Social Exchange Theory: Leader-Member Exchange (SET)

Relationships can be conceptualised in various ways, one perspective follows the notion that virtually all aspects of life can be considered in terms of exchange (Homans, 1961). Social Exchange Theory (SET) (Blau, 1964) proposes that relationships comprise of a series of interactions between two or more parties (Blau, 1964) that generate obligations (Emerson, 1976). This essay will provide an outline of the theoretical perspective concerning SET. The parties involved in exchange relationships include an employee’s supervisors, team, and the organisation itself. Within organisational literature exchange relationships are conceptualised as follows: Leader-Member Exchange (LMX) refers to the exchange relationship between employees’ and their supervisor. Team-Member Exchange (TMX) refers to the exchange relationship between employees’ and their co-workers (Seers, 1989). There is no measure for the quality of an organisation-member exchange relationship; Perceived Organisational Support

LMX proposes that supervisors contribute work opportunities, information and support in exchange for commitment, effort and proactive behaviours from subordinates (Wilson, Sin & Conlon, 2010). A key element of LMX is the notion that supervisors form different relationships with specific subordinates (Dansereau, Graen & Haga, 1975). These relationships vary in quality; the quality of the relationships is proposed to influence attitudes and behaviours at work (Kamdar & Van Dyne, 2007). There is less research investigating poor quality LMX relationships (Cropanzano & Mitchell, 2005), however it is theorised that such relationships are relatively impersonal and consist of economic exchanges (Kamdar & Van Dyne, 2007). In contrast, high quality LMX are characterised by mutual trust, respect and liking (Liden, Wayne & Stilwell,