Impact of Resource Dependency Theory on Organizational Behavior

This report provides an in-depth analysis of Resource Dependency Theory (RDT), examining its influence on organizational behavior, particularly within the context of Non-Governmental Organizations (NGOs). The report explores how external resources, such as funding, technology, and market forces, affect the strategic decisions and overall performance of businesses. It reviews ten journal articles that apply RDT to various aspects of organizational management, including financial performance, board diversity, and supply chain management. The analysis highlights the importance of managing dependencies on external resources to ensure organizational sustainability and success, emphasizing the need for strategic responses like funding diversification and effective management of external relationships. The conclusion underscores the crucial role of RDT in decision-making and the importance of evaluating external resources for achieving market success and appropriate organizational activities.

Resource Dependency
Theory

Table of Contents
INTRODUCTION...........................................................................................................................1
MAIN BODY...................................................................................................................................1
CONCLUSION................................................................................................................................4
REFERENCES................................................................................................................................5
.........................................................................................................................................................6

INTRODUCTION
Resource dependency theory is consider as a study that define how the outside resources
of business can bear upon the overall behaviour of company. It is beneficial for company to
enhance their entire organizational activities in most effective manner. The main reason behind
selecting this theory, resource and power both are linked and at the same time also determine the
behaviour of any kind of organization. In context of NGOs, it is important for organisation to
resolve issues related to the scarcity of resources. It is a big issues that faced by company when
they operate their business activities. For this, Resource dependency theory is implement by
NGOs in which they depend on external factors such as technology, marketing and
communication and many more to fulfil their needs at market place.
MAIN BODY
1. Bergmann, A., Stechemesser, K., & Guenther, E. (2016). Natural resource dependence
theory: Impacts of extreme weather events on organizations. Journal of Business Research.
69(4). 1361-1366.
This journal is based on natural dependency theory that determine how uttermost weather
condition and events impact on performance of financial condition of company. Along with this,
the analysis related with the organisational dependence resources that affected through external
factors. As it may improve the positive impact on entire financial performance. If non profit
organization are seriously influence by those elements that it cant not generate any kind of
positive growth within the business activities. Mainly, this analysis is contributes in management
by evaluating the most effective external factors that affect the whole environment of non profit
organization.
2. Coupet, J., & McWilliams, A. (2017). Integrating organizational economics and resource
dependence theory to explain the persistence of quasi markets. Administrative Sciences.
7(3). 29.
This kind of journal appraise the information about growing body of profit seeking public
service fields with the apprehension that these types of firms will serve public services more
effectively than national authorities can. Governments have design similar marketplace to get
attention of private service providers so that they can also operate the business with them. Within
this article, dependency theory help in provide information that underdevelopment is the major
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campaign by the peripheral position of influenced economy of the nation and organisation. In
addition to it, there are various sector like health care, corrections, education and garbage
collection etc. which are operate with the help of quasi market.
3. García-Meca, E., García-Sánchez, I. M., & Martínez-Ferrero, J. (2015). Board diversity
and its effects on bank performance: An international analysis. Journal of Banking &
Finance. 53. 202-214.
This is a journal paper that includes aims to evaluate effectiveness of resource
dependency theory that affect organisational behaviour in positive manner by making
appropriate decision towards the external resources. This part is carried out as a part of research
that analysis or evaluate key considerations about latest literature that provide relevant
information about RDT and its influence in non profit business organization. In addition of this,
current paper develop a framework that define opportunities to develop positive relation along
with people who wants to better welfare services to improve their living standard.
4. Hambrick, D. C., Misangyi, V. F., & Park, C. A. (2015). The quad model for identifying a
corporate director’s potential for effective monitoring: Toward a new theory of board
sufficiency. Academy of Management Review. 40(3). 323-344.
This journal paper provide information regarding evaluating the corporate director's
potential for effectual observation within the non- profit organization. It also shown evaluation
about the Resource dependency theory that provide opportunities to company in generating
revenue for operate the same with the same. Along with this, the major limitation of this study is
that some time this type of theory negatively impact on the company due to ineffective decision
making activities. Furthermore, this study is focus on individual directors, that help in
monitoring the process of certain qualities such as independence, expertise in aspect to that
domain and motivation as well.
5. Harkins, J., & Forster-Holt, N. (2014). Resource dependence and the exits of young
firms. Entrepreneurship Research Journal. 4(4). 323-349.
This work is relate with the resource dependence theory with the aim of evaluating how
non- profit organization dependencies that affect the overall performance of company. Along
with this, it also determine that industries that are low tech that define high firm turnover develop
dependencies in market place. Business organization operating in high tech industries that
includes positive impact on overall performance of non profit organization. The major findings
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based on the performance, competitive advantage of Non profit organization that includes
evidence of resource dependencies affect the overall outcomes. As it employ by the non profit
organization in relation to resource dependence.
6. Isidro, H., & Sobral, M. (2015). The effects of women on corporate boards on firm value,
financial performance, and ethical and social compliance. Journal of Business Ethics.
132(1). 1-19.
This journal is also define the effects of women on corporate boards on organizational
worth and its financial performance, ethical and societal conformity as well. As it define that,
female are positively related with the ethical aspect and social activities that turn into improving
values of company and financial performance as well. The finding to this study is evaluate the
greater female representations in corporate boards and non-profit organization as well. On the
other side, the major limitation of this paper is define the adverse outcome that comes from
stronger compliance along with right rules that directly impact ion the overall financial
performance of non profit organization.
7. Khieng, S. and Dahles, H., 2015. Resource dependence and effects of funding
diversification strategies among NGOs in Cambodia. VOLUNTAS: International Journal of
Voluntary and Nonprofit Organizations. 26(4). pp.1412-1437.
This journal includes the aim of evaluating resource dependence and its impacts of
funding diversification strategies on non profit organization. In this regards, one of the major
advantage of this journal is to cut down the dependency on extraneous resources that directly
impact sustainability of its funding. At initial level, non profit organizations are highly depend on
foreign that has effects on the overall funding and goal displacement as well. Along with this, the
main findings have importance of Resource dependency theory in NGOs. Financial support from
different commercialized activities is consider as a much foreseeable that possibly encourage
responsibility and at the same time also increase organizational autonomy.
8. Mitchell, G. E. (2014). Strategic responses to resource dependence among transnational
NGOs registered in the United States. Voluntas: International Journal of Voluntary and
Nonprofit Organizations. 25(1). 67-91.
This study is define that various and more affective transitional NGOs are certified in the
US in which they pursue with all the fund raise activities that help them in their global
operations. In this regards, external resources are includes for financial support that exposure
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them to resource dependence and at the same time also create the chances of external control.
The journal is also contribute to resource dependence theory with the help of determining
strategies.. Apart from this, findings are related with in-depth, face to face interviews that
organise with higher management and leader from transnational NGOs.
9. Su, C. M., Horng, D. J., Tseng, M. L., Chiu, A. S., Wu, K. J., & Chen, H. P. (2016).
Improving sustainable supply chain management using a novel hierarchical grey-
DEMATEL approach. Journal of Cleaner Production. 134. 469-481.
This journal based in the sustainable SCM and resource dependency theory in non profit
organisation. Mainly, it set of criteria that may aid in generating fund from the external resources
that may put crucial impact on the organizational performance and its behaviour while improving
welfare in society. Along with this, company is responsible for analysing all the external sources
in order to improving their overall performance level. In this, resource dependency theory
provide better support to NGO's to develop their potential image and at the same time also serve
better services that may assist in developing the society and economic condition as well.
10. Xia, J., Ma, X., Lu, J. W., & Yiu, D. W. (2014). Outward foreign direct investment by
emerging market firms: A resource dependence logic. Strategic management journal. 35(9).
1343-1363.
This type of study or journal evaluate and extends the resource dependence towards the
diversification for effective perceptive about foreign direct investment activities. As it is related
with the emerging market firms in which non profit organization operate their business with the
aim of increase social welfare. This journal also focus son contend that is relate to the
diversification logic as it important but less considered component of dependency resources. The
main results of this study is based in data that is related to analysis of non-profit organization.
Furthermore, it positively associated with the level of resource dependency theory that support in
improving the overall performance of non-profit organization.
CONCLUSION
From the above mentioned report it has been concluded that Resource dependency theory
play a crucial role in decision making activities and behaviour of the business. Mainly it is
related to the external sources that affect the overall performance of the non profit organization
within the nation. Thus, it is important for NGOs to evaluate all the external resources that
support them in enhancing the chances to attaining success at market. This is the main reason
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that Resource dependency theory is implement by the company to effectively fulfil their needs
related to the technology funding and many more external factors. This will contribute in making
organization able to run their activities in an appropriate manner.
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REFERENCES
Books and journals
Bergmann, A., Stechemesser, K., & Guenther, E. (2016). Natural resource dependence theory:
Impacts of extreme weather events on organizations. Journal of Business Research.
69(4). 1361-1366.
Coupet, J., & McWilliams, A. (2017). Integrating organizational economics and resource
dependence theory to explain the persistence of quasi markets. Administrative Sciences.
7(3). 29.
García-Meca, E., García-Sánchez, I. M., & Martínez-Ferrero, J. (2015). Board diversity and its
effects on bank performance: An international analysis. Journal of Banking & Finance.
53. 202-214.
Hambrick, D. C., Misangyi, V. F., & Park, C. A. (2015). The quad model for identifying a
corporate director’s potential for effective monitoring: Toward a new theory of board
sufficiency. Academy of Management Review. 40(3). 323-344.
Harkins, J., & Forster-Holt, N. (2014). Resource dependence and the exits of young firms.
Entrepreneurship Research Journal. 4(4). 323-349.
Isidro, H., & Sobral, M. (2015). The effects of women on corporate boards on firm value,
financial performance, and ethical and social compliance. Journal of Business Ethics.
132(1). 1-19.
Khieng, S. and Dahles, H., 2015. Resource dependence and effects of funding diversification
strategies among NGOs in Cambodia. VOLUNTAS: International Journal of Voluntary
and Nonprofit Organizations. 26(4). pp.1412-1437.
Mitchell, G. E. (2014). Strategic responses to resource dependence among transnational NGOs
registered in the United States. Voluntas: International Journal of Voluntary and
Nonprofit Organizations. 25(1). 67-91.
Su, C. M., Horng, D. J., Tseng, M. L., Chiu, A. S., Wu, K. J., & Chen, H. P. (2016). Improving
sustainable supply chain management using a novel hierarchical grey-DEMATEL
approach. Journal of Cleaner Production. 134. 469-481.
Xia, J., Ma, X., Lu, J. W., & Yiu, D. W. (2014). Outward foreign direct investment by emerging
market firms: A resource dependence logic. Strategic management journal. 35(9). 1343-
1363.
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