Resource dependence theory

The resource dependence approach (English resource- dependence theory ) has its roots in the classical systems theory, behavioral organization theory and social exchange theory. It is an approach to the analysis of system-environment relations and strategies of business organizations. Although this approach has been considered in the military strategy early on, it appears only in the late 1970s in economics. Leading theorists were Jeffrey Pfeffer and Jay Barney.

Survey

The approach focuses on one aspect of the market structure approach by Michael E. Porter, who considered the dependence of the suppliers of an industry and its powerful position as one of several factors relevant to competition in its structure analysis. The resource dependence approach examines the input (inputs), a company needs to meet the set targets. It may be raw material, capital, energy, water, but also non-material resources such as locations, manpower, knowledge and patents. These resources the organization competes with consumers from the same or from other industries that have not been considered in the Porter 's analysis. Thus the autonomy of an organization is threatened and they will try to defend this autonomy.

The strength of the dependence is an essential determinant of the behavior of an organization. For example, the energy consumption of a plant can be ignored when the energy price is low and stable. In such an environment, investments for savings are not worth, because this would result in comparison with competitors at a higher cost. The strength of the dependence is determined

  • From the relative proportion of the resource to the inputs and outputs of the organization.
  • Of that from the independence that controls the resource. Independence means unrestricted access and freedom of choice in the distribution. Dependence means limited access and restrictions in the distribution.
  • From the market position of the controlling unit, which is commercially can a monopoly or a different market structure. Non- substitutable resources increase the dependency.

These factors limit the autonomy of an organization.

As a strategic starting points for a design of the dependency relationship Pepper calls the following three options:

  • Adjust or remove the restrictions, eg through stock education, search for further resources owners or integration of resources source (such as in -sourcing of key resources, mergers or diversification)
  • The environment to influence by, for example, Supervisory Board members work in both organizations, joint ventures, industry organizations, interest groups, etc., founded or resource sharing within a supply takes place
  • By changing the legal situation with the help of political activities, lobbying and legislation (eg reduction of the monopoly or concentration of the resource owner ).

The same forces act but to all organizations in the environment, so that they are also trying to influence other organizations providing critical resources.

Assumptions in the overview

  • Organizations have limited resources see exposed
  • Organizations can obtain the needed resources through the exchange of other organizations
  • The facts that organizations are dependent on resources from other companies, reducing their autonomy
  • On the other hand, organizations are trying to preserve their autonomy by developing inter-organizational relationships that compensate for the loss of autonomy
  • Driving forces of evolution are avoidance, utilization and development of dependencies
  • Dependencies increase with criticality of resources and fall with the substitution rate
  • Resources are policy instruments and lead to power struggles and conflicts ( unlike Kontingenztheorien, the power plays hide )
  • Rationality of management
  • Vertical ( transactional)
  • Horizontal ( competitive)

If we fail to preserve the autonomy to develop organizations different strategies to control the behavior of the organizations of which they depend:

  • Integration
  • Cooperation
  • Cooptation
  • Concluding long-term contracts
  • Joint Venture
  • Third -party intervention

Networks help participating companies to minimize external dependencies under the division of labor points. By controlling additional resources gains can be achieved without take ownership and responsibility. Costs of the agreement are compared to additional profits. The price for membership in networks - giving up a part of autonomy (to reduce the dependence on the environment, costs of the agreement are smaller in networks, as in the market). There arises a tension between autonomy and dependence on the organization that controls over vital resources.

Limits / problems

The approach considers only dyadic relations from the perspective of each of a company. Difficulties arise in the analysis of system networks. The assumption of rational management is problematic. Efficiency and cost considerations are neglected.

Behaviorism Michael Porter Co-option Derek S. Pugh Stewart Clegg
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