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Social Exchange Theory

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  1. Social Exchange Theory Presented by: Seyedreza Mousavi February 2012

  2. Rational Choice Theory • Rational decision making entails choosing an action given one's preferences, the actions one could take, and expectations about the outcomes of those actions. Reward Action Utility Cost

  3. Preferences • Strict Preference • Weak preference • Indifference

  4. Assumptions of RCT • Rationality (more is better than less) • All the costs are external • Completeness • Transitivity • Perfect information • An individual has the cognitive ability and time to weigh every choice against every other choice.

  5. Operant Conditioning • Reinforcement • Positive reinforcement • Negative reinforcement • Punishment • Positive punishment • Negative punishment • Extinction • Satiation

  6. George C. Homans Social Exchange Theory

  7. Key Concepts • Resources • Money, love, status, information, good, and service • Rewards • Received resources • Costs • Spent resources • Value • Value = Rewards – Costs

  8. Key Concepts • Principle of Satiation • Loosing value due to increased availability • Principle of Deprivation • Increasing value due to decreased availability

  9. Key Concepts • Comparison Level (CL) • Societal norms, past experiences, observations • Satisfaction = Value - CL

  10. Key Concepts • Comparison Level of Alternatives • Evolving Subjective Individual Standard

  11. Propositions • Value> CL > Clalt = Satisfying and stable • Value> CLalt > CL = Satisfying and stable • CLalt > CL > Value= Unsatisfying and unstable • CLalt > Value> CL = Satisfying and unstable • CL > CLalt > Value= Unsatisfying and unstable • CL > Value> Clalt = Unsatisfying and stable

  12. SET Principals • Reciprocity • The concept of interdependence • Power • Greatest Resources • Control over punishment and reward • Least Interested • Distributive Justice • Equity • Both individuals derive similar levels of rewards • Trust

  13. SET Principals • Commitment • Social and Intimate Exchanges • Normative Orientations • Societal/ Cultural views on appropriateness of behavior in relationships

  14. Assumptions • Individuals seek rewards and avoid punishments. • Rationality assumption of rational choice theory holds the idea that parties “calculate the best possible means to compete in rewarding situations.” • Information access • Parties involved in the interaction are goal-oriented. • Individuals’ standards used to evaluate the value can differ from person to person and can change over time. • Repetition of the exchanges creates patterns of social interactions that develop social structures and lead to power differentiations.

  15. Criticisms • Assumes humans act rationally when deciding on an exchange • Some issues are difficult to explain effectively utilizing exchange theory such as altruism • Limited to dyadicrelationships

  16. Individualistic VS. Collectivistic Two approaches toward SET

  17. Individualistic • Homans and Emerson • The relational aspect is individualistic

  18. Collectivistic • Malinowski, Levi-Strauss, and Ekeh • The relational aspect is collectivistic

  19. IS Relevance • Complex IT adoption • IT Outsourcing