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what happened to resource dependence theory?

The three main sociological theories about organizations to arise in the late 1970s/early 1980s were institutional theory, population ecology, and resource dependence theory. Of the three, I think it’s fair to say that resource dependence has had the least amount of staying power. Institutional theory has become a dynasty. Population ecology is influential even beyond those who self-identify with the theory (e.g., see the prevalence of event history analysis and density dependence models). But resource dependence, although ritually cited, failed to carry forward as a vibrant research agenda among the current generation of scholars.  Why is that?*

This wasn’t always the case. You could argue that in the early 1980s, resource dependence theory had the greatest potential for developing a coherent research community. Looking at this Ngram graph, you can see that by 1982 Pfeffer and Salancik (1978) was getting cited far more often than Meyer and Rowan or Hannan and Freeman. It appeared to be the dominant theory. But something happened in 1983 that caused a sudden reversal of that trend. It’s pretty clear from the graph that in 1983 the influence of Pfeffer and Salancik began to decline while the influence of DiMaggio and Powell began to accelerate at an even greater rate.  Ecology continued to rise in influence during this same time period, peaking in citations in the mid-1990s.

The decline of resource dependence theory has a number of causes. I don’t think that the problem was that resource dependence was not a good theory. If you were able to transport your academic self back to 1983, I think you’d find that resource dependence had as much potential for building an expansive theoretical program as institutional theory did. You could imagine that resource dependence could have expanded its conceptual artillery to embrace resource dependencies of various types (e.g., cultural resources, symbolic resources) and across different sources of dependence (e.g., state, professions, consumers).  Resource dependence could have co-opted the burgeoning literature on interorganizational networks and provided it with a theoretical lens with which its fancy methods could be put to use.  (It’s always seemed strange to me that Ron Burt’s structural holes concept was not more tightly associated with resource dependence theory given that one of the central concepts in his theory, structural constraint, is all about dependence.) The theory could have branched out to explain phenomena as varied as firms’ symbolic responses to shareholder activism or the influence of  corporate board networks on patterns of diffusion. These studies happened and some were informed by Pfeffer and Salancik, but they were not closely associated with resource dependence theory. Instead, many of these studies ran to institutional theory for cover.

I think there are a number of reasons resource dependence theory failed to cohere into a community of scholars. Here are a few:

  • Pfeffer and Salancik (1978) offered a broad “ecological” theory about how firms were situated in and depended on their environment, but the empirical application of the theory became too narrow too soon.  Although P&S emphasized in their original formulations that organizational managers could respond to dependencies in a number of ways, including symbolic responses, research seemed to settle on absorption as the most common/effective response. Dependence absorption essentially means that the organization seeks to eliminate the source of its dependence through co-optation, merger, acquisition, etc. Thus, many of the most famous resource dependence studies are about acquisition or merger patterns across industries. While absorption is certainly a common response, resource dependence scholars’ fascination with it may have unintentionally diverted scholars from exploring a diversity of ways in which firms manage dependence relations. The theory narrowed its focus too quickly.
  • While resource dependence theory narrowed its focus, institutional theory became expansive. Institutional theorists cast a wide net. They were open to scholars who were interested in one of their central concepts, even if their intention was completely orthogonal to the original motivations of institutional theory (e.g., Oliver 1991). This open tent approach allowed institutional theory to evolve fairly quickly from an explanation for the rationalization of the organization to a broader theory about the macro-cultural environment of organizations. The flexibility of institutional theory made it attractive to management scholars who were looking for non-economic explanations for organizational phenomena. Because institutional theory was seen as more flexible, it became a formidable competitor to resource dependence theory in management scholarship, which would increasingly become the hot bed for influence building in organizational theory.
  • Population ecologists created a better methodological toolkit than resource dependence scholars.  In reading my grad school notes on Pfeffer and Salancik (1978) I’m amazed at how similar some of their central assumptions about organizational survival were to their ecologist colleagues. Both the ecologists and resource dependence theorists imagined a world in which organizational survival was less a function of managerial talent or knowledge and more a consequence of an organization’s fit with its resource environment.  The advantage Hannan and Freeman had over P&S, in my view, is that they offered the complete theory-method package. They not only provided a way to conceptualize the resource environment of organizations, they also gave you a toolkit for operationalizing and analyzing that environment. As a result, population ecology became the go-to theory for explaining organizational survival/failure.
  • Resource dependence lacked the community builders its competitors had.  I don’t know very much about Pfeffer’s and Salancik’s efforts to promote the theory or to create a cadre of resource dependence followers, but I do know that their competitors were especially good at this (although they did it in different ways). Hannan and Freeman created a community of scholars through intense training of their graduate students, who continued to publish together over the years and formed an cohesive community of scholars who would develop and test the basic ideas of the theory. Institutional theorists did this as well, but they also held numerous conferences, published edited volumes, and made ties to other communities of like-minded scholars. Their community building has paid off big time for both theories, especially as it affects citation patterns and ability to get through the peer review process.   Salancik, of course, passed away in 1996. Pfeffer’s interests moved to other areas of research.  The loss of these figureheads of the theory, I think, has hurt the theory’s prominence in the field. Not having active promoters of the community has probably meant that there were fewer opportunities for resource dependence scholars to engage in community building.
  • Dick Scott.  As the key chronicler of organizational theory Dick has had huge sway over people’s tastes and research interests. Dick is by no means an enemy to resource dependence theory, but he is a great friend to institutional theory. His book, Institutions and Organizations, has made him an ambassador of institutional theory.  Moreover, his three pillars approach to institutional theory was so encompassing that it pushed institutional scholars to move even further into the territory of P&S (a trend that DiMaggio and Powell started when making the case for coercive isomorphism). Absorption of uncertainty was recast as a strategic response to institutional pressures.  At the time that Dick wrote his influential book, resource dependence theorists had few proponents willing to defend the captured territory.

Regardless of the reason, resource dependence theory is basically dead as a theoretical program. Again, I think it will continue to be cited and will inspire insights and interpretations, but as an active research program it’s time is gone. That may not be a bad thing. In a future post maybe I’ll write more about why I think that building big theoretical programs might be counterproductive, but for now I’ll just say that I think resource dependence theory gives us a window into understanding what makes a theoretical program successful. It’s not all about the ideas because Pfeffer and Salancik had a LOT of them. Theories compete for attention and resources in the same way organizations do. From what we know about resource dependence theory, at some point during the 1980s resource dependence theory lost its ability to compete for those resources with population ecology and institutional theory.

*Jerry Davis and Adam Cobb wrote a nice review piece about resource dependence theory for Research in the Sociology of Organizations in which they provide evidence of the theory’s “ongoing influence across a number of social science fields.” I’m not saying it’s no longer influential (as can been by the continued citations Pfeffer and Salancik get), but I do think that there isn’t much evidence that has cohered into a community of researchers in the same way that institutional theory or population ecology has. Because of that, I don’t think Pfeffer and Salancik get credit for the novelty of their ideas.

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Written by brayden king

August 3, 2011 at 7:20 pm

Posted in brayden, just theory

18 Responses

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  1. My reading is roughly similar to yours but I would phrase it as institutionalism in the D+P formulation took up the most interesting part of resource dependence and subtlely transformed them. The idea of legitimacy being a resource was always part of resource dependence (in particular, chapter 8 of P+S reads like it was co-authored by Paul DiMaggio and Gordon Tullock) but institutionalism took this up in a big way. While maintaining a sense of legitimacy as an intervening variable that mediates in a loosely coupled fashion between prevailing notions and access to resources, institutionalism deemphasized empirical inquiry into legitimacy in its capacity as independent variable. That is, in practice institutionalism is an inquiry into diffusion that has certain background assumptions about resources. This is an appealing style of research in part because watching organizations change (a) synthesizes well with networks and (b) doesn’t present the same data problems as watching organizations go bankrupt.
    So basically, resource dependence turned into institutionalism, kind of like arguments from paleontologists that “dinosaurs didn’t disappear they evolved into birds” or from historians of late antiquity that “the Roman empire didn’t fall, it moved to Constantinople and/or transformed into mediaeval Europe.”

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    gabrielrossman

    August 3, 2011 at 7:47 pm

  2. I was doing a systematic review in one sub-field of institutional theory and it struck me how often the empirical case studies actually have a lot of resource dependency explanations going on. But in the end, resource dependence is a bit trivial as an explanation. The resource dependency related aspects of cases have a contol-variable kind of “then there was this thing as well” feel to them.
    To be interesting, arguments concerning resource dependencies need to have some novel element of how these resource dependencies are managed. Then you have the whole board of directors literature which kind of spun out from the resource dependence conception but took a life of its own. The fact that they manage resource dependencies seem to be almost the least interesting aspect of board-interlocks literature.
    So I guess its about capturing the imagination, which R.D. doesn’t do for me, even though its highly relevant and real. Which remind me, I should teach more of it. Which reminds me, I should stop offering my worthless comments on everything and get back to work. :)

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    Henri

    August 3, 2011 at 7:55 pm

  3. Henri – We love your “worthless” comments and so please, keep commenting.

    I suspect that if we had read Pfeffer and Salancik in 1978, it really would have captured our imagination. The problem is that we read it today and think to ourselves, “hmm, but doesn’t institutional theory say something similar except better??” Exactly. Institutional theory took over resource dependence’s territory and improved on it in important ways and in the process we forgot that some of those foundational ideas came from resource dependence.

    One difference that resource dependence had from institutional theory that didn’t translate into institutional theory (as much) was the underlying assumptions about power struggles and dynamics. This comes out in Neil Fligstein’s work, but a lot of institutional scholars borrowed the hypotheses of resource dependence theory without bothering to import the assumptions about intra and inter-organizational politics. Some of the real world, nitty-grittiness of resource dependence faded from view.

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    brayden king

    August 3, 2011 at 8:04 pm

  4. Since I’m prepping for a generals exam in orgs, two thoughts, two asq articles come to mind.

    1) As Gabriel notes and Mizruchi and Fein (1999) argue, DiMaggio and Powell sublimated much of resource dependence’s emphasis on legitimacy and notion that powerful alters can shape an ego’s organization through coercive isomorphism. The result was scholars could thing deploy similar arguments regarding control over important resources but through D&P rather than Pfeffer and Salancik.

    2) As Casciari and Piskorski (2005) note, the theory as presented in Pfeffer and Salancik masked several ambiguities that made it’s rhetorical application appealing, but its testability or operationalization problematic. In short, RD’s emphasis on “interdependence” actually involves two separate processes (power imbalance and mutual dependence) that need to be taken into account.

    The result are two rather internalist explanations why resource dependence has not been more successful, ie it got beaten/absorbed by another theory, which is okay since it wasn’t that well-specified and consistent from the outset.

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    dr

    August 3, 2011 at 8:56 pm

  5. Brayden: There is a lot to say about this, but let me react to two things you wrote:

    1. “It’s always seemed strange to me that Ron Burt’s structural holes concept was not more tightly associated with resource dependence theory given that one of the central concepts in his theory, structural constraint, is all about dependence.”
    With all due respect, I think this note is a sign of your youth and how the Structural Holes argument has evolved over time. If you read Burt’s companion books Toward a Structural Theory of Action (1982) and Corporate Profits and Co-optation (1983), you will see that these books [and his diss, in 1977] feature an early version of the “control” side of the structural holes argument and it is very much framed as refinement of/improvement on Pfeffer and Salancik. In fact, Burt uses the same (input-output) data but reanalyzes and extends it, replacing volume of trade as a measure of dependence with early measures of constraint. And he continues this in Structural Holes (see pp. 228-250, and especially figure 7.2). If you are like me, and you encountered Burt’s work before the publication of SH, this is the stuff that imprinted you. And my sense is that many people in the 1980s thought that Burt had basically taken over RDT. Finally, note that the timing of your encounter with Burt matters because while there was no “information” side to the (predecessor versions of the) Structural Holes argument before 1992*, this soon became the only side of the argument that Burt discussed, with control (the link to RDT) dropping out. So your reaction is understandable, if somewhat misinformed.
    (*See the 2008 Symposium on Structural Holes in ICC as to whether the two sides of the argument work indeed work together; they do under some conditions, and they don’t under others. Note also that the information argument has “evolved” over time, such that the version in the recent book Neighbor Networks [which I do not understand] completely contradicts the version from Structural Holes)
    2. My own view is that there should be no surprise that RDT died down because it is an incoherent theory that mushes together very different issues around asymmetric dependence together with issues around mutual interdependence and uncertainty. As Williamson correctly pointed out in his 1981 AJS paper, the mutual interdependence argument basically reduces to transaction costs economics, and Casciaro and Piskorski basically lay out why it’s crucial to distinguish the asymmetric from mutual (and the asymmetric part basically reduces to Porter 1980). So it’s not surprising to me that RDT has died down. Of course, the fact that it is not surprising that we have moved on from RDT does not preclude surprise at why we have not moved on from other “theories.” I won’t say much more about that, other than to link to this and to say that I don’t identify with your reaction of having read Pfeffer and Salancik and thinking that N-I has said “something similar except better.”

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    ezrazuckerman

    August 3, 2011 at 8:59 pm

  6. dr: agreed with your point 2). Seems we were cross-posting.

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    ezrazuckerman

    August 3, 2011 at 9:00 pm

  7. I don’t buy the internalist story. If only completely consistent and testable theories could be successful as theoretical programs, most organizational theories would never have gotten off the ground (Ezra sorta makes this point in his comment too). I think H&F, M&R, D&P, and P&S succeeded in capturing the imagination of organizational scholars because they were rich with ideas, not because they presented a perfectly coherent explanation for a phenomenon. That said, I agree with you that the Casciari and Piskorski paper is really nice. I used to teach that paper to my undergrads at BYU. The paper’s major problem was that it was published two decades too late.

    Ezra – Of course you’re right about Burt. But didn’t he intentionally move away from resource dependence theory in the post-1983 period? I’d think that his distancing from resource dependence theory is just another indicator of the theory’s inability to cohere into a theoretical program/community.

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    brayden king

    August 3, 2011 at 9:14 pm

  8. Brayden: You’re right of course that the reason why an org theory perspective (do we have to call these things “theories”?) sticks around or disappears has little to do with the coherence of the theory. But do you have to rub it in?

    Re Burt:
    As I said, the “control” argument [derived from P&S and exchange theory more generally] is actually fairly prominent as late as the 1992 book (and as I said, chapter 7 focused on it; see also chapter 3 and two AJS articles from 1989 and 1990 in this vein), and it continues to show up in the 1997 ASQ article, as well as in work by his students (e.g., Gargiulo’s 1993 ASQ paper Two-Step Leverage). As for why Burt moved away from the P&S part of the argument and focused on the (new in 1992) Granovetter part of the argument, I really cannot say. If I had to guess, one reason is that people did not like the ethical implications of the control argument, when framed at the individual level (people prefer stories about brokerage as value-creation [e.g., Obstfeld, 2005] and get uneasy about value-capture; and rightfully so, though you can’t make a buck without it).
    As for “his distancing from resource dependence theory is just another indicator of the theory’s inability to cohere into a theoretical program/community,” I guess that that’s probably right and that it’s a symptom of a far deeper problem: the tendency in our field for discussions to coalesce around moving a particular perspective forward rather than improving our ability to make progress in answering difficult, important questions. So yeah, the fact that Burt called his theory one thing and P&S called it another probably made it difficult for a community to cohere. In a better world though, this shouldn’t matter. What should matter is whether the questions that they asked were difficult and important, and people would want to jump in when they thought they could make progress.

    (You can see a bit of a tension between these two different motivations for engaging a literature in Podolny’s comment on our paper in the 2008 ICC Symposium, and our response to him. [see http://web.mit.edu/ewzucker/www/Symposium_on_Structural_Holes.pdf%5D)

    I imagine that you agree with me on all this, it’s just that I am emphasizing the “should” and you are emphasizing the “is.”

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    ezrazuckerman

    August 3, 2011 at 9:56 pm

  9. A former life of reading Kuhn, Fleck, and SSK makes me agree with you, Brayden, successful ideas are not successful simply because they are amenable to testing or are logically coherent. But, as Kuhn would remind us (picked up later in Somers 1998 in AJS), theories advance through on-going articulation to substantive areas of interest. This can happen as in the case of D&P through creative or selective misreadings (again see Mizruchi and Fein 1999), or more simply through its application to new areas of interest. One might imagine, then, factors like clarity or coherence might aid greatly in expanding the scope of the theory through easy hypothesis testing.

    I agree that P&S was incredibly rich and full of interesting insights borrowed from exchange theory, contingency theory, and early institutional ideas about org environments. If we take Casciari and Piskorski seriously, it seems like the many ambiguities discussed therein only increased the richness of the perspective initially, but potentially hampered its further expansion later on.

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    dr

    August 3, 2011 at 10:07 pm

  10. I think Resource Dependence Theory still has a future, probably following the differentiation between power imbalance and mutual dependence mentioned above. I also find attractive the potential connection between RBV and RDT, among others, suggested by Hillman (2009; http://jom.sagepub.com/content/35/6/1404.abstract) .

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    Luis Enrique

    August 4, 2011 at 12:10 pm

  11. A few comments:

    1. As a Stanford graduate, with Jeff Pfeffer as my adviser and Dick Scott as my University Chair, I can attest that Dick was a proselytizer of institutional theory and Jeff did not do the same with resource dependence theory. Jeff’s students include Richard Harrison, Jerry Davis, Morten Hansen, Tanya Menon, and myself, and none of us is associated with resource dependence theory. The lack of a community of scholars for the resource dependence perspective is, in my view, the primary reason it did not thrive as an independent perspective.

    2. Pfeffer and Salancik’s External Control of Organizations received 315 citations last year (2010) according to Web of Science (more than Hannan and Freeman 1977 and 1989 combined- 227 citations). In a research field such as organization studies where most scholars draw from various perspectives, resource dependence remains to this day extremely influential. I wish I could publish a book that 34 years afterwards could get that many citations in one year.

    3. The resource dependence perspective lives on through a large part of what passes for institutional theory and network perspectives. On the former Dowling and Pfeffer in 1975 discussed the importance of legitimacy as a resource as a critical resource for organizations, prior to Meyer and Rowan (1977). I agree with Ezra about how Burt’s research agenda developed directly from resource dependence theory.

    4. The lack of coherence has very little to do with it. Meyer and Rowan (1977) contains two different arguments- one about legitimacy (a variant of resource dependence theory), the other about conformity to rational accounts. DiMaggio and Powell (1983) theory of isomorphism was more coherent, but the isomorphism story is basically dead as research agenda. Now most institutional theory papers are about change and heterogeneity, and often seem to be more about agency rather than institutions. The ambiguity in institutional theory has allowed it to gain a large number of adherents, even though the ratio of papers published versus produced may be lower than in other more coherent theoretical perspectives.

    5. Being a dead research perspective is not always a bad thing. Newtonian physics is after all, “dead” by this account. Contingency theory may be dead also, but more than any other theoretical perspective is what gets taught in macro MBA classes.

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    William Ocasio

    August 4, 2011 at 11:14 pm

  12. Hey there, Willie. You really think D&P’s theory of isomorphism is so coherent? To me, the fact that no one can tell the difference between the three types of isomorphism is enough to make me wonder what the great appeal of this paper is , esp 27 years later. I describe an exercise I run on this paper here: https://orgtheory.wordpress.com/2011/04/22/orgtheory-net-turns-five-praise-critique-and-feedback/#comment-95213.

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    ezrazuckerman

    August 5, 2011 at 12:26 am

  13. Ezra, my point was that DIMaggio and Powell was more coherent than Meyer and Rowan theoretically, not that it was fully coherent. I agree that operationalizarion of the three mechanisms is difficult, and even if analytically distinct, are likely to co- occur in practice. Theoretically a bigger problem with the paper is the distinction between mimetic and competitive sources of isomorphism, the latter which is mostly ignored.

    Believe me I believe in coherence. But papers need not be coherent to be great contributions. I was in a recent conference on the garbage conference and it was striking how the participants interpreted the theory differently. In that paper the verbal theory differs from the computer simulation.

    Our field values theoretical innovation over coherence.

    Pfeffer and Salancik, Meyer and Rowan, Hannan and Freeman, and DiMaggio and Powell.are all great contributions not because of their coherence but because they provide novel (if incomplete) insights on organizational reality.

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    William Ocasio

    August 5, 2011 at 1:44 am

  14. “Our field values theoretical innovation over coherence.”
    Is that an *is* or a *should*? One reason that to think that it is not a *should* is that it seems that our field sometimes misses theoretical innovation when it is staring us in the face (perhaps because it is too coherent?). For example, and as I suggest in that comment I linked to above, it is depressing to contemplate the relatively limited impact of Strang & Macy 2001, as compared with D&P 1983.

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    ezrazuckerman

    August 5, 2011 at 1:33 pm

  15. Believe me I agree that coherence is undervalued in our field. I am finishing up a book with Pat Thornton and Mike Lounsbury on Institutional Logics and one of our objectives is to bring coherence to a thriving, if somewhat disjointed, research area.

    But if coherence were the main goal, then we should all be economists or, at least, rational choice theorists.
    Neoclassical economics is quite coherent, but the more coherent the theory got, the more empirically invalid it became.

    Papers should make a value added contribution to our understanding of organizational reality. In my view organizational (and more generally, economic, and social reality) is inherently messy and complex, and highly coherent theory are often invalid or at best, partial and incomplete.

    Theory and research has to be evaluated relative to what came before. DiMaggio and Powell deserves its classic status because it helped generate a relatively simple, yet quite distinct, explanation for the adoption of formal structures that then prevalent perspective of contingency theory. The lack of precision in its operationalization actually allowed for researches to creatively apply the theory.

    Now Strang and Macy 2001 is a great paper, and undervalued, probably because computational models are not popular in our field. But theoretically the paper is an integration of learning theories with mimetic isomorphism, and while quite clever, it extended our understanding of organizational reality less than D&P did in 1983, even if it is more rigorous and coherent.

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    William Ocasio

    August 5, 2011 at 3:22 pm

  16. […] Brayden wrote a very perceptive post about institutional theory’s displacement of resource dep…. That post inspired me to think about the history of institutional theory as it is practiced in soc, o.b., and management: […]

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  17. Thanks for your insightful article, Dr. B. I was intrigued and enlightened by your
    sound perspective. I also read Davis and Cobb’s article, which was quite informative.
    I am also a huge fan on DiMaggio & Powell’s work on Institutional Isomorphism.
    As an inexperienced doctoral candidate in a ‘certain’ university in
    Boston, MA., I am curious as to how you could ‘agree’ with Davis & Cobb, who aren’t
    ready yet to bury RDT, while you hold your view of RDT dead and buried. Aren’t you
    trying to have it both ways? Forgive my inexperienced cynicism. Again, thanks for
    the enlightenment.

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    Sol_G

    June 4, 2012 at 1:53 am


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