Thirty years have passed since Pfeffer and Salancik's seminal work on resource dependence theory (RDT). During this time RDT has been applied broadly across the research domain to explain how organizations reduce environmental interdependence and uncertainty. In this review, the authors assess the conceptual development, empirical research, and application of RDT. They structure their review around the five options that Pfeffer and Salancik propose firms can enact to minimize environmental dependences: (a) mergers/vertical integration, (b) joint ventures and other interorganizational relationships, (c) boards of directors, (d) political action, and (e) executive succession. The authors summarize past work, synthesize contemporary thought, and propose future research directions.
Boards of directors serve two important functions for organizations: monitoring management on behalf oí shareholders and providing resources. Agency theorists assert that effective monitoring is a function ol a board's incentives, whereas resource dependence theorists contend that the provision of resources is a function of board capital. We combine the two perspectives and argue that board capital affects both board monitoring and the provision oí resources and that board incentives moderate these relationships.
Most research on corporate directors has focused on two roles: agency and resource dependence. While these two roles are theoretically and practically distinct, previous research has used the same classification scheme for measuring board composition regardless of role examined. Our paper examines the resource dependence role of directors and posits that the widely used insider/outsider categorizations do not adequately capture this role of directors. A taxonomy of directors is presented specifically for studying the resource dependence role. We then apply the taxonomy to a sample of US airline firms undergoing deregulation, and examine how board composition changes parallel the changing resource dependence needs of the firms. We conclude that the board's function as a link to the external environment is an important one, and that firms respond to significant changes in their external environment by altering board composition.
Boards of directors have received considerable attention recently, both in practitioner and academic venues. A large body of literature examines the agency role of directors, referring to the governance function in which directors serve shareholders by ratifying the decisions of managers and monitoring the implementation of those decisions (
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