Why Your Organization Should Understand Resource Dependency Theory

Scarcity of resources. It is a problem that individuals and organizations attempt to solve on an economic, political, and social level on a regular basis. Contentment with wealth, power, or influence can be elusive yet motivating if managed properly. For the public sector, it is typically management of scarce resources that can enhance or hinder the efficacy of an organization. Resources within government specifically can range from labor to appropriations to political capital. Regardless of the type of resource though, it is advantageous for the federal manager to have a grasp of resource dependence theory.

Although resource dependence theory is a few decades old, it is gaining prominence once again as a result of fiscal constraints and enhanced external scrutiny. Within the resource dependence paradigm, such constraints and scrutiny should be considered elements of the environment by federal managers. A recent article in the Public Administration Review (Malatesta & Smith, 2014) describes resource dependence theory as the framework in which organizations come together to secure resources critical to their survival and growth. Through this lens, the environment is all of the actors, activities, and behaviors that may be outside the control of managers but inside their sphere of influence.

Resource dependence strategies largely fall on a continuum that represents complete autonomy on one end with coordination on the other. Taking into account the organization’s environment, federal managers must decide what level of dependency is tolerable to solve the scarcity of resources problem. Given that hiring additional personnel tends to be a protracted process with outsourcing offering many of the same complexities, strategies for identifying where an organization should fall on the autonomy continuum are critical in determining the organization’s identity and direction. Malatesta and Smith (2014) offer the following potential strategies for resource dependence:

• Joining an association
• Forming alliances
• Contracting
• Co-opting
• Merging

As fiscal tensions ease in Washington DC, the coming environment may present increased opportunities for federal managers to pursue solutions to the scarcity of resources dilemma. The forthcoming 2015 is an excellent place to start for federal managers to start. Understanding what another office may be doing well and pursuing strategies such as forming alliance and co-opting can lead to a greater awareness of your organization’s resource dependence.

Aside from requesting more funding, what are some ways that your organization is solving the scarcity of resource issue?

References

Malatesta, D. & Smith, C. (2014). Lessons from resource dependence theory for contemporary public and nonprofit managers. Public Administration Review, 74(1). 14-25.