Resource Dependency Theory - Explained
What is Resource Dependency Theory?
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What is Resource Dependency Theory?
Resource Dependency Theory, proposed by Pfeffer and Salancik (1978), explains how organizational behavior is affected by external resources.
Firms change their external environment to secure access to the resources they need to survive. This means that a firm’s competitiveness is determined by the way they deal with their external resources.
While the resource-based view of the firm is concerned with the management of a firm’s internal resources and capabilities, resource dependence theory, there is a focus on external parties, such as suppliers.
What are the Premises of Dependency Theory?
The premises of resource dependence theory can be summarized as follows:
- Organizations respond to the demands of elements in the environment that control critical resources.
- These resources ultimately originate from an organization’s environment.
- The environment, to a considerable extent, contains other organizations.
- The resources needed by a particular organization are therefore often in the hands of other organizations.
- Resources are a basis of power.
- Legally independent organizations can therefore depend on each other.
- Power and resource dependence are directly linked. For example, organization A’s power over organization B is equal to organization B’s dependence on organization A’s resources.
- Power is relational. In other words, it concerns how different organizations are connected.
- Power is also situational. In order words, it is dependent on what is happening at a particular time.
- Power is potentially mutual, so organizations may be reliant on each other to possess it.
- Managers attempt to manage their external dependencies to ensure survival and acquire more autonomy.
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