Resource Dependence Theory Flashcards
Which article?
Pfeffer & Salancik (1997)
Focus
To understand behavior of organizations, one must understand how organizations relate to other social actors in their environment
-> Organizations comply with the demands of others, or they act to manage the dependencies that create constraints on organizational actions.
What do organizations need to survive?
Resources
Inclusion is partially
social actors can be part of different organizational structures
Boundary of an organization
the organization’s control over the actions of participants relative to the control of other social entities over these same activities
Control is never absolute
Control is the ability to initiate or terminate actions at one’s discretion
There are always competing claims of others
Sources of control of an organization:
o The ability to empower individuals to act on its behalf;
o The ability to regulate use, access, and allocation of organizationally generated resources.
Power in organizations
Power organizes around critical and scarce resources. To the extent participants furnish resources that are more critical and scarcer, they obtain more control over the organization. Power is, therefore, determined by the definition of social reality created by participants as well as by their control over resources.
Organizations have a social control. There are 8 conditions
- The possession of some resource by the social actor
- The importance of the resource to the focal organization; its criticality for the organization’s
activities and survival - The inability of the focal organization to obtain the resource elsewhere.
- The visibility of the behavior or activity being controlled.
- The social actor’s discretion in the allocation, access, and use of the critical resource.
- The focal organization’s discretion and capability to take the desired action
- The focal organization’s lack of control over resources critical to the social actor
- The ability of the social actor to make its preferences known to the focal organization
How is the environment known to the organization?
The environment is not an objective reality: it is enacted
Process of enactment
Perceptions, attention, and interpretation by organization members come to define the context for the focal organization
Environment in RTD
nvironment is populated by other social actors that possess and control resources
autonomy-dependency dilemma:
- Organizations attempt to avoid influence and constraint by restricting the flow of information about them and their activities, diversifying their dependencies, and manipulating information to increase their own legitimacy.
- At the same time organizations seek to avoid being controlled, they seek stability and certainty in their own resource exchanges.
- On the one hand, organizations want to maximize discretion to modify (future) actions
(autonomy); - On the other hand, organizations need resources owned by other social entities (dependency).
Demands for certainty and the quest for discretion lead to
merger, joint ventures, cooptation, growth, political involvement, the restriction on the distribution of information
How to acquire necessary resources?
The development of interorganizational structures of coordinated behaviour (interorganizational organization)
Ironic result:
to gain some control over the activities of another organization (to acquire resources), the focal organization must surrender some of its own autonomy.
How to cope with Resource dependency
Environment-action Linking organizational environments with organizational actions: Appointing leaders and adopting structured favoured by actors in the environment
Managing resource dependencies:
Buffering
Bridging
Buffering
using resources to protect your core system (technical system, where things are
produced). Organizations want those core systems to be stable. Organizations can make this
stable by having buffers around that system (a buffer around the core technical system).
Bridging
making ties with other actors in your environment. You can lower the dependency
by making these ties. The role of the leader: how the leader can play a role in managing dependencies. It is about the interaction between the leader, the organization, and the environment.
3 managerial role
- symbolic
- responsive
- discretionary
The symbolic role of management
p. 68
The responsive role of management
p. 68
The discretionary role of management
p. 68
How to cope with Resource dependence?
- Scanning the environment
- Loosening dependencies
- Coping with conflicting external demands
Establishing inter-Organizational linkages:
- Ownership (internalization, gain ‘say’, reduce dependency)
- Contracts, joint ventures (through contract you secure the inflow of resources)
- Cooptation, interlocking directorates (business term for: one CEO becomes part of board of
directors of another organization, e.g. Rabobank gets a seat in the management of Philips) - Executive recruitment
- Advertising, public relations
Controlling the Environmental Domain:
- Change of domain
- Political activity, regulation (e.g. trying to influence the EU government through an office in
Brussels, lobbying) - Trade associations
- Illegitimate activities
Assumptions
- Organizations are open systems. By this, there is interaction with the outside world, with other organizations. A long time, people thought that organizations were closed systems.
- Organizations are not self-sufficient. For accomplishing a goals, organizations need resources. Organizations don’t own/control all those recourse (RDT).
- Organizations cannot generate all the necessary resources internally. Organizations don’t have the capacity/ability to produce all those resources.
- Organizations must mobilize resources from other organizations in their environment if they are to survive (Yuchtman & Seashore, 1967). When I, as an organization, can’t have everything and when I can’t produce anything, I need others/I’m dependent of others.
