Thirty years have passed since Pfeffer and Salancik’s seminal work on resource dependence theory (RDT). During this time RDT has been applied broadly across the research domain to explain how organizations reduce environmental interdependence and uncertainty. In this review, the authors assess the conceptual development, empirical research, and application of RDT. They structure their review around the five options that Pfeffer and Salancik propose firms can enact to minimize environmental dependences: (a) mergers/vertical integration, (b) joint ventures and other interorganizational relationships, (c) boards of directors, (d) political action, and (e) executive succession.The authors summarize past work, synthesize contemporary thought, and propose future research directions. Hillman, A. J., Withers, M. C., & Collins, B. J. (2009). Resource dependence theory: A review. Journal of management, 35(6), 1404-1427.

1. Resource Dependence Theory
–
A Review
Amy J. Hillman, Michael C. Withers,
and Brian J. Collins (2009)

2. Assumptions
• “to understand the behavior of an organization you must
understand the context of that behavior—that is, the ecology of the
organization.”
• organizations are not autonomous, but rather are constrained by a network of
interdependencies with other organizations
• interdependence, when coupled with uncertainty about what the actions will be
of those with which the organizations interdependent, leads to a situation in
which survival and continued success are uncertain
• organizations take actions to manage external interdependencies,
although such actions are inevitably never completely successful and produce
new patterns of dependence and interdependence;
• patterns of dependence produce interorganizational as well as
intraorganizational power, where such power has some effect on organizational
behavior

3. Assumptions in layman’s terms
• Organization are constrained by interdependencies
• Uncertainty & Interdependence = Bad
• Attempts to manage them creates new dependencies
• Which effects organizational behavior

4. • Goal – A review to assess
• conceptual development,
• empirical research,
• application, and
• future direction of RDT
• Unit of analysis – The Firm
• (and the environment that is constraining it)

5. RDT in Review
• Mergers/Vertical Integration
• Joint Ventures & other interorganizational relationships
• Boards of directors
• Political action
• Executive succession

6. Mergers
• RDT rationale for reducing environmental interdependency:
• Reduce competition
• Manage interdependence
• Diversify operations
• Informative, however empirical research: Not the only predictor (cfr. RBV,
TCE, Industrial Organization etc.)
(a) a lack of discrimination between power imbalance and mutual dependence;
(b) confounding normative prescriptions and theoretical predictions;
(c) ambiguities around its boundary conditions;
(d) most empirical work focusing on dependence of one actor on another rather than
on reciprocal interdependence.
• Future research: Differentiate between power imbalance and mutual
dependence

7. Joint Ventures
• RDT rationale for reducing uncertainty and interdependence
• Interdependent firms (through partial absorption)
• Reduce environmental complexity & gain resources
• Alliances to increase power
• RDT + theoretical perspective:
• RDT + Network theory/Game theory/Agency theory/TCE/RBV
• RDT alone does not completely explain interorg. relationships
• Future Research : Combining RDT with other perspectives to consider
dynamic nature of dependencies & power and multiplexity of
interdependency

8. Board of Directors
• RDT rationale for managing environmental dependencies & board reflection of
environmental needs
• Board size and composition
• Empirical Research brings more nuance
• Type of directors (inter-locked, resource-rich outside directors etc.)
• Dependence on firm’s current strategy and prior financial performance
• Empirical support for Pfeffer & Salancik suggested benefits of directors to
organizations through:
1. advice and counsel
2. channels of information flow
3. preferential access to resources
4. Increased legitimacy
• Future Research: Combining RDT with agency theory to understand motivations
and specific resources of individual directors to contribute to the board

9. Political Action
• RDT rationale for reducing uncertainty and interdependence through
other means:
• Alter conditions of economic environment (Shape governmental regulations)
• Empirical research
• Higher dependence on government correlates with political activity
• Firms in the same environment show similar form of political activity
• Linkages (through BoD) increase performance for government dependent
firms
• Future research: A need to further elaborate on limited research on
political action and RDT

10. Executive Succession
• RDT rationale to respond to environmental contingencies
• CEO replacement to better cope with the environment
• Empirical research support the claims that
• Intraorganizational power is affected by external dependencies
• Selection of insider or outsider CEO
• Executive succession reduces environmental dependencies
• Cfr. Liberalization of energy market
• Future research: RDT is not widely used for executive succession,
traditional perspectives are more prevalent – potential research
avenue for RDT in explaining turnover events?

11. Astley & Van de
Ven (1983)
Pushing towards
Q1 – Executive
Succession
Q2/Q3–
Political
Action
Q1-2 – Board
of Directors
Q1-3: Mergers
Q1-3: Joint Ventures &
Interorganizational relations

12. Future of RDT
• Integrating RDT substreams
• Interaction approach
• Eg Mergers + Political action = ?
• Natural sequence of RD strategies – interaction effects?
• Integrating RDT with other perspectives
• RDT + RVB = combining internal & external resource perspective
• RDT + Stakeholder Theory = (strategies) for managing dependencies
• RDT + Real Options Theory = combining RDT substreams to deal with
uncertainty in strategic decision making
• RDT + Population Ecology = Role or RD relationships in selection process
• RDT + Niche Theory = How RD relationships develop in certain industries
• Etc.

13. Future of RDT
• Other strategies to reduce environmental dependency
• (New) Interorg. forms (eg modular structure, trade associations) reduce
dependency/uncertainty, however, they create new dependencies
(information sharing, coordination)
• Regular Executive succession is less needed if micro-level Strategic HR mgt
processes are implemented
• Theoretical developments of RDT
• Some avenues for Mergers, Joint Ventures & Board of Directors
• Little theoretical development in political action & executive succession
• Boundary Conditions
• Exploration of Temporal conditions, Institutional conditions (US context)