DECIDING TO DISCOVER ENTREPRENEURIAL OPPORTUNITIES: A MULTI-LEVEL INVESTIGATION BASED ON INFORMATIONAL ECONOMICS AND RESOURCE DEPENDENCE THEORY

2016 ◽  
Vol 21 (02) ◽  
pp. 1650009 ◽  
Author(s):  
SHANSHAN QIAN ◽  
DALONG MA ◽  
CHAO MIAO
Keyword(s):  
Resource Dependence ◽  
Resource Dependence Theory ◽  
Power Imbalance ◽  
Specific Knowledge ◽  
Policy Makers ◽  
Entrepreneurial Opportunities ◽  
Dependence Theory ◽  
Multi Level ◽  
The Relationship ◽  
Practical Implications

Under what circumstance do entrepreneurs decide to discover entrepreneurial opportunities to start new businesses? Informational economics suggests when entrepreneurs possess prior specific knowledge, they decide to discover opportunities. This paper contributes to informational economics perspective by taking resource dependence theory into consideration. Utilizing a conjoint experiment and a multilevel analysis of 66 student entrepreneurs, we found that students’ prior specific knowledge significantly influences students’ decision to discover opportunities. Further, we found that power imbalance moderates the relationship between prior specific knowledge and students’ decisions to discover opportunities. Our paper has theoretical implications and practical implications for entrepreneurs, educators and policy makers.

Constraint absorption in emerging economies: the role of business groups

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Mueen Ahmed ◽  
Sankalp Pratap
Keyword(s):  
Emerging Economies ◽  
Resource Dependence ◽  
Resource Dependence Theory ◽  
Power Imbalance ◽  
Resource Based View ◽  
Content Type ◽  
Mutual Dependence ◽  
Dependence Theory ◽  
The Relationship

Purpose The purpose of this paper is to highlight the motivation for firms in emerging economies to engage in constraint absorption. It illustrates the mechanisms that enable business group (BG) affiliated firms to manage interdependencies vis-à-vis standalone firms in emerging economies. Design/methodology/approach The propositions outlined in this study are rooted in the theoretical lens of resource dependence theory (RDT). The authors integrate RDT with the resource-based view and institutional theory to explain the effect of BG affiliation on the relationship between the two types of interdependence (i.e. mutual dependence and power imbalance) and the likelihood of constraint absorption. Findings This paper theorizes that BG affiliation influences the relationship between mutual dependence/power imbalance and the likelihood of constraint absorption. However, if both the firms in a dyad are affiliated to a BG, the likelihood of constraint absorption is likely to be low owing to a process called “co-optation” even if mutual dependence or power imbalance between the firms is high. Originality/value This paper highlights how BG affiliated firms are better at managing contingencies in the external environment vis-à-vis standalone firms. This paper also advises managers that the type of organizational form is an important factor to be considered while engaging in constraint absorption in an emerging economy.

Politicians on the Board of Directors: Do Connections Affect the Bottom Line?

2005 ◽  
Vol 31 (3) ◽  
pp. 464-481 ◽  
Author(s):  
Amy J. Hillman
Keyword(s):  
Board Of Directors ◽  
Resource Dependence ◽  
Resource Dependence Theory ◽  
Bottom Line ◽  
Dependence Theory ◽  
The Board Of Directors ◽  
Regulated Industries ◽  
The Government ◽  
The Relationship

Resource dependence theory emphasizes the importance of linking firms with external contingencies that create uncertainty and interdependence. A critical source of external interdependency and uncertainty for business is government. One way to link a firm to the government is appointing ex-politicians to the board of directors. This study compares the boards of two groups of firms—those from heavily and less regulated industries—and finds the former group has more politician directors. Firms with politicians on the board are associated with better market-based performance across both groups, although the relationship is more pronounced within heavily regulated industries.

The Effect of Board Characteristics on Firm Environmental Performance

2011 ◽  
Vol 37 (6) ◽  
pp. 1636-1663 ◽  
Author(s):  
Charl de Villiers ◽  
Vic Naiker ◽  
Chris J. van Staden
Keyword(s):  
Environmental Performance ◽  
Resource Dependence ◽  
Resource Dependence Theory ◽  
Sensitivity Analyses ◽  
Board Independence ◽  
Board Characteristics ◽  
Dependence Theory ◽  
The Board Of Directors ◽  
Board Roles ◽  
The Relationship

This study investigates the relationship between strong firm environmental performance and board characteristics that capture boards’ monitoring and resource provision abilities during an era when the natural environment and the related strategic opportunities have increased in importance. The authors relate the proxy for strong environmental performance to board characteristics that represent boards’ monitoring role (i.e., independence, CEO-chair duality, concentration of directors appointed after the CEO, and director shareholding) and resource provision role (i.e., board size, directors on multiple boards, CEOs of other firms on the board, lawyers on the board, and director tenure). The authors provide evidence consistent with both theories of board roles. Specifically, consistent with their agency theory–driven predictions, the authors find evidence of higher environmental performance in firms with higher board independence and lower concentration of directors appointed after the CEO on the board of directors. Consistent with resource dependence theory, they show that environmental performance is higher in firms that have larger boards, larger representation of active CEOs on the board, and more legal experts on the board. Their findings are generally robust to a number of sensitivity analyses. These findings have implications for managers, firms, shareholders, and regulators who act on behalf of shareholders, if they are interested in influencing environmental performance.

Resource Dependence and Government-ngo Relationship in China

2016 ◽  
Vol 8 (1) ◽  
pp. 27-51 ◽  
Author(s):  
Qun Wang ◽  
Yanran Yao
Keyword(s):  
Board Of Directors ◽  
Resource Dependence ◽  
External Environment ◽  
Resource Dependence Theory ◽  
Organizational Characteristics ◽  
Comprehensive Review ◽  
Dependence Theory ◽  
The Government ◽  
The Relationship ◽  
Alternative Theories

As the civil society and corporatism theories have been frequently challenged recently, alternative theories emerged to investigate the government-ngo relationship in China. Some new theories are largely related to resource dependence or share core ideas with it. This paper conducts a comprehensive review of the resource dependence theory. It identifies four groups of variables (organizational characteristics, board of directors, attitude and value, and external environment), finds support for their relevance from both Western and China scholarship, and applies them to the Chinese context. The resource dependence theory has the potential of empirically examining the relationship without over-focusing on the state or society. It is capable of explaining the dynamic and diverse relationships between the government and various ngos in China.

Power Imbalance, Mutual Dependence, and Constraint Absorption: A Closer Look at Resource Dependence Theory

2005 ◽  
Vol 50 (2) ◽  
pp. 167-199 ◽  
Author(s):  
Tiziana Casciaro ◽  
Mikolaj Jan Piskorski
Keyword(s):  
Mergers And Acquisitions ◽  
Resource Dependence ◽  
Resource Dependence Theory ◽  
External Control ◽  
Power Imbalance ◽  
Public Companies ◽  
Mutual Dependence ◽  
Model Account ◽  
Dependence Theory ◽  
Powerful Explanation

Despite ubiquitous references to Pfeffer and Salancik's classic volume, The External Control of Organizations, resource dependence theory is more of an appealing metaphor than a foundation for testable empirical research. We argue that several ambiguities in the resource dependence model account in part for this and propose a reformulation of resource dependence theory that addresses these ambiguities, yields novel predictions and findings, and reconciles them with seemingly contradictory empirical evidence from past studies. We identify two distinct theoretical dimensions of resource dependence, power imbalance and mutual dependence, which in the original theory were combined in the construct of interdependence and yet have opposite effects on an organization's ability to reduce dependencies by absorbing sources of external constraint. Results from a study of interindustry mergers and acquisitions among U.S. public companies in the period 1985–2000 indicate that, while mutual dependence is a key driver of mergers and acquisitions, power imbalance acts as an obstacle to their formation. We conclude that our reformulation of the resource dependence model contributes to realizing the potential of resource dependency as a powerful explanation of interorganizational action.

Exploring the Relationship between Interlocking Directorates and Fundraising Capacity

2015 ◽  
Vol 7 (1) ◽  
pp. 139-160
Author(s):  
Kegao Yan ◽  
Oulin Luo
Keyword(s):  
Resource Sharing ◽  
Resource Dependence ◽  
Resource Dependence Theory ◽  
Negative Influence ◽  
University Education ◽  
Interlocking Directorates ◽  
Education Foundations ◽  
Dependence Theory ◽  
Alumni Associations ◽  
The Relationship

In China, most university education foundations seek to increase fundraising capacity through the strategy of interlocking directorates, establishing a resource-sharing platform with alumni associations. Supported by resource-dependence theory and social network theory, based on data from a sample of 88 foundations, this study tests the effectiveness of the strategy of interlocking directorates. The result of the study shows that the secretary-general intensity has a significant negative influence on fundraising capacity, while the board-chairperson intensity and the interlocking range have no significant influence on fundraising capacity. Under the existing management system, university education foundations can get beyond the predicament of the ineffective strategy of interlocking directorates by further standardizing their systems and procedures for appointing directors, giving greater impetus to the transformation of individual capital into social capital, and promoting professional and specialized operations.

Impact of open innovation on organizational performance in different conflict management styles: based on resource dependence theory

2020 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Ting Wang ◽  
Jianlin Wu ◽  
Jibao Gu ◽  
Lingyu Hu
Keyword(s):  
Conflict Management ◽  
Organizational Performance ◽  
Resource Dependence ◽  
Resource Dependence Theory ◽  
Management Styles ◽  
Conflict Management Styles ◽  
Content Type ◽  
Dependence Theory ◽  
The Impact ◽  
The Relationship

Purpose Firms often encounter complicated external relationships and conflicts in inbound and outbound open innovation (OI). Conflict management significantly affects innovation results. Guided by resource dependence theory (RDT), this study aims to examine the moderating effects of conflict management styles in the relationship between OI and organizational performance (OP). Design/methodology/approach This study focuses on manufacturing and service firms in China, with the respondents composed of senior managers. Using hierarchical regression analysis, data from 270 firm samples are used to empirically test the hypotheses. Findings Inbound and outbound OI openness positively affects OP. Cooperative conflict management positively moderates the relationship between inbound OI openness and OP, whereas it negatively moderates the impact of outbound OI openness on OP. By contrast, competitive conflict management positively moderates the relationship between outbound OI openness on OP. Research limitations/implications Guided by RDT, this study explores the relationship between OI and OP and the moderating role of conflict management styles. However, it does not measure the level of resource dependence, which is among the future research directions for further validating the results of this study. Originality/value This study is among the first to investigate the impact of OI on OP in different conflict management styles. Findings suggest that choosing a suitable conflict management style may strengthen the positive effects of OI on OP.

The value of outside director experience to firm strategies: Evidence from joint ventures

2014 ◽  
Vol 20 (3) ◽  
pp. 387-409 ◽  
Author(s):  
Jung-Ho Lai ◽  
Li-Yu Chen ◽  
I-Ju Chen
Keyword(s):  
Resource Dependence ◽  
Joint Venture ◽  
Resource Dependence Theory ◽  
Strategic Performance ◽  
Firm Strategies ◽  
Dependence Theory ◽  
Outside Director ◽  
Direct Linkage ◽  
Industry Affiliation ◽  
The Relationship

AbstractThis study investigates the effect of outside director experience on the performance of a firm's joint venture (JV) engagements, a type of strategic move where the influence of board remains under-investigated despite directors’ active participation in the decision-making process. By examining the direct linkage between director experience and strategic performance, our research presents the first direct evidence of the value outside director experience has for a firm's strategic engagements; this has previously been exclusively assessed by indirect indicators. We address this important issue in the following three ways. First, we explore what type of director experience contributes most to JV outcomes. Second, we investigate what circumstantial factors significantly influence the value of director experience. Lastly, we analyze whether incentive mechanisms moderate the relationship between director experience and firm performance. The results confirm the value of director experience gained from JV engagements but not from relevant industries. In addition, executive experience and the industry affiliation of the JV significantly moderate the value of director experience. Finally, experienced directors with large shareholdings outperform those with experience but limited stakes in the firms’ equity, justifying the necessity to motivate directors’ governance efforts despite their existing fiduciary obligation to shareholders. Our study contributes to agency theory by indicating that director experience holds a significant influence on a firm's strategic performance, an issue which has long been neglected in agency-based governance research. It also contributes to resource-dependence theory by providing a direct measurement of directors’ experiential assets, which have so far been exclusively assessed by indirect indicators. Finally, findings from this study can elucidate the long-standing question of how a firm can realize the purported benefits JVs provide by introducing a vital yet rarely explored factor: board experience.

scholarly journals An Evaluation of the Changing Nature of Power-Dependence Relations in Organizations Within the Context of the Resource Dependence Theory

2020 ◽  
Vol 9 (4) ◽  
pp. 165-179
Author(s):  
AHMET ILHAN
Keyword(s):  
Resource Dependence ◽  
Environmental Changes ◽  
Balance Of Power ◽  
Resource Dependence Theory ◽  
Theoretical Discussion ◽  
Power Dependence ◽  
Dependence Relations ◽  
Dependence Theory ◽  
Power And Dependence ◽  
The Relationship

Resource dependence theory examines the activities carried out by locating and managing power and dependence relations, that form as a result of the relations between organizations, according to the conditional changes in the environment in which they operate. However, organizations need to develop strategies and act according to environmental changes in order to sustain their maintain their survival in their environment. At this point, within the context of resource dependence theory, on the basis of the relationship between an organization and its environment, the balance of power-based relations are crucial within the scope of their dependence on necessary resources and the struggle to obtain these resources. The main problem of this study is to consider the changing nature of power-dependence relations between organizations within the context of resource dependence theory. The theoretical discussion of power-dependence relations between organizations has been supported and explained by functional, structural, and institutional approaches. Resource dependence theory is included in functional approaches and considers an organization as a social system that tries to adapt to the conditional constraints of its environment. Accordingly, the organizations of resource dependence theory included in functional approaches are determined according to how much their performances contribute to their survival, their ability to solve organizational problems, and coalitions with various abilities and interest groups. Keywords: Resource Dependence Theory, Power, Dependence, Environment, Organization.

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