The document discusses various strategies organizations use to manage dependencies and increase interdependence, including bargaining, contracting, co-optation, hierarchical contracts, joint ventures, mergers, associations, and connections with government. It defines power as being based on an organization's dependence on resources controlled by another. Organizations can increase their power through bridging strategies that enhance interdependence, such as incorporating representatives of other groups, combining control features of contracts with authority, or merging with other organizations. Managing dependencies and pursuing interdependence helps organizations secure important resources and reduce uncertainty.

1. Resource Dependency and Bridging Strategies
Emerson (1962) defined that "the power of A over B is equal to, and based upon the
dependence of B upon A" (p. 33 quoted in Scott p. 198). B'd dependence is
proportional to the importance B places upon the goals mediated by A and inversely
proportional to the availability of these goals to B outside the A-B relationship (Scott
p. 198).
Thus power is a function of the exchange relationship, and the power of an individual
or organization varies by situation. In a zero-sum power situation when one gains
power another loses it, but it's also possible to increase the power of both parties
through increased interdependence. Bridging strategies increase interdependence.
In symbiotic interdependence groups exchange unlike resources. Power is created
with the perceived importance of these resource is different between parties. In
competitive interdependence two groups compete forthe same resources of
another party (Scott p. 198)
Pfeffer and Salancik claim that the most commonsolution to the problems inherant
in interdependence is to increase the mutual control over eachothers resources
(Pfeffer and Salancik, 1978). Some commonbridging strategies are:
Bargaining
This is actually a pre-bridging strategy, most often reflected in defining and
defending the organization's domain (Scott p. 198). This caninclude acts like
developing alternative suppliers of a critical resource.
But bargaining ofteninvolves negotiation between two organizations (Katz and Kahn,
1978). Bargaining behavior is moderated by the boudary role person and their trust
relationships with their counterpart in the other organization and with their internal
members.
Contracting
Thompson states that contracting is "the negotiation of an agreement forthe
exchange of performances in the future" (Thompson 1967 in Scott p. 199). They are
attempts by organizations to reduce uncertainty by coordinating future behavior
with other organizations. There is still some inherant uncertainty in any contract (see

2. Williamson, 1975) but they help define obligations between parties. Also their quasi-
legal status oftenopens them up to future renogiation and bargaining.
Co-optation
Selznick (1949) first described co-optationas the incorporation of representative of
external groups into the internal decision-making oradvisory structure of an
organization (Scott p. 199). Studies of interlocking directorates is often a focus on co-
optation. They show that oftenboard appointments are used to build relationships
with important parts of the environment of which they are dependent (see studies in
Scott p. 200).
Co-optationis also used in public agencies and non-profit organizations. Many
federal programs get local representation forthis purpose, though many critized this
strategy as merely legitimizing federal intervention (Scott p. 201). Like Selznick found
this strategy can backfire when local interests subvert the federal goals.
Hierarchical Contracts
Stinchcombe (1985) identified a new form of bridging that combines the "arms
length" feature of contracts with the control features of authority relations (Scott p.
201). They are used in highly complex and uncertain interdependencies (like
between defense contractors and governments). The contracts give intermediate
control rights to exchange partners that normally would be the domain of internal
decision-making. "Such hierarchical rights undermine the autonomy of the
independent contractors... (and become more like a joint venture) -- Scott p. 202.
They are used in large, high risk projects like defense projects and large construction.
Joint Ventures
In joint ventures two or more firms create a new organization to pursue a common
interest, though there is less pooling of resources than in a merger. They canoccur
between competitors or exchange partners. They most often occurwhen
competition is high and event horizons are short. Sometimes joint-ventures of R&D
nature are done in research consortia. Other times they allow two firms to capitalize
on each other's strengths and to compensate for one's own weaknesses.
Mergers
In mergers two more more organizations combine to form one organization. Three

3. major types of mergers are (Scott p. 203):
1. Vertical Integration
Organizations at different stages of the production process (that are symbiotically
related) merge with one another. They most often occurin organizations that are
already interacting with each other (Pfeffer, 1972).
2. Horizontal Merger
Organizations performing similar functions merge together to form a larger
organization. They tend to occur when competition is high (Pfeffer 1972).
3. Diversification
Organizations acquire other firms with little relationship to their core business. The
extreme form of diversification is a conglomerate.
Different types of mergers have occured more frequently at different stages of
history (Chandler, 1990).
Besides the resource dependency approach above, Williamson (1975) argues that
transaction costs can also help explain vertical integration -- "as the assets required
by the firm become more specific, firms will elect to produce them internally to
avoid dependence on a small number of external suppliers" (Scott p. 204). This has
been supported by various studies (see Scott p. 204). However, it was also shown
that comparative production costs is a major decision factor(i.e, can firms produce
the required assets more cheaply internally?).
Associations
"Associations are arrangements that allow similar..organizations to work in concert
to pursue mutually desired objectives" (Scott p. 205). The members can be similar or
dissimilar, depending on the objectives of the association. Individual organizations
join associations to "garner resources, secure information, exercise influence, or
obtain legitimacy and acceptance" (Scott p. 205).
Trade associations are a particular form with varying degrees of power (lower in US,
high in Japan and Western Europe).

4. Government Connections
Governments affect organizational exchanges by specifying what types of exchanges
are permitted and by also exchanging resources themselves with organizations.
Goverments have varying degrees of authority over organizations, though these
organizations can lobby goverments to influence both the demography and decision-
making of government bodies.
Goverments exert varying degrees of monitoring and regulation of organizational
sets, which can have unintended consequences (protection of current environment,
favoritism, restricting competition, fixing prices and profits, etc.). While goverments
extract taxes from organizations, they can also provide resources such as tax breaks,
incentives, subsidies, or simply as a purchaser of products or services.