Resource Dependency and Buffering Strategies

Thompson (1967) proposed that "organizations seek to seal of their core technologies from environmental influences". "All organizations...are highly motivated to secure enough stability, determinateness, and certainty to be able to function effciently and effectively in environments that containt unknowns and uncertainties" (Scott p. 195). There are several strategies organizations can use:

Coding
Classifying or preprocessing inputs can aid in proper routing and filter out undersirable inputs (Scott p. 195, Katz and Kahn p. 65). This can include both raw materials and clients. However, coding is often imprecise and requires resources to do it. Furthermore, if coding simplifies inputs too much it reduces the ability of an organization to monitor the environment and maintain flexibility with it (Weick 1979).

Stockpiling
Gathering and storing critical raw materials before they are needed can help buffer against supply uncertainties or price fluctuations and maintain a consistent flow of inputs. However, the storage costs (both in underutilized capital and potential for damage, spoilage, obsolence etc.) must be considered.

Leveling
Organizations also attempt to reduce fluctuations in input or output environments (Scott p. 196). This occurs through contracting (inputs) or advertising (outputs) or special slack-time utilization incentives. Each has inherant costs and benefits.

Forecasting
Organizational also attempt to forecast environmental changes and proactively adapt to them. Predictions have associated costs and reliabilities.

Adjusting Scale
Changing the scale of the technical core is a common buffering strategy. Organizations expand and seek the optimal "economy of scale" (Thompson, 1967). Being large has distinct advantages -- more control over environments, more time to resist threats or adapt to them. (Pfeffer and Salancik, 1978). In other situations, however, downsizing may be the best strategy.