Showing papers on "Resource dependence theory published in 2003"

Boards of Directors and Firm Performance: Integrating Agency and Resource Dependence Perspectives

Abstract: Boards of directors serve two important functions for organizations: monitoring management on behalf of shareholders and providing resources. Agency theorists assert that effective monitoring is a function of a board's incentives, whereas resource dependence theorists contend that the provision of resources is a function of board capital. We combine the two perspectives and argue that board capital affects both board monitoring and the provision of resources and that board incentives moderate these relationships.

IT competency and firm performance: is organizational learning a missing link?

Abstract: Many companies have developed strategies that include investing heavily in information technology (IT) in order to enhance their performance. Yet, this investment pays off for some companies but not others. This study proposes that organization learning plays a significant role in determining the outcomes of IT. Drawing from resource theory and IT literature, the authors develop the concept of IT competency. Using structural equations modeling with data collected from managers in 271 manufacturing firms, they show that organizational learning plays a significant role in mediating the effects of IT competency on firm performance. Copyright  2003 John Wiley & Sons, Ltd.

The External Control of Organizations: A Resource Dependence Perspective (Stanford Business Classics)

Abstract: Examines how external constraints affect organizations and how to design and manage organizations under such constraints. Taking a resource dependence perspective on organizations, the book discusses basic components of control, including the concentration and availability of resources, the role of managers, interdependence among organizations, the environment, and organizational structure. Two case studies, one on Israeli managers and one on American defense contractors, exemplify how governmental external control affects organizational choice. In the case of the Israeli managers, the managers' responses regarding the size of the return they would be willing to give up to invest in a government-created development area were positively correlated with the proportion of the firm's government sales. Similarly, the study of American defense contractors examined how willing they were to comply with affirmative action laws for employment of women, finding a strong correlation between positive replies to women seeking employment and government dependence. Dependence is not restricted to the government, however, as firms are heavily reliant upon resources made available to them from other organizations. Despite external control, the organization is able to achieve internal control to a certain extent, stabilizing activities by institutionalizing roles and patterns of behavior. The question of power within organizations requires further study, as organizations are coalitions of interest and only some interests and goals are accomplished at the expense of others. Organizations also serve to create and transact ideas and the influence these ideas create, so that influence and control are multidirectional. Conclusions show that organizations are not autonomous entities, but are reliant upon the larger network of organizations within the environment - through which they must strive to manipulate resources to survive. (CJC)

Board Composition from Adolescence to Maturity: A Multitheoretic View

Abstract: We develop theory to show how board composition and, consequently, firm performance are a reflection of both the firm's life cycle stage and the relative power of the CEO and external financiers at the time of founding. This theory provides insight into the predictive validity of agency, resource dependence, institutional, and social network theories. We also argue that boards are subject to path dependency, and, thus, board composition is likely to persist over time.

Innovative human resource practices and organizational commitment: an empirical investigation

Abstract: In the contemporary business environment, human resource (HR) is an indispensable input for organizational effectiveness. Hence, an effective management of human resources has an important role to play in the performance and success of organizations. Competitive pressures have encouraged organizations to be proactive in diagnosing HR problems and to adopt more innovative HR practices since these were no longer a matter of trend, but rather of survival. The present study attempted to explore the relationship of three dimensions of innovative human resource practices (IHRPs): that is, the extent of introduction of IHRPs, their importance for organizational goal achievement and satisfaction with implementation of IHRPs, with organizational commitment (OC). Regression analyses showed that the perceived extent of introduction of innovative human resource practices by the organizations was the most significant predictor of organizational commitment.

Market-seeking MNEs in an emerging market: How parent–subsidiary links shape overseas success

Abstract: This study extends research on parent–subsidiary links, applying new theoretical perspectives – those of resource dependence and dynamic capability – to the new empirical setting of an emerging market. We suggest that parent–subsidiary links help to mitigate emerging market threats by reducing external dependence, and help to capitalize on emerging market opportunities by enhancing local responsiveness. We identify four dimensions (resource commitment, information flow, local responsiveness and control flexibility) to parent–subsidiary links, and examine environmental effects in moderating the contribution of these dimensions. The analysis of 196 Multi National Enterprise (MNE) subsidiaries in China shows that a parent firm's control flexibility, resource commitment and local responsiveness exert a strong and positive influences on subsidiary performance. These influences are weaker when regulatory interference is higher, but stronger when industrial opportunity is richer.

Human resource management systems and organizational performance: an analysis of the Spanish manufacturing industry

Abstract: This study analyses the relationship between human resource management systems and firm performance, using the Miles and Snow’s typology (1984). The hypotheses set forth to this respect are tested ...

Foreign subsidiaries' government affairs activities: The influence of managers and resources

Abstract: This article examines the government affairs activities of foreign subsidiaries of multinational enterprises. The article develops hypotheses founded on resource dependence theory that examine organizational and environmental factors that might influence subsidiary government affairs activities. Primary data were gathered from 91 foreign subsidiaries of U.S.-based companies. Results from the empirical tests suggest that subsidiary top managers have a strong influence on the administration of their subsidiaries' government affairs activities.

The sociology of organizations : classic, contemporary, and critical readings

Abstract: Preface Introduction Organizations as Rational Systems I: Classic Theories of Bureaucracy and Administration - Michael J. Handel A. Early Definitions of Organization and Management Bureaucracy and Legitimate Authority - Max Weber Critique B. Scientific Management and the Treatment of Labor The Principles of Scientific Management - Frederick W. Taylor Critique The Degradation of Work in the Twentieth Century - Harry Braverman Organizations as Rational Systems II: Contingency Theory and the Discover of Organizational Variation - Michael J. Handel The Management of Innovation - Tom Burns / G.M. Stalker Technology and Organization - Joan Woodward The Measurement of Organization Structures - D.S. Pugh Organizations as Human and Social Systems I: The Impulse to Reform Work - Michael J. Handel A. The Early Human Relations Movement The Hawthorne Experiments - George C. Homans Critique Hawthorne, the Myth of the Docile Worker, and Class Bias in Psychology - Dana Bramel / Ronald Friend B. Humanistic Management and Contemporary Employee Involvement The Human Side of Enterprise - Douglas McGregor From Control to Commitment in the Workplace - Richard E. Walton A Differnt Kind of Company: From Control to Commitment in Practice - Saul Rubinstein Critique Inside a Japanese Transplant: A Critical Perspective - Laurie Graham Organizations as Human and Social Systems II: Informal Organizations as Shadow Structure - Michael J. Handel Conflicts Between Staff and Line Managerial Officers - Melville Dalton The World of Corporate Managers - Robert Jackall Manufacturing Consent: Changes in the Labor Process Under Market Capitalism - Michael Burawoy Rationality and Non-Rationality in Organizational Decision Making - Michael J. Handel Conceptual Models and the Cuban Missile Crisis - Graham Allison Power Inside Organizations - Michael J. Handel Organizations and Oligarchy - Robert Michaels Organizations as Open Systems: Organizations and Their Environments - Michael J. Handel A. Resource Dependency Theory The External Control of Organizations: A Resource Dependence Perspective - Jeffrey Pfeffer / Gerald R. Salancik B. Institutional Theory The Iron Cage Revisited: Institutional Isomorphism and Collective Rationality in Organizational Fields - Paul DiMaggio / Wlater Powell Organizational Ecology Density-Dependent Processes - Glenn R. Carroll / Michael T. Hannan Economic Theories of Organizations - Michael J. Handel Theory of the Firm: Managerial Behavior, Agency Costs, and Ownership Structure - Michael C. Jensen /William H. Meckling The Economics of Organization: The Transaction Cost Approach - Oliver E. Williamson Critique Markets, Hierarchies and Hegemony - Charles Perrow The Evolution of Modern Business Organization: From Big Business to Post-Fordism - Michael J. Handel A. Alfred Chandler's Account of the Rise of Big Business The Emergence of Managerial Capitalism - Alfred D. Chandler, Jr. B. Post-Bureaucratic Alternatives to Big Business Neither Market Nor Hierarchy: Network Forms of Organization - Walter W. Powell Critique Lean and Mean: The Changing Landscape of Corporate Power in an Age of Flexibility - Bennett Harrison Organizational Culture - Michael J. Handel Engineering Culture: Control and Commitment in a High-Tech Corporation - Gideon Kunda Organizations and Society: Gender, Race, Class, and Politics - Michael J. Handel Men and Women of the Corporation - Rosabeth Moss Kanter Black Mobility in Corporations: Up the Corporate Ladder but Out on a Limb - Sharon Collins Segmented Labor Markets - Richard Edwards The Access Process: Loopholes as a System - Dan Clawson Alan Neustadtl, and Denise Scott Organizational Deviance - Michael J. Handel Normal Accidents: Living With High-Risk Technologies - Charles Perrow Rational Choice, Situated Action, and the Social Control of Organizations: The Challenger Launch Decision - Diane Vaughan Democratic Alternatives to Capitalist Bureaucracy: Worker Ownerships and Self-Management - Michael J. Handel The Collectivist Organization: An Alternative to Rational Bureaucratic Models - Joyce Rothschild-Whitt Worker Ownership, Participation, and Control: Toward a Theoretical Model - William Foote/Joseph R. Blasi/Douglas Lynn Kruse Government, Nonprofit Agencies, and Voluntary Associations - Michael J. Handel Street-Level Bureaucracy - Michael Lipsky References Index

The Revitalization of the CWA: Integrating Collective Bargaining, Political Action, and Organizing

Abstract: This case study of the Communications Workers of America (CWA) demonstrates the value of resource dependence and contingency organizational theories—two branches of organization theory, which has m...

An Exploratory Study on Interlocking Directorates in Listed Firms in Singapore

Abstract: Interlocking directorates is not a recent phenomenon in Singapore. In any country where a substantial proportion of commercial and industrial activities are undertaken by corporations, the importance of the role played by board interlocks should not be ignored. This study examines the structure of interlocking directorates among 295 listed companies in Singapore. The objective is to explore whether firm size, financial connections, debt and corporate performance affect board interlocks. Using ten independent variables, we found that market capitalisation, board size, total assets, return on assets, return on sales, profit before tax and nature of the company (financial or non-financial) are significantly correlated with board interlocks. This lends support to the Bank Control Theory and Resource Dependency Theory. The findings are consistent with those of the United States and Australia.

Learning networks, power and legitimacy in multinational subsidiaries

Abstract: This paper demonstrates how learning networks are used by subsidiaries to maximize the strategic value of knowledge as a source of power; and how the embedded nature of knowledge influences this process. Using resource dependence and legitimacy concepts, it is argued that different forms of learning networks afford knowledge the legitimacy to act as a source of power. These forms are based on combinations of intra- or inter-organizational local and international relations. The results indicate that local learning networks are more likely to enable innovations because local contexts are perceived as being the most useful or legitimate. Moreover, international intra-organizational learning networks reinforce the legitimacy of knowledge as an important resource by encouraging diffusion. The tension between organizational strategies and institutional structures supporting innovation is explored.

Explaining Sales Pay Strategy Using Agency, Transaction Cost and Resource Dependence Theories*

Abstract:  The purpose of this study is to investigate, using data gathered from 325 French-Canadian organizations, the influence of key constructs related to agency, transaction cost and resource dependence theories on the proportion of salary in sales compensation. Usefulness analysis showed that performance information (9 per cent), uncertainty (8 per cent) and dependence resource (5 per cent) constructs have a significant incremental contribution to sales compensation. Regarding specific hypothesis tests, results of full model show that the capacity to observe behaviour, team sales and financial resources offered are associated with an increased use of salary pay. In contrast, adaptability of product/service-related resources, salesforce experience and high marginal salesforce productivity are associated with decreased use of the salary component. However, the results of full model have failed to support the direction or influence of relationships between programmability, span of control, market and selling uncertainty, the predominance of salespeople and TCA measures on proportion of salary. The results support the argument that integration of multiple theoretical perspectives better explains pay policy.

An Exploratory Study on Interlocking Directorates in Listed Firms in Singapore

Abstract: Interlocking directorates is not a recent phenomenon in Singapore. In any country where a substantial proportion of commercial and industrial activities are undertaken by corporations, the importance of the role played by board interlocks should not be ignored. This study examines the structure of interlocking directorates among 295 listed companies in Singapore. The objective is to explore whether firm size, financial connections, debt and corporate performance affect board interlocks. Using ten independent variables, we found that market capitalisation, board size, total assets, return on assets, return on sales, profit before tax and nature of the company (financial or non-financial) are significantly correlated with board interlocks. This lends support to the Bank Control Theory and Resource Dependency Theory. The findings are consistent with those of the United States and Australia.

3. The functional and dysfunctional consequences of human resource information technology for organizations and their employees

Abstract: In recent years there has been a rise in the use of technology in the field of human resources (HR) management. For example, surveys show that 70% of large firms now use HR information systems, 80% conduct online recruiting, 67% post job openings online, and 40% use web-based portals as a means of communicating organizational policies and practices to actual and potential employees (Cedar, 2001; Towers Perrin, 2001). The primary reason for the increased use of human resources information technology (HRIT) is that organizations believe that automating labor intensive HR functions will help them streamline processes, utilize employees talents and skills more effectively,

Toward the Operationalization of Resource Investments Made between Customers and Providers of a Tourism Service

Abstract: The purpose of this article is to describe the process of developing an instrument to assess the types of resources invested by customers and providers of tourism services. Previous literature suggested that the type of resources invested between individuals was associated with the length and intimacy of their relationship. This phenomenon was explained by some authors using Resource Theory. As a consequence, there was an opportunity of using this theoretical framework to help explain the stability and intimacy of customer-provider relationships. Thus, two scales were developed using traditional procedures and confirmatory factor analysis: Providers' Perceived Resource Investments (PPRI) and Customers' Reported Resource Investments (CRRI). Both measurement models had good fit with the data. Each model consisted of 14 items distributed in four dimensions and a second-order factor. These findings suggested that Resource Theory can be used to gain insight into customer-provider relationships.

Independent Movement or Government Subcontractor? Strategic Responses of Voluntary Organizations to Institutional Processes

Abstract: The purpose of this paper is to identify factors that can explain differing responses of voluntary organizations to the pressure of homogenization that follows from interaction with public authorities. The paper is theoretically based on institutional organization theory and resource dependence theory, and empirically on research on voluntary organizations in the social sector. It is asserted that the following factors may explain voluntary organizations' ability to maintain autonomous in relation to public organizations: the characteristics of the organizational field, the focal organization's relations to the dominating organization in the field, organization characteristics and intra-organizational processes and strategies.

Controlling Sourcing Risk in Electronic Marketplaces

Abstract: Despite high expectations, transactions through Internet based electronic marketplaces have not expanded rapidly. Recent evidence suggests that the peculiar characteristics of purchasing through Internet-based electronic marketplaces may actually increase sourcing risk. Such marketplaces may expose buyers to suppliers with whom they have no transaction history. Transacting through a public medium (Internet) may raise security and privacy concerns. Along with an evolving legal framework for governing online transactions such concerns may add to the overall cost of transactions. This paper by drawing on transaction cost economics, agency theory, resource dependence theory and channel risk literature identifies transaction risk, security risk and privacy risk as three dimensions of sourcing risk that buyers may face in transacting through Internet-based electronic marketplaces. It also proposes a risk-control framework that captures the linkage between sourcing risk and control systems. This linkage expounds...

Independent Movement or Government Subcontractor? – Strategic Responses of Voluntary Organizations to Institutional Processes

Abstract: The purpose of this paper is to identify factors that can explain differing responses of voluntary organizations to the pressure of homogenization that follows from interaction with public authorities. The paper is theoretically based on institutional organization theory and resource dependence theory, and empirically on research on voluntary organizations in the social sector. It is asserted that the following factors may explain voluntary organizations’ ability to maintain autonomous in relation to public organizations: the characteristics of the organizational field, the focal organization's relations to the dominating organization in the field, organization characteristics and intra–organizational processes and strategies.

Female participation in decision making in agricultural households in Kenya: empirical findings

Abstract: Survey data for this paper were collected in a rural district in Kenya between December 2000 and January 2001. The main objective was to identify the factors determining female participation in household decision making. Our results suggest that bargaining models and resource theory cannot be applied in a society where customarily determined sex and social stratification systems place males higher than females and determine that only men make major decisions. Our results support the hypothesis that cultural theory is more significant than bargaining models or resource theories in determining women's participation in decision making in rural Kenya.

The Transnational Political Economy of Corporate Governance Regulation: A Research Outline

Abstract: Corporate governance has become a buzzword of the global business community and is now receiving even wider attention given the repercussions of the Enron collapse. Although there is a burgeoning literature on this topic, the bulk of it is either highly normative or focused on corporate governance practices at the level of the firm. In contrast, our aim is to explain the current transformations of corporate governance regulation. Whereas this regulation used to be a distinctly national affair, it is now increasingly an area subject to both public and private (self) regulation in multiple arenas, of which three are outstandingly important as well as closely interrelated and, therefore, form the empirical focus of the programme: Europeanisation in the area of corporate governance regulation affects national regimes of corporate governance with a particular historical diversity, without entirely replacing them. The EU, furthermore, does not operate in a vacuum but in a transatlantic and global context where it has to negotiate its choices with both state (mainly the US) and non-state actors. At the global level, private bodies such as the International Accounting Standards Board set many corporate governance standards, and international organisations like the OECD disseminate norms for good corporate governance. Central and East European countries (CEEC) are exposed to the multiple (and partially conflicting) demands by global institutions and the EU when developing their corporate governance structures. All three projects focus on our central research question: What explains the transformation of corporate governance regulation at different levels, and through varying modes, of governance? We will draw on two bodies of existing theory, i.e. the transnational political economy approach and the resource dependency theory on transnational policy networks. This programme aims to combine the strong empirical focus on institutional forms of the latter with the strong explanatory potential in terms of structural forces and power relations of the first. The paper gives a first outline of the research design. This paper is based on a grant proposal to the Netherlands Organisation for Scientific Research (NWO) for a four year programme entitled ʻThe transnational political economy of corporate governance regulationʼ, which was awarded in September 2003. Details of the NWO programme Shifts in Governance (the context in which this grant has been awarded) can be found on the NWO website (www.nwo.nl). The applicants were the authors of this Working Paper, in collaboration with Professor Jan Klaassen RA, the Dean of the Faculty of Economics and Business Administration of the Vrije Universiteit Amsterdam.

Transnational corporation-bangladesh relations: a resource dependence perspective

Abstract: This article examines the application of "resource dependency theory" to transnational corporations (TNCs) operating in host countries like Bangladesh to explain the relationship between the TNCs and Bangladesh. Data indicate that while the TNCs' participation in a third world host country is encouraged primarily for promoting its economic development, TNCs are mainly attracted by market size, purchasing capacities (determined mainly by GNP) of the population, and stable political condition of the country. Although examination of the application of resource dependency theory provides some insights into understanding the complicated relationship between TNCs and Bangladesh, several other factors, not explained by resource dependency theory, help explain the behavior of TNCs in a host country

Resource Strategy and Signals to Resources Market in Indian Software

Abstract: Resource dependence of strategies of firms in software have mostly been studied from an internal perspective. However, because large manpower turnover takes place across most firms and because quality of resources is uncertain, firms value the functioning of the market of software personnel. Signals based on which transactions in such a market take place appear through advertisements for jobs. This paper has studied 1,615 advertisements for software jobs in India and abroad. It is observed that signals that appear in advertisements are vague. It appears that firms benefit by concealing from competitors information about its resources, although vagueness of information raises fixed cost.

Changing corporate governance in korea: rise of a market for corporate control or the strategic adaptation of chaebol?*

Abstract: The Asian crisis at the end of the 20th century has brought many changes in the Korean economy and business organizations. In this paper, we focused on corporate acquisitions during the period 1997-2000. We draw theoretical insights from institutional theory, network theory, resource dependence, and financial economics. Taking advantage of detailed event-level data of mergers and acquisitions between 1997 and 2000, we apply hazard rate models to explain correlates of major acquisition offers. We were able to identify substantial amount of heterogeneity in the corporate acquisitions, and drew two major division lines for different types of acquisitions depending on who made offers: foreign/domestic and member/non-member of business group. Model estimation results show that the sets of variables affecting acquisition offers differ by the types of acquisitions. Acquisitions by business group members depend less on the market evaluation of target firms when compared to the acquisitions by foreign firms. Foreign firms are more likely to follow rules of market for corporate control in making decisions on acquisitions. These results provide partial support for the theoretical insights we examined in this paper.

Property Rights and Managerial Decisions in For-Profit, Nonprofit, and Public Organizations: Comparative Theory and Policy

Abstract: PART 1: THE ANALYTICAL FRAMEWORK Economic Theory of Organization: What It Is and What It Isn't Efficient Decisions in Organizations and Social Welfare Property Rights, Incentives and Organizations PART 2: MANAGERIAL DECISION MAKING IN ALTERNATIVE ORGANIZATIONS Private For-Profit Organizations: The Firm Public Sector Organizations: The Bureau Nonprofit Organizations Comparative Organizational Structures and Managerial Decisions PART 3: POLICY IMPLICATIONS Organizational Structure and Policy: Regulation and Taxation Organizational Structure and Policy: Industrial Organization Variations in Organizational Structures PART 4: ADDITIONAL ISSUES IN COMPARATIVE ORGANIZATIONAL STRUCTURES Economic Theory of Organization as a Social Science Additional Issues in Economic Theory of Organizations