Resource dependency theory

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Acronym

RDT

Alternate name(s)

Resource dependence theory

Main dependent construct(s)/factor(s)

Power of one organization (unit) upon another

Main independent construct(s)/factor(s)

Resource Importance, Alternatives (for the resource), Discretion (Unfettered Discretion)

Concise description of theory

Organizational success in resource dependency theory (RDT) is defined as organizations maximizing their power (Pfeffer 1981). Research on the bases of power within organizations began as early as Weber (1947) and included much of the early work conducted by social exchange theorists and political scientists. Generalization of power-based arguments from intra-organizational relations to relations between organizations began as early as Selznick (1949). RDT characterizes the links among organizations as a set of power relations based on exchange resources.

RDT proposes that actors lacking in essential resources will seek to establish relationships with (i.e., be dependent upon) others in order to obtain needed resources. Also, organizations attempt to alter their dependence relationships by minimizing their own dependence or by increasing the dependence of other organizations on them. Within this perspective, organizations are viewed as coalitions alerting their structure and patterns of behaviour to acquire and maintain needed external resources. Acquiring the external resources needed by an organization comes by decreasing the organization’s dependence on others and/or by increasing other’s dependency on it, that is, modifying an organization’s power with other organizations.

RDT rest on some assumptions:

1. Organizations are assumed to be comprised of internal and external coalitions which emerge from social exchanges that are formed to influence and control behaviour
2. The environment is assumed to contain scarce and valued resources essential to organizational survival. As such, the environment poses the problem of organizations facing uncertainty in resource acquisition.
3. Organizations are assumed to work toward two related objectives: acquiring control over resources that minimize their dependence on other organizations and control over resources that maximize the dependence of other organizations on themselves. Attaining either objective is thought to affect the exchange between organizations, thereby affecting an organization’s power.

Although RDT was originally formulated to discuss relationships between organizations, the theory is applicable to relationships among units within organizations. RDT is consistent with ecological and institutional theories of organizations where organizations are seen as persistent structures of order under constant reinterpretation and negotiation, interacting with an indeterminate environment of turbulence and a multitude of competing interests.

Sources

Ulrich, D. and J. B. Barney (1984). "Perspectives in organizations: Resource dependence, efficiency, and population." Academy of Management. The Academy of Management Review (pre-1986) 9(000003): 471.
Medcof, J. W. (2001). "Resource-based strategy and managerial power in networks of internationally dispersed technology units." Strategic Management Journal 22(11): 999.
Tillquist, J., J. L. King, et al. (2002). "A representational scheme for analyzing information technology and organizational dependency." MIS Quarterly 26(2): 91.

Diagram/schematic of theory

N/A

Originating author(s)

Jeffrey Pfeffer, Gerald Salancik (The external control of organizations,1978)

Seminal articles

Pfeffer, J., & Salancik, G. 1978. The external control of organizations: A resource dependence perspective, New York, Harper & Row.

Pfeffer, J. 1981. Power in organizations, Pitman.

Ulrich, David, & Barney, Jay B. 1984. Perspectives in organizations: Resource dependence, efficiency, and population. Academy of Management Review, 9(3): 471.

Originating area

Sociology, Political science

Level of analysis

Firm

IS articles that use the theory

Al-Qirim, Nabeel A. Y. 2003. The strategic outsourcing decision of IT and eCommerce: The case of small businesses in New Zealand. Journal of Information Technology Cases and Applications, 5(3): 32.

Cheon, Myun J., Grover, Varun, & Teng, James T. C. 1995. Theoretical perspectives on the outsourcing of information systems. Journal of Information Technology (Routledge, Ltd.), 10(4): 209.

Elg, Ulf, & Johansson, Ulf. 1997. Prevailing national networks: An obstacle to european interaction? International Review of Retail, Distribution & Consumer Research, 7(1): 1-21.

Grover, Varun, & Cheon, Myun J. 1996. The effect of service quality and partnership on the outsourcing of information systems functions. Journal of Management Information Systems, 12(4): 89.

Hart, Paul J., & Saunders, Carol S. 1998. Emerging electronic partnerships: Antecedents and dimensions of EDI use from the supplier's. Journal of Management Information Systems, 14(4): 87.

Humphreys, P. K., Lai, M. K., & Sculli, D. 2001. An inter-organizational information system for supply chain management. International Journal of Production Economics, 70(3): 245-255.

Iskandar, B. Y., Kurokawa, S., & LeBlanc, L. J. 2001. Adoption of electronic data interchange: The role of buyer-supplier relationships. Engineering Management, IEEE Transactions on, 48(4): 505-517.

Jae-Nam Lee, & Young-Gul Kim. 1999. Effect of partnership quality on IS outsourcing success: Conceptual framework and empirical validation. Journal of Management Information Systems, 15(4): 29-61.

Jayatilaka, Bandula, Schwarz, Andrew, & Hirschheim, Rudy. 2003. Determinants of ASP choice: An integrated perspective. European Journal of Information Systems, 12(3): 210.

Kern, Thomas, Kreijger, Jeroen, & Willcocks, Leslie. 2002. Exploring ASP as sourcing strategy: Theoretical perspectives, propositions for practice. Journal of Strategic Information Systems, 11(2): 153-177.

Malone, W.,Thomas, & Crowston, Kevin. 1994. The interdisciplinary study of coordination. ACM Computing Surveys, 26(1): 87.

Reekers, N., & Smithson, S. 1996. The role of EDI in inter-organizational coordination in the european automotive industry. European journal of information systems, 5(2): 120.

Sakaguchi, Toru, Nicovich, Stefan G., & Dibrell, C. C. 2004. Empirical evaluation of an integrated supply chain model for small and medium sized firms. Information Resources Management Journal, 17(3): 1.

Sia, Siew K., & Neo, Boon S. 1997. Reengineering effectiveness and the redesign of organizational control: A case study of the.. Journal of Management Information Systems, 14(1): 69.

Teng, C, James T., Cheon, Joong, Myun, Grover, & Varun. 1995. Decisions to outsource information systems functions: Testin. Decision Sciences, 26(1): 75.

Tillquist, John, King, John L., & Woo, Carson. 2002. A representational scheme for analyzing information technology and organizational dependency. MIS Quarterly, 26(2): 91.

Ying-Pin, Yeh. 2005. Identification of factors affecting continuity of cooperative electronic supply chain relationships; empirical case of the Taiwanese motor industry. Supply Chain Managemen: An International Journal, 10(4): 327-335.

Zacharia, Zach G., & Mentzer, John T. 2004. Logistics salience in a changing environment. Journal of Business Logistics, 25(1): 187.

Links from this theory to other theories

Resource-based view of the firm, Transaction cost economics, Knowledge-based theory of the firm, Social exchange theory, Ecology theory

External links

http://faculty.babson.edu/krollag/org_site/org_theory/theory_index/resource_dep.html, site included a discussion on RDT

Original Contributor(s)

Hamid Akbari

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