Resource Dependency Theory: An Analysis of Non-Profit Organizations

Running head: RESOURCE DEPENDENCY THEORY
RESOURCE DEPENDENCY THEORY
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RESOURCE DEPENDENCY THEORY1
INTRODUCTION:
Resource Dependency Theory refers to the study that focusses on how the external
sources belonging to an organization affect the organization’s behavior. The process of procuring
the external resources provides a significant principle of both the tactical as well as the strategic
management of such organization. This type of theory had no existence until 1970 formally and
it was formulized by the publication of The External Control of Organizations: A Resource
Dependence Perspective (Pfeffer and Salancik 1978). The nonprofit type of organizations all
over the world is subjected to high demand for accountability together with better transparency
in financial aspects. In this analysis, it is presumed that the standard of dependence on these
nonprofit organizations on resources that are external in nature have influenced the standard by
which the new reporting degrees are implemented. Though the resource dependence theory has
its application in research previously, there lies no specific research linked with this theory to
comply with the finance related reporting standard. By the use of the resource dependence theory
it is observed that these type of organizations depend mainly on the funding provided by the
government and thus they are eager to make necessary measures for complying with the new
regulations and rules such that their financial reporting is upto a high standard.
Annotated bibliography:
a) Raffo, D. M., Clark, L. A., & Arik, M. (2016). Strategic responses of non-profit
organizations to the economic crisis: Examining through the lenses of resource
dependency and resourced-based view theories.
In this study, the strategies that are being used by the non- profiting organization have been
examined responding to economic crisis that occurred in 2008. On the basis of the resource

RESOURCE DEPENDENCY THEORY2
dependency theory, we have explored the effect of using various strategies on the performance of
the non- profit organizations in this time period. Resource dependency theory can be considered
to be one of the foremost theories related to strategic management. We widely use this theory to
improve the study related to non- profit enterprise strategies including setting up, merging and
others, or in relation to the board of directors, political activities in the corporate sector as well as
management of the stakeholders.
b) Li, H., Lo, C. W. H., & Tang, S. Y. (2017). Nonprofit policy advocacy under
authoritarianism. Public Administration Review, 77(1), 103-117.
In this research, the capacity and ambition of the non- profit organizations have been
discussed. This article further analyses the activities of the non- profitable organizations.
The article focuses mainly on the following points; when the government officers are
eager to improve peaceful transitions, they are required to allow more non- profit
organizations to work by providing them more financial support. Organizations that
operate under authoritarianism can play an active role as changing agents by making
capacities by using multiyear grants. Such organizations may be enabled to hold
collaborating efforts among them as a method of enhancing the overall engagement in
policy investment.
c) Babelyte-Labanauske, K., & Kriauciunas, A. (2018, July). Edith Penrose and Jeffrey
Pfeffer and Gerald J. Salancik: Is There Room for Complementarity?. In Academy of
Management Proceedings (Vol. 2018, No. 1, p. 15702).
Resources that are critical for the creation of the sustainable competitive benefit of an any
type of organization including nonprofit ones are discussed in the field of strategic management.