Resource Dependency and Bridging Strategies
Emerson (1962) defined that "the power of A over B is equal to, and
based upon the dependence of B upon A" (p. 33 quoted in Scott p. 198).
B'd dependence is proportional to the importance B places upon the goals
mediated by A and inversely proportional to the availability of these goals
to B outside the A-B relationship (Scott p. 198).
Thus power is a function of the exchange relationship, and the power of
an individual or organization varies by situation. In a zero-sum power situation
when one gains power another loses it, but it's also possible to increase
the power of both parties through increased interdependence. Bridging strategies
increase interdependence. In symbiotic interdependence groups exchange unlike
resources. Power is created with the perceived importance of these resource
is different between parties. In competitive interdependence two groups
compete for the same resources of another party (Scott p. 198)
Pfeffer and Salancik claim that the most common solution to the problems
inherant in interdependence is to increase the mutual control over each
others resources (Pfeffer and Salancik, 1978). Some common bridging strategies
This is actually a pre-bridging strategy, most often reflected in defining
and defending the organization's domain (Scott p. 198). This can include
acts like developing alternative suppliers of a critical resource.
But bargaining often involves negotiation between two organizations (Katz
and Kahn, 1978). Bargaining behavior is moderated by the boudary role person
and their trust relationships with their counterpart in the other organization
and with their internal members.
Thompson states that contracting is "the negotiation of an agreement
for the exchange of performances in the future" (Thompson 1967 in Scott
p. 199). They are attempts by organizations to reduce uncertainty by coordinating
future behavior with other organizations. There is still some inherant uncertainty
in any contract (see Williamson, 1975) but they help define obligations
between parties. Also their quasi-legal status often opens them up to future
renogiation and bargaining.
Selznick (1949) first described co-optation as the incorporation of representative
of external groups into the internal decision-making or advisory structure
of an organization (Scott p. 199). Studies of interlocking directorates
is often a focus on co-optation. They show that often board appointments
are used to build relationships with important parts of the environment
of which they are dependent (see studies in Scott p. 200).
Co-optation is also used in public agencies and non-profit organizations.
Many federal programs get local representation for this purpose, though
many critized this strategy as merely legitimizing federal intervention
(Scott p. 201). Like Selznick found this strategy can backfire when local
interests subvert the federal goals.
Stinchcombe (1985) identified a new form of bridging that combines the "arms
length" feature of contracts with the control features of authority
relations (Scott p. 201). They are used in highly complex and uncertain
interdependencies (like between defense contractors and governments). The
contracts give intermediate control rights to exchange partners that normally
would be the domain of internal decision-making. "Such hierarchical
rights undermine the autonomy of the independent contractors... (and become
more like a joint venture) -- Scott p. 202. They are used in large, high
risk projects like defense projects and large construction.
In joint ventures two or more firms create a new organization to pursue
a common interest, though there is less pooling of resources than in a merger.
They can occur between competitors or exchange partners. They most often
occur when competition is high and event horizons are short. Sometimes joint-ventures
of R&D nature are done in research consortia. Other times they allow
two firms to capitalize on each other's strengths and to compensate for
one's own weaknesses.
In mergers two more more organizations combine to form one organization.
Three major types of mergers are (Scott p. 203):
1. Vertical Integration
Organizations at different stages of the production process (that are symbiotically
related) merge with one another. They most often occur in organizations
that are already interacting with each other (Pfeffer, 1972).
2. Horizontal Merger
Organizations performing similar functions merge together to form a larger
organization. They tend to occur when competition is high (Pfeffer 1972).
Organizations acquire other firms with little relationship to their core
business. The extreme form of diversification is a conglomerate.
Different types of mergers have occured more frequently at different stages
of history (Chandler, 1990).
Besides the resource dependency approach above, Williamson (1975) argues
that transaction costs can also help explain vertical integration -- "as
the assets required by the firm become more specific, firms will elect to
produce them internally to avoid dependence on a small number of external
suppliers" (Scott p. 204). This has been supported by various studies
(see Scott p. 204). However, it was also shown that comparative production
costs is a major decision factor (i.e, can firms produce the required assets
more cheaply internally?).
"Associations are arrangements that allow similar..organizations to
work in concert to pursue mutually desired objectives" (Scott p. 205).
The members can be similar or dissimilar, depending on the objectives of
the association. Individual organizations join associations to "garner
resources, secure information, exercise influence, or obtain legitimacy
and acceptance" (Scott p. 205).
Trade associations are a particular form with varying degrees of power (lower
in US, high in Japan and Western Europe).
Governments affect organizational exchanges by specifying what types of
exchanges are permitted and by also exchanging resources themselves with
organizations. Goverments have varying degrees of authority over organizations,
though these organizations can lobby goverments to influence both the demography
and decision-making of government bodies.
Goverments exert varying degrees of monitoring and regulation of organizational
sets, which can have unintended consequences (protection of current environment,
favoritism, restricting competition, fixing prices and profits, etc.). While
goverments extract taxes from organizations, they can also provide resources
such as tax breaks, incentives, subsidies, or simply as a purchaser of products