Resource Dependence Theory
Resource Dependence Theory
Resource dependence theory determines how the external resources of an organization affect its behavior. Procuring external resources is essential for strategic and tactical management of an organization. The theory assumes that an organization depends on resources that come from its environment. The environment has other organization. Hence, the resources an organization needs are found in other organization. Resources are a source of power. Independent organizations can rely on each other. Power and resources dependence are connected. Power is relational, situational and mutual.
The resources include capital, labor, raw material among others (Collins, Withers & Hillman, 2009). On the other hand, the structural contingency theory explains the relationship between contingency in organizations and organizational structures. Contingency change causes a change in organizational structures (Graetz & Smith, 2011). In addition, the theory enables organizations to fit structures to contingency that affects the organization performance positively. The structural contingency theory helps one understand why organizations change their structures in order to change the contingency.
Therefore, the structural contingency theory and resource dependence differ as the structural contingency theory focuses structural and contingency change. The resource dependence theory focuses on dependence of resources in organizations. Organizations can minimize environmental interdependence and uncertainty through various ways. They can use mergers, joint ventures and political actions to reduce dependence on the environment. They can also use executive succession and the board of directors to minimize dependence on the environment (Tizian & Julie, 2012).
The structural contingency theory is the most effective in building organizational change and sustaining it. The theory enables organizations to adapt to their environment. Organizations respond to environmental changes like innovation in order to survive and succeed. There are various contingencies in the organization. The contingencies are either internal or external. The internal contingency consists of factors related to uncertainty of task and interdependence of the task.
In addition, size is an internal contingency. Environmental uncertainty is an external contingency. The outside contingencies affect the internal contingencies and shape the organizational structure. For example, uncertainty in the environment can affect task uncertainty and hence cause the organization to adopt an organic structure. The organizational structure is caused by the need for the organization to fit to the environment by fitting the internal contingencies (Lutans, 2011).
Therefore, contingencies like technology, innovation, change in technology and environment affect internal contingencies and force an organization to change its structure to fit to the environment. Changing the organizational structures brings change and enables the organization to sustain change. This is because the organization adopts an organizational structure that enables it to adapt to change in the environment. The structural contingence theory was important in sustaining stability in the organization.
The structural contingency theory ensures organizations adapt to changes in the environment and remain stable. The organization’s environment can be dynamic or statistic. A dynamic environment experiences rapid changes and a statistic environment experiences little change. The type of organization environment determines sustaining stability in the organization. Organizations having dynamic environment find it hard to sustain stability unlike those with statistic environment (Daft, 2009).
Intra organizational relationships are common in resource dependence theory as they enable organizations get resources they need. The organizations can establish relationships with other organizations to get resources. They can also minimize their dependence or increase their dependence of other organizations on them. Moreover, intra organizational relationships are common in structural contingency theory. The relationships are evidenced between contingencies in the environment and structures. The external contingence can affect internal contingence and cause structural change (Donaldson, 2001).
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