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The Blackwell Encyclopedic Dictionary of Organizational Behavior

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Page 170<br />

Fombrun, C., Tichy, N. & Devanna, M. A. (1984). Strategic human resource management. New York:<br />

Wiley.<br />

Hayes, R. H. & Wheelwright, S. C. (1984). Restoring our competitive edge: competing through<br />

manufacturing. New York: Wiley.<br />

Peters, T. & Waterman, R. (1982). In search <strong>of</strong> excellence. New York: Harper & Row.<br />

Porter, M. E. (1980). Competitive strategy. New York: Free Press.<br />

CHARLES FOMBRUM<br />

Exchange Relations<br />

This refers to a theoretical perspective which provides formal analyses <strong>of</strong> interpersonal interactions by<br />

focusing on costs and benefits individuals may receive in their relationships. People's constant<br />

interactions with one another can be conceptualized as a series <strong>of</strong> exchanges, with all parties<br />

contributing and receiving something from their interaction. <strong>The</strong>ir exchange relations can be analyzed<br />

to determine who has POWER over whom, and how much power they have.<br />

Early exchange theorists (Homans, 1961; Thibaut & Kelley, 1961; Blau, 1964) assumed that people<br />

attempt to maximize their own utilities by weighing the potential outcomes <strong>of</strong> their various courses <strong>of</strong><br />

action. Analysis included both sides <strong>of</strong> the exchange, i.e., the costs and benefits <strong>of</strong> both parties. <strong>The</strong><br />

power in an exchange relationship can then be determined by the mutual interdependence <strong>of</strong> the<br />

involved parties. If person X, for instance, depends upon person Y for his/her positive outcomes, and<br />

person Y does not depend on X, then exchange theory would say that Y has considerable power over X<br />

(e.g., Cook & Emerson, 1978).<br />

<strong>Organizational</strong>ly, supervisors may not only control the financial outcomes <strong>of</strong> their employees (termed<br />

"fate control" by Thibaut and Kelley, 1961) but they can also influence employees' behavior ("behavior<br />

control"), by making one and only one set <strong>of</strong> behaviors most rewarding. At the same time, employees<br />

can organize and generate additional alternatives for themselves, and thereby control their employers'<br />

outcomes ("mutual fate control"; see Mechanic, 1962).<br />

file:///C|/downloadnetlibrary/<strong>Blackwell</strong>%20Ency/nlReader.dll@BookID=48684&FileName=Page_170.html (1 <strong>of</strong> 2) [2008-04-01 01:26:12]

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