Herbert Simon on Resource Dependency Theory (Soc 160 mid-term question by Keith Rollag)


I believe Herbert Simon would initially ignore resource dependency theory, viewing it as misguided and focused at a different level of analysis than his own work. Later he would generally approve after noting the two theories are actually similar and complimentary.

Herbert Simon's Initial Views

Herbert Simon would immediately notice that bounded rationality and resource dependency primarily operate at different levels of analysis. Simon's cognitive psychological viewpoint is not consistent with Pfeffer's structural/ecological perspective. Instead of focusing on decisions, resource dependency examines and compares exchanges.

I believe Simon would initially find that resource dependency theory undervalues human rationality and capability of choice. There is an element of "environmental determinism" in Pfeffer's view that implies decision-making is more a reaction to environmental influences than purposeful action.

Simon would also contend that exchanges are merely the result of individual decision-making, and should not be defined as the starting point for organizational analysis. Simon would also defend his assumption that rationality (at least bounded rationality) is found at all levels of the organization, not just in the buffered core technology espoused by the resource dependency theorists. Finally, he would conclude that resource dependency doesn't explicitly address the presence of means-ends chains in organizational action.

Thus, Simon's initial reaction would be to discount and largely ignore resource dependency as failing to address the fundamental act of an organization -- the decision.

Simon's Later Views

However, as Simon follows the development of resource dependency theory, I think he would come to view Pfeffer's and his assumptions as rather complimentary.

Simon's later work acknowledges that the environment has a strong and varied impact on organizations and individual decision-makers. Upon further analysis Simon would find the structural/ecological viewpoint as reinforcing his social-psychological perspective. He would agree with Pfeffer's assertion that while environments do challenge and impact organizations, the organizations have the ability to "determine their fate" through proper decision making.

Simon would also find that both theories acknowledge that decisions must be considered in the individual (or environmental) context in which they were made. All action is influenced by higher-level actions, whether from upper management or external forces.

Simon would also notice that the modes of adaptation delineated in resource dependency theory (buffering, bridging, etc.) are also modes of "satisficing " in an environment of uncertainty. Both theories see organizations as "simplifying their inputs" to maintain control. Dependency strategies like contracting, joint ventures, and leveling are similar to the "performance programs" March and Simon use to explain how organizations react to changing environments.

Finally, Simon would realize that exchanges and decisions are merely two views of the same phenomena -- organizational action. One cannot have exchange-action without decisions, while decisions are viewed only through the actions that occur.

Conclusion

Thus, while Simon might still contend that resource dependency theory fails to properly value a sense of rationality in the organization, he would conclude that the theory does help explain the environment and context in which individual decisions are made within organizations. Simon would also agree that the environment does help shape the values and preferences of individuals.

In the end Simon would be a moderate supporter of resource dependency theory.