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Resource Dependence Theory

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Resource Dependence Theory

Resource dependence theory (RDT) originated in 1970s, is the analysis of how the external resources of the organization affects the different conducts of the organization (Ghosh, 2019). To understand organization-environmental relations, RDT has a premier framework; however, a factual synthesis to predict it is still lacking. Every organization depends upon different resources for smooth and easy processing of the organizational work. RDT is important because if the ability of an organisation to accumulate, modify and exploit raw materials is faster than the fellow competitors, then it can become fundamental to success. Different attributes of resource include labor, capital and raw material, these are the critical resources which a company does requires for planning different aspects of work processing (Orakwue and Iguisi, 2020). The multi-dimensional resources require especial initiatives to keep a balance between them. The influence of the external factors on organizational behaviour is recognized by this theory and by its context managers can act accordingly to reduce dependency as well as environmental uncertainty. This theory is one of the key factors in making non-profit organizations .more commercial in recent time.

RDT plays an important role in understanding how a company interacts with their suppliers and vendors and also how to target patrons and how to conserve resources for business. This theory can also be adopted to relate the interaction of certain units or departments inside an organization with each other, in order to attain access to the resources when needed. There is a need to gain power over different resources in a profitable way because it impacts the behaviour of the organization as well as the activities of management to guide the corporation and individual units. External resources are actually necessary for each and every type of business irrespective of the niche or sector they are in, and RDT states that patrons are the most vital external resource to make a business successful. In order to gain power in marketplace to get a control over resources and to be strongest among the competitors, companies need to make a decision. This ultimate theory works like a backbone for many decisions taken by managers and executives which helps to guide the company

Factors affecting resource dependence:

  1. Prevalence of resources

  2. Importance of resources 

  3. Control of resources.

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