Scientific review of the Social Exchange Theory and its contribution to solving purchasers’ decision making issues

Abstract

The objective of this thesis is to analyze the contribution of the Social Exchange Theory (SET) to purchasers’ decision making issues. The SET is a very influential theory having its roots centuries ago. It follows the premise that humans strive for a positive outcome, meaning to maximize benefits and minimize costs when engaging in an exchange. As only little research was done on the influence of the SET on Supply Chain Management (SCM), this thesis focuses on this specific field in order to identify a useful application to support purchasers in their decision making processes. The analysis was implemented using a literature review, to analyze four decision points which a purchaser has to make. Those decision points include demand planning, category strategy, supplier strategy and awarding. The result is that the SET is specifically applicable when deciding on supplier strategy. Here the Social Exchange Theory suggests that establishing a long-term relationship through increased trust and commitment, which are major variables within the theory, will outweigh the costs of supplier management. Hence the SET is a valuable instrument for purchasers in order to improve the buyer-supplier relationship and as a result increase the performance of the own organization.

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