Power Imbalance, Mutual Dependence, and Constraint Absorption: A Closer Look at Resource Dependence Theory

2005 ◽  
Vol 50 (2) ◽  
pp. 167-199 ◽  
Author(s):  
Tiziana Casciaro ◽  
Mikolaj Jan Piskorski
Keyword(s):  
Mergers And Acquisitions ◽  
Resource Dependence ◽  
Resource Dependence Theory ◽  
External Control ◽  
Power Imbalance ◽  
Public Companies ◽  
Mutual Dependence ◽  
Model Account ◽  
Dependence Theory ◽  
Powerful Explanation

Despite ubiquitous references to Pfeffer and Salancik's classic volume, The External Control of Organizations, resource dependence theory is more of an appealing metaphor than a foundation for testable empirical research. We argue that several ambiguities in the resource dependence model account in part for this and propose a reformulation of resource dependence theory that addresses these ambiguities, yields novel predictions and findings, and reconciles them with seemingly contradictory empirical evidence from past studies. We identify two distinct theoretical dimensions of resource dependence, power imbalance and mutual dependence, which in the original theory were combined in the construct of interdependence and yet have opposite effects on an organization's ability to reduce dependencies by absorbing sources of external constraint. Results from a study of interindustry mergers and acquisitions among U.S. public companies in the period 1985–2000 indicate that, while mutual dependence is a key driver of mergers and acquisitions, power imbalance acts as an obstacle to their formation. We conclude that our reformulation of the resource dependence model contributes to realizing the potential of resource dependency as a powerful explanation of interorganizational action.

Constraint absorption in emerging economies: the role of business groups

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Mueen Ahmed ◽  
Sankalp Pratap
Keyword(s):  
Emerging Economies ◽  
Resource Dependence ◽  
Resource Dependence Theory ◽  
Power Imbalance ◽  
Resource Based View ◽  
Content Type ◽  
Mutual Dependence ◽  
Dependence Theory ◽  
The Relationship

Purpose The purpose of this paper is to highlight the motivation for firms in emerging economies to engage in constraint absorption. It illustrates the mechanisms that enable business group (BG) affiliated firms to manage interdependencies vis-à-vis standalone firms in emerging economies. Design/methodology/approach The propositions outlined in this study are rooted in the theoretical lens of resource dependence theory (RDT). The authors integrate RDT with the resource-based view and institutional theory to explain the effect of BG affiliation on the relationship between the two types of interdependence (i.e. mutual dependence and power imbalance) and the likelihood of constraint absorption. Findings This paper theorizes that BG affiliation influences the relationship between mutual dependence/power imbalance and the likelihood of constraint absorption. However, if both the firms in a dyad are affiliated to a BG, the likelihood of constraint absorption is likely to be low owing to a process called “co-optation” even if mutual dependence or power imbalance between the firms is high. Originality/value This paper highlights how BG affiliated firms are better at managing contingencies in the external environment vis-à-vis standalone firms. This paper also advises managers that the type of organizational form is an important factor to be considered while engaging in constraint absorption in an emerging economy.

DECIDING TO DISCOVER ENTREPRENEURIAL OPPORTUNITIES: A MULTI-LEVEL INVESTIGATION BASED ON INFORMATIONAL ECONOMICS AND RESOURCE DEPENDENCE THEORY

2016 ◽  
Vol 21 (02) ◽  
pp. 1650009 ◽  
Author(s):  
SHANSHAN QIAN ◽  
DALONG MA ◽  
CHAO MIAO
Keyword(s):  
Resource Dependence ◽  
Resource Dependence Theory ◽  
Power Imbalance ◽  
Specific Knowledge ◽  
Policy Makers ◽  
Entrepreneurial Opportunities ◽  
Dependence Theory ◽  
Multi Level ◽  
The Relationship ◽  
Practical Implications

Under what circumstance do entrepreneurs decide to discover entrepreneurial opportunities to start new businesses? Informational economics suggests when entrepreneurs possess prior specific knowledge, they decide to discover opportunities. This paper contributes to informational economics perspective by taking resource dependence theory into consideration. Utilizing a conjoint experiment and a multilevel analysis of 66 student entrepreneurs, we found that students’ prior specific knowledge significantly influences students’ decision to discover opportunities. Further, we found that power imbalance moderates the relationship between prior specific knowledge and students’ decisions to discover opportunities. Our paper has theoretical implications and practical implications for entrepreneurs, educators and policy makers.

scholarly journals Resource-Dependence Theory

Management ◽  
2014 ◽  
Author(s):  
Adam Cobb ◽  
Tyler Wry
Keyword(s):  
Empirical Research ◽  
Resource Dependence ◽  
External Environment ◽  
Resource Dependence Theory ◽  
External Control ◽  
Scholarly Work ◽  
The Core ◽  
Focal Firm ◽  
Dependence Theory ◽  
Resource Dependence Perspective

The resource dependence perspective (hereafter RD) refers to a research tradition that emerged from the basic framework of Jeffrey Pfeffer and Gerald R. Salancik’s classic 1978 work, The External Control of Organizations: A Resource Dependence Perspective (Pfeffer and Salancik 1978, cited under Classic Treatments). The theoretical arguments that serve as RD’s foundation can be summarized as follows: (1) an organization’s external environment comprises other organizations, each with their own interests and objectives; (2) organizations hold power over a focal firm—and may thus constrain its behavior—if they control resources that are vital to its ongoing operation and cannot be acquired elsewhere. RD also highlights a number of strategies that organizations can utilize to deal with problematic dependence relationships; empirical research in this tradition has largely focused on this catalog of strategies. This bibliography is organized by the topic areas covered in External Control and displays representative and impactful work associated with each topic. Though RD’s influence has spread to a number of disparate fields beyond management (Gerald F. Davis and J. Adam Cobb’s article “Resource Dependence Theory: Past and Future” (Davis and Cobb 2010, cited under Reviews and Theoretical Intersections), this article focuses on scholarly work published in management journals and related fields such as strategy and economic sociology which collectively comprise the core RD literature.

Does it pay to bribe? The influence of bribery on new venture disbanding in China

2021 ◽  
Vol 46 (3) ◽  
pp. 185-196
Author(s):  
Jintong Tang ◽  
Zhi Tang
Keyword(s):  
Economic Development ◽  
Resource Dependence ◽  
Local Economic Development ◽  
New Ventures ◽  
Resource Dependence Theory ◽  
Theory And Practice ◽  
New Venture ◽  
Resource Based View ◽  
Dependence Theory ◽  
Chinese Entrepreneurs

This research extends bribery research toward entrepreneurial theory and practice by examining how bribery impacts new venture disbanding in China. Existing research suggests that bribery may enhance firms’ competitive advantage; however, building off of resource-based view and taking into consideration the institutional context in China, the current study proposes that firm bribery activity hurts new ventures by increasing the hazard of venture disbanding. Further, guided by resource dependence theory, this study examines how local economic development and organizing activity moderate the relation between bribery and disbanding. In particular, it is proposed that when local economic development is suffering, or when firms are not engaging in appropriate organizing activities, bribery will lead to higher chance of new venture disbanding. Data from Chinese entrepreneurs support these hypotheses.

Coping with Demographic Change in Job Markets: How Age Diversity Management Contributes to Organisational Performance

2015 ◽  
Vol 29 (1) ◽  
pp. 5-30 ◽  
Author(s):  
Gisela Bieling ◽  
Ruth Maria Stock ◽  
Florian Dorozalla
Keyword(s):  
Resource Dependence ◽  
Diversity Management ◽  
Developed Countries ◽  
Resource Dependence Theory ◽  
Steady Increase ◽  
Organisational Performance ◽  
Age Diversity ◽  
Dependence Theory ◽  
Demographic Shifts ◽  
Hr Managers

Demographic shifts are altering job markets in developed countries. A steady increase in the average age of employees and a decline in the number of young, qualified workers have intensified the war for talent, resulting in highly competitive and dynamic job markets. Using resource dependence theory, this study investigates how organisations respond to such challenges. An investigation of a sample of 153 German companies provides support for the hypotheses that HR managers implement age diversity management in both appraisal and compensation practices as a response to competitive job markets which, in turn, contributes to organisational performance.

The effect of supplier globalization on firm innovation: a resource dependence theory perspective

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Yibo Wang ◽  
Bai Liu
Keyword(s):  
Resource Dependence ◽  
Positive Impact ◽  
Market Competition ◽  
Effective Means ◽  
Resource Dependence Theory ◽  
Institutional Distance ◽  
Foreign Firms ◽  
Firm Innovation ◽  
Content Type ◽  
Dependence Theory

PurposeEither buying or making is predicted by the existing literature for firms to reduce dependence. However, firms in the rapid globalization are found to adopt a pattern of buying and making. Specially, they critically rely on foreign firms for needed materials and goods, and invest in innovation against the uncertainty of potential supply disruptions simultaneously. Therefore, this paper seeks to investigate how the depth and width of supplier globalization shape firm innovation together. Moreover, the moderating effects of institutional distance and market competition are also examined in the paper.Design/methodology/approachGrounded on the resource dependence theory, this paper develops a theoretical framework and tests the proposed hypotheses by Poisson model using secondary data from 502 Chinese listed firms with foreign suppliers.FindingsThe depth of supplier globalization has a positive impact on firm innovation, while the width of supplier globalization weakens firm innovation. The depth and width of supplier globalization further interact negatively to influence firm innovation. Moreover, this relationship is enhanced when firms establish relationships with foreign firms with greater institutional distance and is weakened when firms face fiercer product competition.Originality/valueThe authors contribute to the literature by evidencing that the existence of foreign suppliers results in firms' enhancement of innovation to secure their operations and showing that diversifying the country origins of foreign suppliers is an effective means to reduce firms' uncertainty about supply disruption. We also advance the understanding regarding the contextual factors in which firms are more likely or less likely to manage the uncertainty about supplier globalization.

scholarly journals Effect of Governance on the Efficiency of the Indonesian Banking Industry

2020 ◽  
Vol 15 (1) ◽  
pp. 93
Author(s):  
Fransiska Novina Hayu Indrianti ◽  
Sutrisno T. ◽  
Erwin Saraswati
Keyword(s):  
Gender Differences ◽  
Resource Dependence ◽  
Banking Sector ◽  
Banking Industry ◽  
Academic Research ◽  
Total Sample ◽  
Resource Dependence Theory ◽  
Banking Efficiency ◽  
Dependence Theory ◽  
Dea Efficiency

This study aims to examine observations and determine the effects of corporate governance on the efficiency of the Indonesian banking sector. The research calculated DEA efficiency and performed logistic regression, with a total sample of 150 observations. Results show that independent commissioners, the educational level of commissioners, the board of commissioners meeting, and the term of office of the commissioners all have a significant impact on improving the efficiency of the banking industry. Conversely, the large number of commissioners as well as the gender differences among them do not have any effect on banking efficiency. These findings indicate that authorities should not focus on the size of the board and the gender differences among the board commissioners in finding ways to increase or decrease a firm’s efficiency. The results of this study can contribute to academic research through agency theory and resource dependence theory as well as provide insights that can be used by practitioners. Keywords: Governance; banking efficiency; DEA

scholarly journals Falsification of Theorizing in Operations Management Research

2018 ◽  
Vol 6 (1) ◽  
pp. 102
Author(s):  
Abdul Salam Khan ◽  
Iqbal Muhammad Khan ◽  
Muhammad Sadiq ◽  
Imran Ahmed Khan
Keyword(s):  
Operations Management ◽  
Resource Dependence ◽  
Transaction Cost Economics ◽  
Resource Dependence Theory ◽  
The Body ◽  
Theory And Practice ◽  
Management Research ◽  
Resource Based View ◽  
Dependence Theory ◽  
Practice Approach

The practices of operations management research have been inclined towards practicality and pragmatism. Induction is core background of research in operations management. However, there are certain biases and critiques on the generalizability of data using the approach of Induction, of which falsification is more prominent. This study takes upon three major theories used in Operations Management (OM) research such as Resource Based View (RBV), Transaction Cost Economics (TCE) and Resource Dependence Theory (RDT) and discusses the falsification critiques such as tautology on the theories and theorization of Operations Management (OM) and how the body of research in operations management responds to the criticism. Our study suggests that there needs to be a domain limitation of the theorizing process wherein the theory is posit to hold and thus exposing the theory at hand to the critique of falsification. The theory needs not to capture every facet of the phenomena under examination. This study also highlight the importance of developing field specific theories and the improvement brought into the process of theorization and towards the end we describe courses of action for improving the balance between theory and practice approach in the field.

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