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Resource dependence theory

Resource dependence theory (RDT) is an influential framework in organizational studies that explains how organizations, as open systems, depend on external entities for critical resources such as materials, information, and capital, and strategically manage these dependencies to minimize uncertainty and enhance survival.^[1] Introduced by Jeffrey Pfeffer and Gerald R. Salancik in their seminal 1978 book The External Control of Organizations: A Resource Dependence Perspective, the theory emphasizes that no organization can be entirely self-sufficient, leading to power imbalances where entities controlling vital resources exert influence over dependent actors.^[2] At its core, RDT rests on three key assumptions: organizations face environmental uncertainty due to resource scarcity; they engage in behaviors to understand and control this uncertainty; and power accrues to those who manage dependencies effectively, often through interorganizational relationships.^[1] Pfeffer and Salancik outlined specific propositions for managing dependence, including mergers and acquisitions to internalize resources, joint ventures and alliances to share risks, co-optation via board interlocks to influence suppliers, political lobbying to shape regulations, and executive succession to align leadership with resource needs. These strategies highlight how organizations actively negotiate their external constraints rather than passively adapting, shifting focus from internal efficiencies to environmental contingencies.^[3] RDT has profoundly shaped fields like strategic management, corporate governance, and supply chain analysis, with applications in explaining phenomena such as board composition for resource access and multinational firms' alliances in uncertain markets.^[1] For instance, it informs green supply chain management by viewing supplier relationships as mechanisms to secure sustainable resources amid regulatory pressures.^[4] While the theory has faced critiques for underemphasizing internal factors or socially constructed power dynamics, its enduring impact—evidenced by over 48,000 citations of the foundational work—underscores its role in understanding organizational power and interdependence.^[5]^[2]

Introduction and Foundations

Definition and Core Assumptions

Resource dependence theory (RDT) is a framework in organizational studies that explains how organizations manage their dependencies on external resources to ensure survival and goal attainment. It posits that organizations function as open systems that exchange materials, information, and support with their environments, rendering them inherently interdependent rather than self-sufficient.^[6]^[7] At its core, RDT rests on several key assumptions about organizational behavior and environmental constraints. First, organizations rely on external entities—such as suppliers, customers, regulators, or competitors—for critical resources essential to operations, which introduces vulnerability. Second, this reliance generates uncertainty due to the unpredictable availability or control of those resources by others, often leading to power imbalances where resource controllers exert influence. Third, organizational actions are predominantly directed toward acquiring, securing, and controlling these resources to mitigate risks and enhance autonomy, as organizations seek to minimize dependence while maximizing their own leverage over others.^[8]^[6]^[7] The open systems perspective underpinning RDT emphasizes that no organization can operate in isolation; instead, it must continually engage in resource exchanges with its ecology, fostering interdependencies that shape strategic decisions. This view highlights the ecological context of organizational behavior, asserting that "to understand the behavior of an organization you must understand the context of that behavior—that is, the ecology of the organization." The foundational text articulating these ideas is The External Control of Organizations: A Resource Dependence Perspective by Jeffrey Pfeffer and Gerald R. Salancik, which encapsulates the central tenet that "organizations attempt to minimize dependence on other organizations."^[9]^[6]

Historical Development

Resource dependence theory (RDT) emerged in the 1970s amid growing critiques of closed-system views in organizational theory, which portrayed organizations as self-contained entities insulated from external influences. Instead, RDT positioned organizations as open systems embedded in interdependent environments, drawing heavily from systems theory and contingency approaches that stressed adaptation to external uncertainties. This shift was influenced by earlier works emphasizing environmental contingencies, such as James D. Thompson's 1967 analysis in Organizations in Action, which explored how organizations manage technological and environmental uncertainties through structural arrangements.^[10]^[11] The theory's intellectual roots trace back to foundational ideas in social exchange and power dynamics, particularly Richard M. Emerson's 1962 principles of power-dependence relations, which argued that one actor's power over another derives from the latter's dependence on resources controlled by the former. Pfeffer and Salancik built on these concepts to extend them to organizational contexts, highlighting how resource flows create imbalances and compel strategic responses. Jeffrey Pfeffer and Gerald R. Salancik emerged as the primary developers, formalizing RDT in their seminal 1978 book The External Control of Organizations: A Resource Dependence Perspective, which systematically outlined the theory's core arguments on environmental constraints, power imbalances, and tactics for managing dependence.^[10]^[12] During the 1980s, RDT experienced significant expansion through its integration into strategic management research, with applications to phenomena such as mergers, joint ventures, alliances, and board interlocks as mechanisms for mitigating resource uncertainties. This period marked RDT's growing versatility in explaining interorganizational strategies beyond initial theoretical formulations. A key milestone came in 2009 with Amy J. Hillman, Michael C. Withers, and Brian J. Collins's comprehensive review, which evaluated RDT's conceptual maturation, empirical validations, and interdisciplinary impact, affirming its role as a cornerstone of organizational studies.^[13] Post-2010 developments saw RDT increasingly applied to global and dynamic contexts, including supply chain interdependencies and multinational collaborations, reflecting heightened awareness of volatile resource environments. Bibliometric analyses up to 2025 indicate a robust growth trajectory, with an annual publication increase of over 11% since the mid-1990s and a surge in focus on firm performance outcomes. Recent scholarship has particularly emphasized RDT's utility in crisis response, as seen in 2020–2023 studies applying the theory to COVID-19 disruptions, where organizations navigated resource scarcities through stakeholder engagements and adaptive alliances.^[14]^[14]^[15]

Theoretical Framework

View of Organizations

Resource dependence theory (RDT) conceptualizes organizations as open systems inherently intertwined with their external environments, where survival hinges on acquiring essential resources from outside entities. Unlike self-sufficient entities, organizations maintain permeable boundaries that facilitate the inflow and outflow of resources such as materials, information, and capital, allowing external influences to permeate internal structures and processes. These boundaries are not rigidly defined but are dynamically negotiated through ongoing interactions with suppliers, customers, regulators, and other stakeholders to mitigate vulnerabilities arising from resource scarcity. This perspective underscores that organizational form and function are shaped by the imperative to manage these exchanges, as isolation from the environment would render an organization incapable of sustaining operations.^[12]^[13] In RDT, organizational effectiveness is evaluated not solely by internal operational efficiency or goal attainment in isolation, but by the organization's capacity to secure critical resources and minimize uncertainty stemming from environmental dependencies. Success is thus measured by the ability to adapt structures and behaviors to external constraints, ensuring a steady resource supply that supports long-term viability. For instance, firms that forge alliances or diversify suppliers to buffer against disruptions demonstrate higher effectiveness under this lens, as these actions directly enhance resource control and stability. This resource-oriented metric contrasts with traditional views that prioritize internal metrics like productivity, emphasizing instead the external orchestration required for endurance in competitive ecosystems.^[12]^[13] RDT explicitly rejects closed-system perspectives, which portray organizations as autonomous and self-regulating units insulated from external forces, arguing instead that such isolation is illusory and detrimental to survival. In closed-system models, internal processes alone dictate outcomes, but RDT posits that external dependencies—ranging from market fluctuations to regulatory pressures—fundamentally drive organizational adaptation, structure, and goal achievement. This open-system orientation highlights how environmental interdependencies compel organizations to evolve continuously, rendering static, inward-focused designs inadequate for real-world contingencies.^[12]^[13] The theory's implications extend to decision-making, where managers prioritize strategies that bolster resource control over purely rational, efficiency-driven choices, often resulting in political behaviors within the organization. Executives may engage in coalition-building, bargaining, or symbolic actions to align internal decisions with external imperatives, such as appointing board members with key connections to secure funding or influence. This politicized approach reflects the reality that resource scarcity fosters power struggles, where decisions serve to reduce dependence rather than optimize abstract rationality, thereby embedding power dynamics as a core element of organizational governance.^[12]^[13]

Sources of Resource Dependence

Resource dependence between organizations and their environments primarily stems from the necessity of exchanging critical resources essential for survival and operations. Organizations rely on external entities for inputs such as raw materials, financial capital, labor, information, and even social legitimacy, which cannot be fully produced internally. When these resources are vital, the dependent organization faces constraints on its autonomy, as interruptions in supply can threaten functionality. This exchange dynamic underscores how environmental interdependence generates vulnerability, particularly when resources are indispensable for core activities.^[16] A key factor amplifying dependence is the importance of the resource to the organization, measured by the extent to which its absence would impair operations or survival. For instance, a manufacturing firm heavily reliant on a specific raw material experiences heightened dependence if that input is crucial for production, limiting alternatives and increasing exposure to supplier decisions. Pfeffer and Salancik emphasize that "criticality measures the ability of the organization to continue functioning in the absence of the resource."^[16] Similarly, resources like capital from investors or legitimacy from regulatory bodies become pivotal when they underpin long-term viability. Another source is the concentration of resource control, where dependence intensifies if a resource is held by a limited number of suppliers or entities. High concentration reduces options for the dependent organization, as power over the resource becomes centralized, often leading to asymmetrical relationships. As noted, "concentration of resources means above all concentration of power," making it difficult for organizations to diversify sources without significant effort.^[16] For example, the rare earth minerals industry, where China accounted for approximately 70% of global production in 2023, illustrates this dynamic, with a few actors able to dictate terms.^[17] Dependence is further exacerbated by the discretion that resource controllers exercise over allocation and withholding. When suppliers have substantial latitude to decide terms, timing, or availability, uncertainty rises for the dependent party, compelling reactive behaviors. This discretion directly influences the degree of constraint imposed on the organization.^[16] Additionally, scarcity of resources plays a crucial role, as limited availability heightens competition and negotiation pressures, amplifying overall dependence regardless of control structures. Limited supplies of essential resources, such as specialized technology or skilled talent in niche sectors, force organizations to vie intensely, often at the cost of autonomy.^[16] These factors collectively shape the boundaries of organizational exchanges, blurring internal and external distinctions in resource flows.

Key Propositions

Power and Uncertainty in Dependence

In resource dependence theory, the core proposition posits that power resides with the party that controls resources essential to the dependent party, formalized as the power of actor A over actor B equaling the dependence of B on A. This relationship stems from the idea that organizations exert influence over others to the degree that they can provide or withhold valued resources, thereby shaping the dependent party's behavior to ensure resource continuity. Pfeffer and Salancik emphasize that such power dynamics arise directly from the necessity of resources for organizational survival and effectiveness, making dependence a relational construct where control over critical inputs translates into leverage. Dependence inherently generates uncertainty for the reliant organization, as the availability, timing, and terms of resource access remain unpredictable without stabilizing mechanisms. This uncertainty motivates dependent actors to tolerate or accommodate the demands of resource controllers, as disruptions in supply could jeopardize operations and goal attainment. The theory highlights that higher levels of dependence amplify this uncertainty, particularly when resources are concentrated among few providers, compelling the dependent party to prioritize relational stability over autonomy. External attempts at control succeed when the influencing party holds sway over indispensable resources, enabling tactics ranging from direct coercion—such as threats to withhold supplies—to subtler persuasion that aligns the dependent party's actions with the controller's interests. In these scenarios, the dependent organization often yields to external pressures to mitigate risks, as the cost of resistance outweighs potential benefits. This dynamic underscores the theory's view that power imbalances are not static but emerge from the strategic importance of controlled resources in the exchange. Asymmetry in interorganizational relations further entrenches these power imbalances, where one party's greater dependence grants the other enhanced bargaining power, often leading to compliance, adaptation, or even structural changes in the dependent entity. For instance, a firm heavily reliant on a single supplier may concede to unfavorable contract terms to secure ongoing access, illustrating how uneven dependence fosters deference and influence. This proposition explains why organizations in lopsided relationships frequently prioritize placating the powerful actor to preserve resource flows essential for functioning.

Strategies for Managing Dependence

Organizations employ strategies to manage resource dependence primarily to mitigate power imbalances arising from asymmetric control over critical resources.^[13] Internal strategies focus on reducing external reliance through organizational adjustments within the firm. Building buffers involves stockpiling resources or creating slack to insulate the organization's technical core from environmental fluctuations and uncertainties.^[7] This approach allows firms to maintain operations during supply disruptions without immediate dependence on external providers.^[6] External strategies seek to alter the organizational environment or interdependencies directly. Acquisitions, mergers, and alliances enable firms to internalize dependencies by gaining control over or sharing access to vital resources with other entities.^[6] Vertical integration specifically targets absorption of suppliers or customers to secure resource flows and reduce uncertainty in exchange relationships.^[7] Bridging strategies, such as forming joint ventures, strategic alliances, or board interlocks for co-optation, establish external linkages to influence resource providers and stabilize supply.^[13] Political actions, such as lobbying for favorable regulations, allow organizations to influence the institutional environment and shape resource availability to their advantage.^[13] Executive succession can align leadership with resource needs, facilitating better management of dependencies.^[13] Diversification serves as a complementary tactic by broadening the resource base through seeking alternative suppliers or markets, thereby diluting concentration risks from any single dependency.^[6] A key proposition in resource dependence theory holds that the effectiveness of these strategies hinges on a cost-benefit analysis, weighing the reduction in dependence against the implementation and maintenance costs.^[13]

Applications

Interorganizational Arrangements

Resource dependence theory (RDT) posits that organizations engage in interorganizational arrangements to manage external dependencies on critical resources, thereby reducing uncertainty and enhancing control over their environments. These arrangements allow firms to pool, share, or integrate resources without solely relying on market mechanisms, which can be inefficient or unpredictable. By forming such ties, organizations can balance power imbalances and secure stable access to inputs like technology, capital, or markets.^[18]^[13] Mergers and acquisitions represent a key strategy in RDT for directly combining resource pools to mitigate dependence. Horizontal mergers occur between competitors to consolidate market power and reduce rivalry over shared resources, such as customer bases or distribution channels, thereby stabilizing revenue streams. Vertical mergers, in contrast, integrate supply chain stages to gain control over upstream suppliers or downstream buyers, minimizing disruptions from fluctuating input availability or demand. According to Pfeffer and Salancik, these actions extend organizational boundaries to internalize dependencies that would otherwise expose firms to external uncertainties. Empirical meta-analyses confirm that resource dependencies positively predict merger activity, as firms seek greater autonomy through integration.^[18] Strategic alliances and joint ventures offer collaborative alternatives to full mergers, enabling organizations to share resources while retaining independence. Alliances involve non-equity agreements for mutual resource exchange, such as technology transfers or market access, which help balance dependencies without the risks of complete integration. Joint ventures, as equity-based partnerships, allow co-investment in shared facilities or projects to jointly manage scarce resources like specialized knowledge or infrastructure. RDT views these as responses to mutual interdependence, where firms collaborate to enhance legitimacy and access complementary assets. Research syntheses indicate that higher dependence levels correlate with increased formation of such arrangements, particularly when full ownership is costly or regulated.^[13]^[18] Board interlocks serve as a subtler mechanism in RDT, where directors from one organization join another's board to facilitate information flow, resource exchanges, and dependency monitoring. These overlapping memberships co-opt influential actors from dependent entities, reducing uncertainty by aligning interests and enabling informal coordination. Pfeffer argued that interlocks are particularly useful for accessing environmental resources indirectly, such as regulatory insights or supplier networks, without formal commitments. Studies applying RDT show that firms in resource-scarce environments use interlocks to build trust and negotiate favorable terms, enhancing overall stability.^[13] In practice, technology firms exemplify RDT through alliances for R&D resources; for instance, collaborations among semiconductor companies pool expertise and funding to counter high development costs and rapid obsolescence, as seen in industry consortia that share intellectual property to manage technological dependencies. Similarly, in the energy sector, mergers like those between oil majors aim to secure supply stability by integrating upstream exploration with downstream refining, reducing vulnerability to volatile commodity prices and geopolitical risks. These arrangements illustrate how RDT principles guide interorganizational tactics to safeguard critical resource flows.^[19]^[18]

Internal Organizational Dynamics

Resource dependence theory (RDT) posits that external dependencies shape internal organizational structures and processes, as organizations adapt internally to secure critical resources and mitigate uncertainty. Within firms, these dynamics manifest through mechanisms that align internal incentives and authority with the demands of the external environment, ensuring survival amid resource scarcity. Pfeffer and Salancik's foundational work emphasizes that internal arrangements, such as power allocation and governance, emerge as responses to environmental contingencies rather than solely internal efficiencies.^[6] Executive compensation in RDT is structured to incentivize leaders to effectively manage resource dependencies, tying pay to outcomes like successful acquisition of external inputs or navigation of uncertainties. For instance, compensation packages often reward CEOs for strategic decisions that reduce firm vulnerability to suppliers or markets, aligning personal incentives with organizational dependence management goals. This approach reflects RDT's view that executives' roles extend beyond oversight to actively brokering external ties, with empirical studies showing higher pay linked to international expansion efforts that diversify resource access.^[13]^[20] The board of directors plays a pivotal role in RDT by providing access to external resources, legitimacy, and networks that buffer the organization from dependence risks. Boards are composed strategically to include members with connections to key stakeholders, such as suppliers or regulators, thereby reducing uncertainty through co-optation and information flows. Research applying RDT highlights that board composition reflects environmental interdependence, with diverse expertise enhancing resource provision and stabilizing internal governance amid external pressures.^[21]^[16] Internal power distribution under RDT favors subunits or departments that control links to critical external resources, granting them disproportionate influence within the organization. For example, procurement or R&D departments gain authority when they manage vital inputs like raw materials or technology amid supply volatility, as they directly address the firm's dependence problems. This power accrual is a core proposition in RDT, where subunits most effective at coping with environmental uncertainties—such as marketing in turbulent markets—secure greater budgets and decision rights to perpetuate their role. Empirical analyses of firms confirm that resource-controlling units receive enhanced internal allocations, reinforcing their dominance.^[16]^[6] Organizational structure adaptations in RDT involve configuring hierarchies to facilitate rapid responses to high-dependence environments, often favoring centralization for coordinated resource decisions. In contexts of acute uncertainty, such as volatile industries, firms centralize authority at the top to streamline negotiations with external actors and minimize internal conflicts over scarce resources. This structural shift enables quicker adaptation to dependence shifts, as top management consolidates control over critical linkages, drawing from RDT's emphasis on environmental imperatives shaping internal design.^[13]

Sector-Specific Uses

In non-profit organizations, resource dependence theory elucidates how reliance on donors and grants creates vulnerabilities such as revenue volatility and goal displacement, prompting strategic adaptations to maintain organizational stability. For instance, private contributions often exhibit high fluctuations, leading nonprofits to alter mission priorities to align with donor preferences. Government grants can impose constraints through program shifts required for compliance. To mitigate these dependencies, nonprofits pursue diversification of funding sources, such as incorporating commercial activities like gift shops in museums. Partnerships with governments further enhance resource stability, allowing nonprofits to balance autonomy with external control through discretionary reporting and mission-aligned negotiations.^[22]^[23] In the public sector, resource dependence theory highlights how organizations navigate dependencies on political actors for budgetary allocations to reduce uncertainty and secure essential resources. Organizations often face power asymmetries with funding bodies, where threats of budget cuts enforce policy adherence, such as quality standards in service delivery. For example, in quasi-markets like private prisons, governments use funding mechanisms to impose social goals, impacting operational efficiency. This approach aligns with the theory's emphasis on interorganizational strategies to manage environmental contingencies, enabling entities to maintain operational efficacy without fully ceding control to political overseers.^[24] Healthcare organizations, particularly hospitals, apply resource dependence theory to address scarcities in critical inputs like reimbursement funds amid pressures such as workforce shortages and bureaucratic hurdles. Hospitals in regions like the Cologne metropolitan area report high dependency on external resources, with 68.4% to 92.9% utilizing outsourcing or external staffing to cope.^[25] These strategies mitigate uncertainty by securing necessary inputs for service continuity.^[25] In education, universities leverage the theory to manage funding dependencies, increasingly forging ties with industry for research grants as public appropriations decline. Public higher education institutions, facing revenue mixes that include federal and state sources comprising about 34% of total revenue as of 2017, diversify through industry partnerships to support graduate programs and innovation, adjusting expenditures to match these external sources and reduce reliance on tuition or state budgets.^[26]^[27] Emerging applications of resource dependence theory extend to supply chains in global trade, where firms in developing sectors grapple with dependencies on multinational suppliers for vital inputs like technology and materials. These firms, often embedded in asymmetric relationships, employ strategies such as joint ventures and alliances to manage locational and interorganizational uncertainties, as evidenced in cross-border supply chain integrations over the past four decades. For instance, multinational corporations in global value chains influence subsidiary behaviors through resource control, prompting developing-sector entities to pursue political actions or mergers to enhance bargaining power and sustain competitiveness. This framework underscores how macro-environmental factors shape dependence outcomes, enabling firms to transform vulnerabilities into strategic advantages in international trade networks.

Empirical Evidence and Criticisms

Major Empirical Studies

One of the foundational empirical contributions to resource dependence theory (RDT) came from Pfeffer and Salancik's analysis of university departments, where they demonstrated that control over critical resources, such as budgets and student enrollments, significantly predicts departmental power and influence within the organization. Using data from a large midwestern university, their study showed that departments with greater resource autonomy exerted more sway over administrative decisions, supporting RDT's core tenet that resource control shapes power dynamics.^[16] In the 1980s, several studies extended RDT to board interlocks, revealing correlations between interorganizational ties and access to vital resources. For instance, Mizruchi and Stearns (1988) conducted a longitudinal analysis of U.S. firms, finding that companies dependent on external financing formed more interlocks with financial institutions, thereby securing capital and reducing uncertainty. These interlocks were shown to facilitate resource flows, with firms exhibiting higher dependence on banks or investors displaying denser network connections that enhanced strategic stability.^[6] A comprehensive mid-period review by Hillman, Withers, and Collins (2009) synthesized empirical evidence across multiple domains, confirming RDT's explanatory power for interorganizational arrangements like alliances and corporate governance mechanisms. Their assessment of studies on mergers, joint ventures, and board compositions indicated robust support for RDT, particularly in how organizations use governance structures to manage dependencies, outperforming alternative theories like agency theory in predictive accuracy for board-related outcomes.^[6] Recent research has applied RDT to crisis contexts, such as the COVID-19 pandemic, linking ownership structures to firm resilience and survival. A 2025 study by Ahsan, Mustapha, and Mustapha analyzed data from over 55,000 small and medium-sized enterprises across 44 countries, finding that state and parental ownership significantly improved sales and employment growth during the pandemic by providing access to critical resources like subsidies and networks, while foreign ownership showed no such effect.^[28] This regression-based analysis highlighted how ownership buffers resource uncertainties in turbulent environments, with effects amplified in regions with weaker institutional governance.^[29] Bibliometric analyses from 2023 to 2025 underscore the theory's enduring impact on firm performance research, with one 2025 study reviewing 174 publications from 1995 to 2024 and documenting an 11.52% annual growth rate in RDT-related outputs, particularly in themes like supply chain dependencies and strategic alliances. These trends indicate RDT's increasing relevance for explaining performance through dependence reduction strategies, with emerging focus on interorganizational collaborations driving recent scholarly expansion.^[30] Empirical studies in RDT primarily utilize quantitative methodologies, such as regression models on dependence measures like resource concentration and interlock density, to test relationships between environmental uncertainties and organizational responses.^[6] Complementary qualitative approaches, including case studies of mergers, provide deeper insights into strategic maneuvers, as seen in analyses of acquisition processes where firms coalesce to consolidate scarce resources.^[14]

Criticisms and Limitations

One key criticism of resource dependence theory (RDT) is its overemphasis on external environmental factors at the expense of internal organizational capabilities and agency. Critics argue that RDT underappreciates how firms' unique internal resources, as emphasized in the resource-based view, can mitigate dependencies and drive strategic actions independently of external pressures.^[13] This external focus leads to an incomplete explanation of organizational behavior, particularly in contexts where internal innovation or resource bundling plays a pivotal role in reducing vulnerability.^[6] RDT has also been faulted for its inadequate handling of uncertainty, especially in dynamic or rapidly changing environments. The theory posits that organizations seek to minimize uncertainty through dependence-management strategies, but it fails to fully account for subjective perceptions of dependence or the pace of environmental shifts, such as technological disruptions, which can alter resource valuations unpredictably.^[16] Ambiguities in distinguishing power imbalances from mutual dependence further complicate predictions about uncertainty reduction, as these dimensions can produce opposing effects on organizational responses.^[31] Additionally, RDT exhibits a materialistic bias by treating resources in predominantly objective, tangible terms, thereby neglecting social, cultural, or symbolic dimensions of dependence. This approach overlooks how power relations are socially constructed through norms, values, and cognitive interpretations rather than solely material exchanges, limiting the theory's explanatory power in contexts involving intangible assets like legitimacy or reputation.^[16] The theory's scope is limited in non-market sectors, such as nonprofits or public organizations, and emerging digital economies, where traditional resource exchanges are less dominant and network effects or data flows introduce novel dependencies. In these areas, RDT proves less effective without integration with complementary frameworks like institutional theory to address hybrid or intangible dependencies.^[13] In response to these critiques, recent extensions in the 2020s have incorporated multi-level analyses that bridge micro-level cognition and agency with macro-level environmental factors, enhancing RDT's applicability to global and networked contexts. These developments emphasize dynamic, perceptual elements of dependence and advocate for hybrid models that balance external and internal perspectives.^[32]

Resource-Based View

The Resource-Based View (RBV) is a strategic management framework that posits firms gain sustained competitive advantage by leveraging internal, firm-specific resources and capabilities that are valuable, rare, inimitable, and non-substitutable (VRIN). Developed primarily by Jay Barney, this perspective shifts focus from external market positioning to the unique bundle of assets within the organization, arguing that these resources enable superior performance when they meet the VRIN criteria and are effectively deployed. Unlike broader environmental analyses, RBV treats resources as the primary drivers of heterogeneity among firms, emphasizing their role in creating barriers to imitation and long-term value generation.^[33] In comparison to Resource Dependence Theory (RDT), RBV adopts an inward-looking orientation, prioritizing the development and protection of inimitable internal assets to achieve enduring advantage, whereas RDT highlights external interdependencies, power asymmetries, and uncertainty stemming from reliance on environmental resources controlled by other actors. This divergence underscores RBV's assumption of resource ownership and control within the firm, contrasting with RDT's emphasis on managing vulnerabilities through political and structural mechanisms like alliances or mergers. Such differences position RBV as complementary to RDT, as the former explains value creation from possessed resources, while the latter addresses acquisition and safeguarding amid external constraints. RDT complements RBV by elucidating how organizations secure the critical resources underpinning VRIN attributes via dependence-reducing strategies, such as board interlocks or joint ventures, thereby bridging internal capabilities with external sourcing dynamics. Research in the 2000s began developing hybrid models that integrate these theories, incorporating RDT's environmental contingencies into RBV's resource orchestration to better model firm performance in uncertain contexts; for instance, dynamic capabilities frameworks extended RBV to include RDT-inspired adaptations for resource recombination through networks. These integrations reveal that even VRIN resources, like a biotechnology firm's patented processes (valuable and inimitable), often require external alliances under RDT to access complementary inputs, such as rare raw materials, ensuring their effective utilization without exposing the firm to undue dependence.

Institutional Theory

Institutional theory posits that organizations adopt structures and practices to gain legitimacy within their social environments, often leading to isomorphism, or increasing similarity among organizations, through three primary mechanisms: coercive, mimetic, and normative pressures.^[34] Coercive isomorphism arises from formal and informal pressures exerted by entities upon which organizations depend, such as government regulations or resource providers; mimetic isomorphism occurs when organizations imitate successful peers in uncertain environments; and normative isomorphism stems from professionalization and shared norms within occupational communities.^[34] These processes emphasize how institutional environments shape organizational behavior beyond purely economic considerations, prioritizing societal approval and survival through conformity.^[34] Resource dependence theory (RDT) and institutional theory both conceptualize organizational environments as constraining forces that influence strategic responses, but they diverge in focus: RDT highlights power dynamics stemming from asymmetric control over critical resources, whereas institutional theory underscores broader socio-cultural pressures for legitimacy through isomorphism.^[35] In RDT, organizations actively manage dependencies via strategies like alliances or mergers to mitigate uncertainty and power imbalances, as articulated by Pfeffer and Salancik.^[35] Institutional theory complements this by explaining why such strategies may also involve conforming to prevailing norms to avoid legitimacy deficits, creating a dual lens on environmental adaptation where resource access intersects with social expectations.^[35] This linkage reveals how organizations navigate not only material dependencies but also symbolic ones, blending instrumental and ceremonial actions.^[36] Integrations of RDT and institutional theory appear prominently in studies of organizational governance, particularly regarding board composition and roles. Boards of directors, for instance, serve RDT functions by providing access to external resources and reducing dependencies on key stakeholders, while simultaneously conferring institutional legitimacy through alignment with normative governance standards.^[37] This combined perspective has been applied to explain how firms appoint interlocking directors to bridge resource gaps (per RDT) and signal conformity to industry practices (per institutional theory), enhancing both operational stability and reputational standing.^[37] Such syntheses highlight governance as a mechanism where resource power and institutional pressures co-evolve, informing research on corporate adaptation in regulated sectors.^[37] A illustrative example of this interplay occurs in nonprofit organizations, which often restructure to secure funding (an RDT imperative) while conforming to sector-specific institutional norms for legitimacy. Nonprofits dependent on government grants or private donations may adopt formalized administrative structures to meet donor accountability requirements, thereby managing resource uncertainties, yet these changes also mimic prevailing professional standards in the sector to maintain perceived credibility.^[38] This dual conformity enables nonprofits to balance survival needs with environmental expectations, as seen in cases where organizations partner with businesses not only for financial resources but also to align with normative expectations of collaborative efficiency.^[39]

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Resource Dependence in Public Higher Education - ResearchGate
Aug 7, 2025 · Utilizing resource dependence theory, this study investigates the relationship between institutional reliance on net tuition dollars as a ...Missing: industry | Show results with:industry
[26]
https://www.pew.org/en/research-and-analysis/issue-briefs/2019/10/two-decades-of-change-in-federal-and-state-higher-education-funding
[27]
Surviving and recovering in times of crisis: A resource dependence view of firm ownership
### Key Findings
[28]
(PDF) Evolution of research on resource dependency theory
Sep 23, 2025 · Purpose This study aims to explore the evolution of the resource dependence theory (RDT) and its application in the firm performance since ...
[29]
Power Imbalance, Mutual Dependence, and Constraint Absorption
We identify two distinct theoretical dimensions of resource dependence, power imbalance and mutual dependence, which in the original theory were combined in ...
[30]
Resource dependence theory in international business: Progress ...
Oct 17, 2022 · This study systematically reviews the stock of knowledge over the past 40 years on how the logic of resource dependencies unfolds in IB practices.
[31]
https://journals.sagepub.com/doi/10.2189/asqu.2005.50.2.167
[32]
[PDF] The Iron Cage Revisited: Institutional Isomorphism and Collective ...
May 26, 2003 · DiMaggio and Walter W. Powell, School of Organization and. Management, Yale University, Box 1A, New. -Haven, CT 06520. A preliminary version of ...
[33]
Resource dependency and institutional theory perspectives on ...
Dec 9, 2008 · This article develops and tests resource dependency and institutional theory arguments to explain two choices facing SME owner/managers.Missing: digital | Show results with:digital
[34]
(PDF) Theoretical Interplay of Resource Dependence and ...
Aug 9, 2025 · This conceptual study delves into the functional relationship between Resource Dependence and Institutional Theory.
[35]
[PDF] Journal of Management
Sep 23, 2009 · Since its publica- tion, resource dependence theory (RDT) has become one of the most influential theories in organizational theory and strategic ...
[36]
[PDF] The Strategic Response of Nonprofits to Institutional Pressures
Resource dependence (RD)and institutional theory arguments suggest that organizations are more likely to conform to pressures from constituents on whom the.
[37]
(PDF) Resource Constraints or Cultural Conformity? Nonprofit ...
Aug 5, 2025 · We find that nonprofits relying on earned income, nonprofits led by individuals with management degrees, and rationalized nonprofits all are ...