Social Exchange Theory: Trust and Time in Business

Fundacja Dobre Państwo • December 15, 2025 • 🇵🇱 Polski

Introduction

Social Exchange Theory (SET) offers an alternative perspective on business relationships compared to pure economics. It focuses on trust, norms, and time as the foundations of lasting connections. It posits that every interaction is an exchange where partners calculate gains and losses. However, in the long run, building social capital based on loyalty becomes crucial. This article explains how transactions evolve into relationships and outlines the practical implications of this theory for managers.

Social Exchange Theory: The Foundation of Business Relationships

At the core of Social Exchange Theory (SET) is the premise that every interaction is an exchange. As George C. Homans argued, participants aim to maximize benefits and minimize costs. They exchange not only material goods but also intangible ones, such as recognition or support. Peter Blau added that social exchange is based on the expectation of future rewards, and trust is a result of positive experiences.

Two indicators explain the dynamics of satisfaction. The Comparison Level (CL) is the expected standard of benefits, and exceeding it leads to satisfaction. Conversely, the Comparison Level for Alternatives (CLalt) is the profitability threshold – if better options are available, the relationship may be terminated.

Time, Trust, and Norms: Pillars of Collaboration

Time is a crucial catalyst that transforms one-off transactions into lasting relationships. It allows partners to evaluate each other not only through the lens of current interactions but also based on shared history and future expectations. In this process, trust emerges, which is not a gift but capital accumulated through experience. Repeated, positive interactions build predictability and enable greater commitment. The foundation of stable collaboration becomes relational norms – unwritten rules of conduct that reduce uncertainty and monitoring costs, making exchange more efficient.

From Theory to Practice: Models and Guidance for Managers

Relationship development models illustrate this dynamic. Dwyer, Schurr, and Oh's model describes stages from awareness, through exploration, to commitment. Conversely, Ford and Wilkinson's models indicate that time also carries risks – routinization and opportunism. They emphasize the evolutionary, non-linear nature of these ties. In practice, this theory advises managers to consciously invest in trust during early stages, cultivate relational norms, and periodically review collaborations. Unlike Transaction Cost Theory, which focuses on contracts, SET emphasizes social bonds. It also aligns with Game Theory, where repeated interactions make cooperation a dominant strategy.

Conclusion

In a world of algorithms and automation, does Social Exchange Theory become even more relevant? Amid increasing uncertainty, authentic relationships built on trust and mutual recognition can constitute the most valuable capital. Future success may belong to organizations capable of building not only efficient but also ethical connections. Values extending beyond a cold calculation of profits and losses become a key competitive advantage in an uncertain world.

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Summary

Social exchange theory (SET) is a fundamental concept that has been successfully adapted from sociology and psychology to the analysis of business relationships. This article explores how SET shapes trust and time management in interorganizational contexts, emphasizing their role in building lasting bonds. It discusses the theory's key assumptions, its evolution, and the importance of relational norms as social capital, which reduces uncertainty and enhances the stability of collaboration. It also presents models of relationship development and practical guidance for managers on consciously investing in trust and long-term perspectives. Challenges and threats, such as opportunism and routinization, which can weaken even the strongest relationships, are also addressed, emphasizing the need for flexibility and regular review. The aim is to understand the mechanisms for creating valuable partnerships and minimizing risk in a dynamic business environment.

Frequently Asked Questions

What is Social Exchange Theory (SET) and where does it apply?

Social Exchange Theory (SET) assumes that every interaction is a form of exchange of goods, where participants calculate gains and losses. It is used to explain interpersonal relationships and, importantly in this article, to analyze the complex mechanisms of bonding in interorganizational relationships in business.

What role does time play in building trust in business relationships?

Time is a key catalyst that transforms transactions into social relationships. Through repeated positive experiences, time allows partners to test credibility, accumulate trust, and gradually expand the scale of mutual investment, distinguishing short-term exchange from relational exchange.

Why are relational norms so important in long-term business relationships?

Relational norms are informal codes of conduct that reduce uncertainty and stabilize the framework of cooperation. They free partners from the need to constantly refer to formal contracts, making exchanges cheaper, more efficient, and less conflict-prone, while also strengthening trust.

What are the key practical lessons for businesses from Social Exchange Theory?

Companies should consciously invest in building trust through positive experiences, consistently strengthen relational norms, and adopt a long-term perspective, accepting short-term costs for long-term benefits. It's also important to view relationships holistically, taking into account social benefits.

What threats can arise in long-term business relationships according to Social Exchange Theory?

Long-term relationships, while building trust, can lead to routines and institutionalization, which in turn reduces flexibility and increases the risk of opportunism. Periodic reviews of the collaboration are essential to prevent exploitation of advantage and loss of commitment, while maintaining the dynamics and freshness of the relationship.