Resource dependence theory

About: Resource dependence theory is a research topic. Over the lifetime, 2732 publications have been published within this topic receiving 184871 citations.

Information, power, and control of the distribution channel: preliminary results of a field study in the consumer packaged goods industry

Abstract: Information technology can reduce coordination costs, leading to increased coordination and cooperation among buyers and suppliers in an industry. However, increased cooperation may be limited by other factors, particularly power dynamics and the structure of the bargaining game. This paper investigates the role of power in influencing the effects of IT on interactions between manufacturers and retailers in the consumer packaged goods industry. IT can change the balance of power by changing the value of key resources, including information, This will affect the division of benefits from improved coordination through IT, thus shaping the level and form of coordination. 1.0 INTRODUCTION that risk) of being opportunistically exploited by the other party to the transaction, in limiting coordination through IT. Recently, considerable progress has been made in applying economic theory to understanding the complex interactions This paper explores the role of power in influencing the among IT, organizational structure, and industry structure. effects of IT on inter-organizational interactions. Power At the heart of this progress is the proposition that innovadetermines how any surplus created from improved coorditions in IT fundamentally influence the economics of nation will be allocated among participants.' Firms will coordination. As Malone and Rockart (1992) succinctly seek to use their power to shape actively the form of summarize, if the cost of coordination decreases, more coordination, to maximize their share of the economic coordination will be consumed, often substituting for other surplus created through increased coordination. The mechresources. Moreover, coordination-intensive structures will anisms that evolve for coordination where power dynamics tend to evolve. This has led researchers to focus on interare present may not be the most efficient when viewed actions among economic activities, either within a firm or from the perspective of the industry as a whole. among firms. Several academic theorists (e.g., Malone and Crowston 1991; Bakos 1991) are actively pursuing an The concept of power used here is Pfeffer and Salancik' s understanding of coordination costs. (1978) resource dependency theory. The exercise of power occurs around bargaining for resources. Each player At the same time, understanding coordination costs alone is requires access to resources to accomplish his objectives. not sufficient for explaining and predicting the effects of Where these resources are controlled by another party, and information technology on economic organization, particuwhere this party may desire different usage of these relarly interorganizational interactions. Increasing coordinasources, bargaining must occur. The bargaining power of tion between firms through IT can reduce costs or increase each party is determined by the relative value of the rerevenues, creating an economic surplus. Yet it frequently source dependencies. appears that the optimum level of coordination or cooperation that is possible, based solely on coordination costs and Power dynamics can lead to inefficiencies in coordination. the expected surplus from coordination, is not approached Conflicts in basic objectives can interact with environmenin practice. Building on Williamson's (1975) tmnsactions tal factors to lead to bargaining processes that are inefficost economics, rr theorists such as Clemons and Row cient for the participants when viewed as a combined (1992) and Gurbaxani and Whang (1991) have explored the system. These processes evolve and arE held in place by role of transaction risk, the risk (or the costs of reducing power. Efforts to improve coordination, through IT or

How do IT outsourcing vendors respond to shocks in client demand? A resource dependence perspective

Abstract: IT outsourcing vendors depend on projects from their clients to reap gains and develop capabilities. Because of this dependence, vendors are vulnerable to shocks in client demand. However, the extant literature on how vendors mitigate the damage from demand shocks is very limited. These multiple case studies examined five pairs of relationships between Chinese vendors and their Japanese clients, drawing on resource dependence theory, which considers two response strategies: bridging and buffering. Our findings suggest that both bridging and buffering should be specified further on the basis of their explorative and exploitative dimensions and that the choice of a particular strategy depended on the power relation between the vendor and client. Results show that when the client was in a high-power advantage, the vendor chose bridging. More specifically, if the vendor also had high power, it adopted explorative bridging; otherwise, it adopted exploitative bridging. When the client was in a low-power position, the vendor would pursue explorative buffering. Exploitative buffering was a common response to demand shocks, independent of the dyadic power relation.

Community College Mission: Re(S)ources Make a Difference

Abstract: Community colleges are unique among higher education institutions in their potential access to local appropriations as well as state funding. A total of 26 states reported to the Education Commission of the States in 2001 that community colleges in their states received some share of local funding. Using data for 781 public community colleges, we explored the implications of resource dependency theory for mission differentiation between dual-funded and state-funded colleges. Significant differences were observed in their student bodies, programming, expenditures, and outcomes. These differences have implications for the increasing dependence on state funding for community colleges and the roles these institutions play.

Board-Management Relationships: Resources and Internal Dynamics **

Abstract: This paper investigates directors' relationships with firms' managers, using lenses of resource dependence theory and resource based view. Because of different roles that board members perform in modern organisations we seek to find out what board-management relationships may provide a company with competitive advantage relative to other firms. The paper reports the results from a study conducted in six New Zealand companies. We used multiple respondents from the top management and board members in a variety of firms from different industries. Qualitative analysis of interview transcripts, and matching the qualitative results with secondary information on the companies, reveal several interesting patterns of relationship among top management and board members, as well as the value of this relationship to the firm. Key words: corporate governance, board-management dynamics, resource dependence, resource-based view Introduction The emerging research on corporate governance has extensively considered the changing role of boards in modern corporations. Prescriptive studies by (Carter/ Lorsch 2004; Demb/Neubauer 1992; Huse 1998; Lorsch/Maclver 1989), among others, have analysed a number of issues or paradoxes that boards around the world have to deal with and consequently redesign themselves and their relationships accordingly within and outside corporations. The major issues that are ascribed as key evolutionary changes refer to the changing expectations that management, shareholders, and other stakeholders (customers, employees, and suppliers) have about directors' involvement in the company's affairs. We investigated the specific governance mechanism of board of directors, and directors' relationships with firms' managers, using lenses of resource dependence theory and resource based view. The flexibility in exploration was preserved by using detailed case studies from six companies based in New Zealand from a variety of industries. The research questions investigated directors' knowledge and expertise (resources) and their contribution and involvement (internal dynamics) in the company's affairs. Heeding recent calls to study governance and board policies from within, under the overall rubric of the emerging behavioural perspectives on boards and governance (Gabrielsson/Huse 2002; Huse 1998, 2003, 2005; McNulty/Pettigrew 1999; Rindova 1999; Useem 2003), we place particular emphasis on the internal workings and dynamics of the boards. In particular, this study was motivated by a desire to provide an empirical underpinning to theoretical developments that widen the context of corporate governance, by investigating a wider variety of roles and processes within the board (Gabrielsson/Huse 2005; Goel/Erakovic 2003; Huse 2005). In addition, by investigating boards in firms in different stages in the lifecycle (young versus mature) and in two different contexts (traditional versus high-tech), we are able to see the contrast between board roles hypothesi2ed by lifecycle theories of board processes (Shen 2003). We believe that our research enhances literature on internal board working (Demb/Neubauer 1992; Finkelstein/Mooney 2003; Gabrielsson/Winlund 2000; Roberts et al. 2005) by providing evidence from a relatively understudied context of New Zealand. Because of different roles that board members perform in modern organisations we seek to find out what board-management relationships may provide a company with competitive advantage relative to other firms. Also, how these 'internal qualities' can be translated into valuable 'external' relations? What are the distinctive structures and norms of various governance practices? Are these qualities specific for certain types of companies/industries? It is these questions, this research aims to explore. The major contribution of this paper is investigating the board's role as a resource via three key roles. First, we investigate the board's sources of knowledge about the company's affairs and how they are linked or deployed toward the roles boards are supposed to play. …