Resource dependency approach

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The resource dependence theory (Engl. Resource-dependence theory ) has its roots in classical systems theory , behavioral organizational theory and social exchange theory . It is an approach to the analysis of system-environment relationships and strategies of business organizations. Although this approach was considered early on in military strategy, it did not appear in economics until the late 1970s. The leading theorists were Jeffrey Pfeffer and Jay Barney .

Overview

The approach focuses on one aspect of Michael E. Porter's view of the market structure , who in his structural analysis considers the dependence on the suppliers of an industry and their position of power as one of several competition-relevant factors. The resource dependency approach examines the inputs that a company needs to meet the goals it has set itself. This can be raw material, capital, energy, water, but also non-material resources such as locations, labor, knowledge and patents. The organization competes for these resources with consumers from the same, but also from other industries, which were not taken into account in Porter's analysis. This threatens the autonomy of an organization and it will try to defend this autonomy.

The strength of the dependency is an essential determinant for the behavior of an organization. For example, a plant's energy consumption can be ignored when the energy price is stable and low. In such an environment, it is not worth investing in savings, as these would lead to higher costs compared to competitors. The strength of the dependency is determined

  • from the relative share of the resource in the inputs and outputs of the organization.
  • from the independence of whoever controls the resource. Independence means unrestricted access and freedom of choice in distribution. Dependency means limited access and restrictions on distribution.
  • from the market position of the controlling unit, which can be a monopoly or another market structure. Non-substitutable resources increase dependency.

These factors limit the autonomy of an organization.

Pfeffer names the following three options as strategic starting points for designing the dependency relationship:

  • adapt or remove the restrictions, e.g. B. through inventory, search for further resource owners or integration of the resource source ( e.g. through insourcing of important resources, mergers or diversification )
  • to influence the environment by z. B. Supervisory Board members work in two organizations, joint ventures , industrial organizations, interest groups are set up, etc., or a resource sharing within a supply chain takes place
  • by changing the legal situation with the help of political activities, lobbying and legislation (e.g. dismantling of the monopoly or the concentration of resource owners).

However, the same constraints affect all organizations in the environment, so that they will also try to influence other organizations that provide the critical resources.

Assumptions in the overview

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Resources
  • Organizations face scarce resources .
  • Organizations can get the resources they need through exchanges from other organizations.
  • The fact that organizations are dependent on the resources of other companies reduces their autonomy.
  • On the other hand, organizations try to preserve their autonomy by developing inter-organizational relationships that compensate for the loss of autonomy.
  • The driving forces of evolution are avoidance, exploitation and development of dependencies.
  • The dependencies increase with the decrease in resource availability and decrease with their substitution rate.
  • Resources are political instruments and lead to power games and conflicts (in contrast to contingency theories , which cover up power games).
  • Rationality of management
Dependencies
  • vertical (transactional)
  • horizontal (competitive)
Control strategies

If autonomy is not maintained, organizations develop various strategies to influence the behavior of the organizations on which they depend:

Networks help participating companies to minimize external dependencies under work-sharing points. By controlling additional resources, profits can be made without taking ownership and responsibility. Costs of the agreement are compared with additional profits. The price of membership in networks - the abandonment of part of the autonomy (to reduce dependence on the environment, the cost of the agreement is smaller in networks than in the market). A tension arises between autonomy and dependence on the organization that controls vital resources.

Limits / problems

The approach only looks at dyadic relationships from the perspective of one company at a time. Difficulties arise when analyzing system networks. The assumption of rational management is problematic. Efficiency and cost considerations are neglected.

Individual evidence

  1. ↑ a b c d e Derek S. Pugh & David J. Hickson (1996) Writers on Organization, Penguin Books, London
  2. ↑ Jeffrey Pfeffer & Gerald R. Salancik (1978): The external control of organizations. new York
  3. ↑ Jay B. Barney and William Hesterly (1996): Organizational Economics: Understanding the Relationship between Organizations and Economic Analysis. In: Stewart R. Clegg , Cynthia Hardy, and Walter Nord (Eds.): Handbook of Organizational Studies . London, Thousand Oaks, New Delhi: Sage

literature

  • Jeffrey Pfeffer & Gerald R. Salancik (1978): The external control of organizations. new York