Knowledge that Transforms

We propose that employer-employee exchanges can be characterized by four contradictory types of normative expectations for the appropriate distribution of rewards: profit maximization, equity, equality, need. We expand on Williamson's (1975) argument that intrafirm transactions are characterized by normative expectations different from those in marketplace transactions and find that his characterization of employer-employee transactions is similar to recent social psychological characterizations of "intimate" relationships. The possible presence of four distinct norms is suggested to be the basis for some types of allocation disagreements within organizations and has implications for management research in organizational climate, socialization, and compensation.