What is resource dependence and what does it have to do with transitions?


There are many charities, companies, and cooperatives working towards a more sustainable society. However, there are many issues holding back these organizations (Becker, 2017) and one of the biggest factors is resource dependence. In this post, we will talk about resource dependence, how it affects organizations, and what it means for a transition.

So what is resource dependence?

Resource dependence is when one organization has to rely on another organization for a resource. These resources can be for things as obvious as financing or as subtle as recognition. Through this resource dependence the organization with the resources is given influence and power over the organization without the resource. With this influence over others, organizations can do things such as influence prices and encourage particular organizational structures. However, for this to happen there must be few places where the resource dependent organization can acquire the resource and the resource must be valuable to the dependent organization.

For example: An organic grocery store can only purchase organic tomatoes from one local farm. Because the farm knows it is the only local source of organic tomatoes, it pressures the organic grocery story to also sell their bell peppers. The organic grocery store decides to sell the bell peppers even though they are more expensive then organic bell peppers other farms because they need to sell tomatoes in their store.

The concept comes from Resource Dependency Theory (Pfeffer and Salancik, 2003) which was developed in the 1970s. Under this theory resources and power are linked and can explain the behavior of organizations. The great thing about Resource Dependency Theory is that it intuitively makes sense- we have all witnessed people bow to pressure from someone who they need something from (this is what mafia movies are all about) and the same can happen to organizations.

How does resource dependency affect organizations dealing with sustainability issues?

Organizations working with sustainability issues often have more resource dependency then most. This is because they often are focused on issues of sustainability rather than pure economic success. This opens them up to having to rely upon others for resources. A major source of resource dependence for sustainability organizations is local government which often provides the necessary financing for these organizations to begin their work. This is often the case for community-based initiatives, which have previously been a focus on this blog.

The problem with organizations dealing with sustainability issues having so much resource dependence is that it impacts their work. This is because the organizations with the resources often make demands before handing over the resource. This can hurt the sustainability organization.

For example, a government agency might make being a non-profit a requirement for getting a particular type of grant. A sustainability organization may have originally planned to try gain money through commercial success, but finding it difficult to raise the initial money needed might change its activities so that it can meet the requirements of a non-profit and have access to this funding.

What does this mean for a transition?

Okay, so it is clear that resource dependence causes some organizations to have power over others and sustainability organizations are particularly vulnerable to the resource dependence which impacts their work. So how does this impact transitions? Well, if the sustainability organizations have to change the type of work they are doing (and the ways in which they change are in predictable, but that is a topic for another post) this can impact the way they can contribute to a transition.

For example, if an organization had planned on being a food cooperative but in order to get startup funding had to become a company. To be a company requires certain types of reporting and hierarchical organizational structures which tends to alienate volunteer workers. The organization had relied upon volunteer labor to get its work done and even with the startup funding cannot afford to hire workers. So, through discouraging volunteers becoming a company has hindered the ability of the organization to get its work done, thus leaving it wounded in its ability to contribute to a transition.

What is to be done about it? Sustainability organizations have tried a multitude of different things to reduce their resource dependence. There are organizations which have managed to avoid resource dependence by avoiding relying upon other organizations for resources. However, the downside can be that the lack of resources also hinders their work in its own way if they are unable to achieve their goals. Alternatively, some organizations collect fees from their members, effectively giving their members the power rather than an outside organization. What an organization is able to do depends largely on their goals and the type of work they wish to accomplish. Nonetheless, sustainability organizations and their funders need to keep an eye on the way resource dependence can negatively influence the ability of organizations to contribute to transitions.

Want to learn more? Check out:

Becker, S. L., F. Franke, and A. Gläsel. "Regime pressures and organizational forms of community-based sustainability initiatives." Environmental Innovation and Societal Transitions 29 (2018): 5-16.

Becker, S.L. From regimes to grassroots innovations: a framework for understanding the causes of the barriers to community-based initiatives and their impacts on transitions. PhD Thesis. University of Potsdam. 2017.

Pfeffer, Jeffrey, and Gerald R. Salancik. The external control of organizations: A resource dependence perspective. Stanford University Press, 2003.