Social exchange theory of entrepreneurship

Social exchange theory regards trading relations as built on norms of reciprocity and mutual attraction (Emerson, 1981; De Clercq et al., 2010). Reciprocity is the exchange of privileges between parties on the basis of mutual trust. For instance, a lunch or round of drinks may be purchased by one individual, with the understanding that other will pay back the debt at some unspecified time. In extended reciprocity, the assumption is that the environment will pay it forward to ensure repayment, even if indirectly over time.

Mutual attraction implies that one party is not predating on the other, that both parties that have something to gain. There is therefore an assumption of trust between the parties.

There seems to be some budding evidence that the mechanisms that allow social exchanges to occur matter considerably. Overall, the advice coming from this stream of research is that we should probably give each other the benefit of the doubt. In contrast to other theories about entrepreneurship, such as psychological theories that suggest that individuals are the key units of measure in entrepreneurship, the social exchange perspective offers that:
  • Successful entrepreneurs nurture the processes of social exchange with their stakeholders
  • Individual characteristics may matter most as antecedents of social exchange processes
  • Social exchange processes need continual care to keep them flowing efficiently

Other sociological theories that may interest you:


Sources:

De Clercq, D., Dimov, D., & Thongpapanl, N. T. (2010). The moderating impact of internal social exchange processes on the entrepreneurial orientation–performance relationship. Journal of business venturing, 25(1), 87-103.

Emerson, R. M.(1981). Social exchange theory. Social psychology: sociological perspectives. New York: Basic Books.


Video primer on social exchange theory:


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