Social exchange theory is a social psychological and sociological perspective that explains social change and stability as a process of negotiated exchanges between parties.An example of social exchange theory can be seen in the interaction of asking someone out on a date. If the person says yes, you have gained a reward and are likely to repeat the interaction by asking that person out again or asking someone else out. On the other hand, if you ask someone out on a date and they reply with “No way you creep!” then you have received a punishment that will probably cause you to shy away from repeating this type of interaction in the future. Cost-benefit analysis is the process that we implement in decision-making. We analyze the pros and the cons of an action to determine what we would believe to be the best decision and then make that decision based off of what we believe would be the outcome. An example would be a child reaching up to the counter to grab a cookie that their parent just baked for dessert. That child would have no hesitation in grabbing a cookie from the counter if they had never done it before and would, therefore, have no reason to believe that there could be a negative outcome from that decision. On the other hand, if a child had once done so before and got his hand popped by a parent and told that they need to wait until they are given permission then the child would associate that negative outcome to grabbing another cookie and would then form a decision, based off of that outcome, before attempting that action again; Basically figuring out if the reward would outweigh the cost for doing so. Distributive justice concerns the nature of a socially just allocation of goods in a society. A society in which incidental inequalities in outcome do not arise would be considered a society guided by the principles of distributive justice. The concept includes the available quantities of goods, the process by which goods are to be distributed, and the resulting allocation of the goods to the members of the society. If there is no balance in how goods are distributed within a society, that lack of balance can ultimately breed societal unrest. The example I will use will be one I witnessed as a Law Enforcement Officer. As a Patrol Officer we were issued a Standard of uniforms and equipment that was, of course, functional but not exactly what anyone would really consider comfortable. Furthermore, our weapons systems that we were issued were standard as well. Our special enforcement teams such as the Tactical Special Enforcement Teams were all issued the more comfortable uniforms and equipment and their weapons systems were highly customized making them far more accurate and much easier to engage a target with. The list goes on; they were also issued the nicer patrol vehicles that had a far better pursuit rating for chases. Patrol Officers basically got the hand-me-downs from them. We generally felt that we were being treated unfairly because those special teams were, in fact, so “specialized” in their enforcement that regular patrol officers were doing most of the Law enforcement where they did very little that would even justify them having all of this special equipment to begin with. This

situation led to a lot of resentment over the favoritism and a general dislike for the “prime donne” attitude within our special teams. To rectify the issue, our department formed a committee to research the effectiveness of that special team and a cost analysis of the logistics for that team. The committee determined that based off of the team’s statistics, as they pertained to their effectiveness, played to no benefit to the department as a whole. The team was shortly after disbanded with their personnel being absorbed back into regular patrol duties and the equipment was reissued to more effective and deserving teams that could best make use of it. That research and analysis restored balance to that conflict and made for a much better work environment.

PETER BLAU

A stable social relationship requires that individuals make some investments to bring it into being and maintain it in existence, and it is to the advantage of each party to have the other or others assume a disproportionate share of the commitments that secure their continuing association. Hence the common interest of individuals in sustaining a relation between them tends to be accompanied by conflicting interests as to whose investment should contribute most to its sustenance.
—Peter M. Blau

Peter Michael Blau (February 7, 1918 – March 12, 2002) was an American sociologist and theorist. Born in Vienna, Austria, he immigrated to the United States in 1939. He received his PhD at Columbia University in 1952, and was an instructor at Wayne State University in Detroit, Michigan from 1949–1951, before moving on to teach at the University of Chicago from 1953 to 1970. In 1970 he returned to Columbia University, where he continued to teach until 1988. From 1988 to 2000 he taught as an emeritus professor at University of North Carolina, Chapel Hill in the same department as his wife, Judith Blau. His sociological specialty was in organizational and social structures, in particular bureaucracy. He produced theories relating to many aspects of social phenomena, including upward mobility, occupational opportunity, heterogeneity, and how population structures [disambiguation needed] can influence human behavior. One of Blau's most important contributions to social theory is his work regarding exchange theory, explaining how small-scale social exchange directly relates to social structures at a societal level. He also was the first to map out the wide variety of social forces, dubbed “Blau Space” by Miller McPherson. Blau-space is still used as a guide by sociologists and has been expanded to include areas of sociology Blau himself never specifically covered. In 1974 Blau served as president of the American Sociological Association. After researching a few examples of social exchange theory and more specifically cost-benefit analysis and distributive justice I was able to apply them to examples in my own life and could relate completely. What interested me the most is my realization of how beneficial it will be, from a managerial aspect, how I could use these cause and effect relationships within the social exchange theory to optimize a workplace environment. After all, a well-balanced work environment is a more productive one.

Sources: http://en.wikipedia.org/wiki/Peter_Blau http://www.sagepub.com/upm-data/38627_4.pdf http://sociology.about.com/od/Sociological-Theory/a/social-exchange-theory.htm http://en.wikipedia.org/wiki/Distributive_justice