Democracy Tyranny: A Case Study of Pentia's Social Exchange Relationship and Sensemaking Processes

Abstract

This thesis explores the effects of how the flexible work arrangement, compensation package, and narrative of our case company leads employees to develop commitment towards their employer. In order to conduct the study, Pentia serves as an extreme case that differs in multiple ways from other organisations in the industry and has a proven record of success. The question of investigation is “How does Pentia’s social exchange relationship and sensemaking create interacts that drive commitment?”. The research design consisted of ten semi-structured interviews with employees and management, observations, and secondary data in the form of internally and externally created content. To answer the research question, two theoretical perspectives serve as basis for analysis and are ultimately combined in order to reveal the complex dynamics. The different elements within social exchange theory (Malinowski, 1922a; Mauss 1925; Cook & Emerson, 1978; Foa & Foa, 1980) – which aim at understanding human drivers for the emergence of exchange relationships – is applied to examine the basic building blocks that determine the quality of an employment relationship. Hernes, Hendrup, and Schäffner’s (2015) sensemaking framework serves as a second lens for analysis to understand the impact the case company’s narrative has on the patterns of interacts that form as well as the types of commitment that emerge. The combination of social exchange theory and sensemaking led to the conclusion that at Pentia, the meaningful alignment of strong organisational values with the resources exchanged, as well as the presentation of an ideological narrative with explicit elements of negotiated rules that enforced enactment of its promises, led to strong social exchange relationships and high levels of trust. This in turn allowed for more intimate behavioural management which fostered the emergence of both, strong social and interpretative commitment. The findings of this study suggest that a critical re-evaluation of the role negotiated rules play in employment relationships and the resources of exchange employers should offer and demand, as well as further exploration of alternative forms of narratives could be promising areas for further studies.