What relevance does Social Exchange Theory have to Corporate Social Responsibility?

Social Exchange Theory is a complex theory that describes how people interact and relate with others in economic and social settings. Simplified, the theory states that people make choices based on their perception of the cost and reward of each interaction in which they are involved.

Social Corporate Responsibility is the idea that companies should not simply exploit resources and labor to maximize their profits; instead, they should actively take a role in promoting and...

Social Exchange Theory is a complex theory that describes how people interact and relate with others in economic and social settings. Simplified, the theory states that people make choices based on their perception of the cost and reward of each interaction in which they are involved.

Social Corporate Responsibility is the idea that companies should not simply exploit resources and labor to maximize their profits; instead, they should actively take a role in promoting and aiding worthwhile social causes.

How do these two concepts work together? Companies that make an effort to be socially responsible are more likely to value their employees and reward them appropriately. Likewise, according to Social Exchange Theory, employees who receive the reward of good working conditions, pay, benefits, etc. are motivated to invest more effort in their jobs (in this sense, their effort is the "cost" part of the equation).

Many employees also feel a sense of personal satisfaction when working for a company that behaves in a socially responsible manner. Even though this personal satisfaction is not financial, it is still a reward that can help cultivate a positive culture within a business.