The External Control of Organizations: A Resource Dependence Perspective

Posted: 4 Nov 2009

See all articles by Jeffrey Pfeffer

Jeffrey Pfeffer

Stanford Graduate School of Business

Gerald R. Salancik

affiliation not provided to SSRN

Date Written: 1978

Abstract

Examines how external constraints affect organizations and how to design and manage organizations under such constraints. Taking a resource dependence perspective on organizations, the book discusses basic components of control, including the concentration and availability of resources, the role of managers, interdependence among organizations, the environment, and organizational structure. Two case studies, one on Israeli managers and one on American defense contractors, exemplify how governmental external control affects organizational choice. In the case of the Israeli managers, the managers' responses regarding the size of the return they would be willing to give up to invest in a government-created development area were positively correlated with the proportion of the firm's government sales. Similarly, the study of American defense contractors examined how willing they were to comply with affirmative action laws for employment of women, finding a strong correlation between positive replies to women seeking employment and government dependence. Dependence is not restricted to the government, however, as firms are heavily reliant upon resources made available to them from other organizations. Despite external control, the organization is able to achieve internal control to a certain extent, stabilizing activities by institutionalizing roles and patterns of behavior. The question of power within organizations requires further study, as organizations are coalitions of interest and only some interests and goals are accomplished at the expense of others. Organizations also serve to create and transact ideas and the influence these ideas create, so that influence and control are multidirectional. Conclusions show that organizations are not autonomous entities, but are reliant upon the larger network of organizations within the environment - through which they must strive to manipulate resources to survive. (CJC)

Keywords: Resource dependency, Interdependence, Environmental constraints, Networks, Social norms, Organizational objectives, Firm management, Organizational structures, Environment, Managers, Resource management, Regulations, Firm control, Boards of directors, Interfirm alliances, Social structures

Suggested Citation

Pfeffer, Jeffrey and Salancik, Gerald R., The External Control of Organizations: A Resource Dependence Perspective (1978). University of Illinois at Urbana-Champaign's Academy for Entrepreneurial Leadership Historical Research Reference in Entrepreneurship, Available at SSRN: https://ssrn.com/abstract=1496213

Jeffrey Pfeffer (Contact Author)

Stanford Graduate School of Business ( email )

655 Knight Way
Stanford, CA 94305-5015
United States

Gerald R. Salancik

affiliation not provided to SSRN

No Address Available

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