finally, the decreasing value of additional assistance (benefits) no longer is worth the trouble of getting it, and when this happens for both parties, usually following an adjustment to the exchange ratio, the degree of usefulness of both parties becomes stable.
The social exchange concept can be defined through two separate limiting situations. In the first, a person may give another all his money because the second individual is holding a gun to his head, but while this could be seen as an exchange of money for life, it’s better to remove physical force from the social conduct defined as “exchange”. Also, someone might donate money to a charitable cause because his conscience demands it. This might be considered an exchange of cash for peace of mind, but again, it is better to exclude “conformity with internalized norms (Blau)” from the social exchange concept.
A social exchange takes place if someone gives money to a beggar because he wants the beggar to be grateful, and if he refuses to give a donation to someone who isn’t grateful. As it is defined here, “social exchange” is a voluntary action motivated by the expected return from others. When actions are forced, such as through physical coercion, they are not voluntary, even though agreeing to comply with other forms of authority may be considered voluntary when such compliance results in perceived benefits.
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In the second case, while social exchange does not encompass conforming to internalized standards, there can be instances when conformity to social pressures results in a social exchange. People make donations in the workplace not to garner the appreciation of the intended recipient, whom they will never see, but the gain the approval of their peers who are also in the charitable campaign.
Social exchanges are different from economic exchanges. The biggest difference is that social exchange involves unspecific obligations, whereas economic deals rely on a contractual agreement as to a certain reparation for a specific good or service. Social exchange also involves trust, since an appropriate return for a favor cannot be specified. Therefore, social exchanges create trust in social relations, even though their origins may be purely self-serving.
Section II. Application to Real Life
Social exchange situations are everywhere. To illustrate the concept of diminishing profits from increasing exchanges, for example, the case of a new employee at an established company may be considered.
The employee is taken under the wing of a senior coworker, from whom he receives the senior coworker’s expert knowledge of the internal workings of the company as well as the implicit acceptance as a member of the business.
In exchange he gives the senior his respect and deference, which is a reward for the senior coworker. This feeling of gratification gained from being listened to with respect causes the senior coworker to devote more of his time to the relationship, but his gratification does not increase exponentially is he adds to his mentorship time.
In fact, the longer the senior is with the junior, the less time he will have for other work. Therefore, he will tend to limit his discussion time with the new employee to the level in which the gratification he receives still outweighs the amount of interference it causes in his primary occupation.
The junior, however, may still be experiencing valuable lessons from the conversations, so he now must devise ways to reciprocate other than his gratitude, such as doing odd jobs for the senior coworker, which obligated him further to devote more time to the relationship than he would otherwise.
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Finally, the slight advantages for the junior of continuing the relationship with the senior will no longer outweigh the output required to maintain the relationship and the exchange will level off.
Section III. Critique of Theory
The social exchange theory can be applied in so many different everyday aspects that it would be very easy to misunderstand or misapply the true dynamics. Classic studies such as Homans'(1974), Blau’s (1944, 1964), and Thibout and Kelley (1959) have helped to define and clarify the theory, which is basically an assumption that human actions are motivated by a desire to maximize rewards and minimize costs, with the formula being: Profits = Rewards minus Costs.
This theory is sound and well supported, especially since it specifically parameters the limitations. It could be argued that not everyone performs a function for the sole reason of receiving something back again, but that argument would fall outside the bounds established by the definition.
Social exchange, whether ritualized or not, involves favors that spawn vague future obligations, not precise ones, and that nature of the return is not a subject for bargaining but is left up to the discretion of the recipient. Impressionistic observation indicates that people usually do return social favors, although there is no binding contract to do so, and it is this inherent tendency in the human makeup that validates the theory.
Bibliography:
Blau, P. (1964) Exchange and Power in Social Life Wiley
Lovaglia, M., Skvoretz, J., Willer, D., Markovsky, B. (September 1, 1995) “Negotiated exchanges in social networks” Social Forces Vol. 74, pp 123 © 1995 University of North Carolina Press
Mauss, M. (1954) The Gift Glendoe: Free Press
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