How resource dependency theory helps in Managing Nonprofit Organizations:
An annotated bibliography
Raffo, D. M., Clark, L. A., & Arik, M. (2016). Strategic responses of nonprofit organisations to the economic crisis: Examining through the lenses of resource dependency and resourced-based view theories. Academy of Strategic Management Journal, Volume 15, Issue 1, p48-70, http://jewlscholar.mtsu.edu/handle/mtsu/5119
Raffo, Clark & Arik (2016) examine the strategies that the nonprofit sector used when responding to the economic crisis of 2008. The authors draw on the resource dependency theory as a framework for their analysis to explore how nonprofit organizations used numerous strategies to manage their operations during the 2008 economic downturn. The authors obtained data through surveys of 280 nonprofit firms from the Nashville metropolitan statistical area (MSA), where the nonprofit reported on their strategic response to the economic downturn. The actual firms surveyed were 306, but the usable firms for analysis were 280.
The article’s main findings indicate that the nonprofit firms that had relatively less funding had a likelihood of having a low level of a strategic response to the crisis. One of the strengths is that the authors conduct a regression analysis to link resource dependency theory to managing nonprofit organizations where their findings assert that a nonprofit that had a lower dependency score (many diverse sources of funds) had a high strategic response level during the 2008 downturn. This study’s main limitation is that the data was gathered through a self-reported survey that may not capture the vital information from the nonprofit firms that did not survive the 2008 economic crisis to provide their data. Therefore, there is a need for additional research that will provide a clearer insight into whether nonprofit organisations should diversify their resources or centralized resources are preferable. This article will form the basis of my final research since it addresses how to manage nonprofit organizations in an economic crisis using the resource dependency theory.
Yeager, V. A., Zhang, Y., & Diana, M. L. (2015). Analyzing determinants of hospitals’ accountable care organizations participation: A resource dependency theory perspective. Medical Care Research and Review, 72(6), 687- 706. doi.org/10.1177/1077558715592295
Yeager, Zhang & Diana (2015) use the resource dependency theory to examine organizational characteristics and external environment characteristics that relate to hospitals’ participation in Accountable Care Organizations (ACOs). The authors used both surveys and literature reviews on secondary data to obtain data for their study. For their primary survey, the authors surveyed 6,300 different hospitals where 431 hospitals were actual members of Medicare ACOs. The authors’ findings indicate that hospitals that operate in environments that are more munificent and more competitive are more likely to engage with the ACOs. These findings are supported by their bivariate analyses that show that the ACO hospitals were found in areas that had high competition, a less dynamic environment, and high munificence.
One strength of this article is that the authors measured the actual competitive environments by calculating the health maintenance organization penetration while munificent environments were determined by calculating the income per capita. One of the limitations of this study is that despite providing an insight into the external factors in the environment related to ACO hospital participation, information was unavailable regarding the specific characteristics of the hospitals that were likely related to making decisions to participate in the ACO. The authors conclude that when the ACO participation characteristics are fully understood, they will be essential for further research that will also examine the benefits of ACO participation in managing the nonprofit healthcare organization. This article addresses my research question when it connects the resource dependency theory and the issues that revolve around joining ACO. For instance, according to the resource dependency theory, the authors state that a dynamic environment may not assure resource sustainability. Hence, the authors depict that ACO participation represented a resource-intensive and complex initiative for hospitals because they are required to invest significant resources to establish an organizational structure suitable for ACO and leadership management needed to coordinate the health services among the partners in ACO.
AbouAssi, K. (2015). Testing resource dependency as a motivator for NGO self-regulation: Suggestive evidence from the global south. Nonprofit and Voluntary Sector Quarterly, 44(6), 1255-1273. doi.org/10.1177/0899764014556774
AbouAssi (2015) reviews the concept of self-regulation of the nonprofit organizations from the resource dependency theoretical perspective. The author uses the existing literature and surveys to study the resource dependency theory and how it provides valuable guidance to the leaders and managers regarding self-regulatory practices when managing the nonprofit organization. AbouAssi (2015) uses regression analysis to evaluate data obtained from the nongovernmental organizations in Lebanon through online and mail surveys within 45 days. The participants were 153 nonprofit organizations in Lebanon, while the respondents were only 49 organizations, which indicated a response rate of 32%. This article’s findings indicate moderate support for the claims that diversification of sources of funds for NGOs has a positive correlation to the practices of self-regulation.
One strength of this article is that the author uses both surveys and literature reviews to conduct the study by applying regression analysis on the data obtained. However, this study’s limitation is that the results obtained are merely suggestive because the self-regulation of the subset NGOs in Lebanon does not necessarily depict an adaptive or a resource-based perspective, and it could be depicting a proactive and voluntary adherence to informal expectations and norms. Therefore, the author indicates a need for further research to demarcate between plausible alternatives and resource dependency explanations. This article addresses my research question by incorporating the concept of resource dependency theory and the leadership and management of the NGOs in Lebanon, making it a useful supplementary information for my research on how resource dependency theory helps in Managing Nonprofit Organizations.
Malatesta, D., & Smith, C. R. (2014). Lessons from resource dependence theory for contemporary public and nonprofit management. Public Administration Review, 74(1), 14-25. https://doi.org/10.1111/puar.12181
Malatesta & Smith (2014) explore the leadership and management of nonprofit organizations investigate new strategies to address the issues and challenges associated with having limited resources. In this case, the authors use the resource dependency theory to develop valuable guidance for leaders and managers of nonprofit organizations who wish to understand the consequences and considerations that are related to different types of partnering. This study is qualitative research because the author uses data obtained solely from other sources, and they infer their findings from this literature review. Since this research was composed of a literature review, no samples were collected or participants selected for the study. Instead, the authors used peer-reviewed sources to give an insight into the subject. In their findings, the authors assert that the resource dependency strategy is used based on the coordination level need and the autonomy degree that the organizations intend to achieve or preserve. For instance, the authors imply that if a nonprofit organization engaged in mergers, they will lose autonomy and need intensive coordination in their leadership and management. The authors’ findings reveal that for organizations that prefer to retain their autonomy and have less coordination in their leadership and management, they should go for co-opting because it effectively reduces dependency.
One strength of this article is that it revisits the basic knowledge of resource dependence theory and explains it in a simplified way that is easily accessible by practitioners and researchers. They review imperial research on co-opting, alliances, and merging to provide some broad lessons for managers. One limitation of the study is that the resource dependency theory does not give precise information on the organizations that will prosper in their sector by reorganising or establishing new practices. The authors conclude that there is a need for additional research on their article to understand the specific motives for different relationships among the organization. While this article does not directly address my question, it will be a useful supplementary source in addressing the leadership entailed in alliances, mergers, and co-opting in terms of the resource dependency theory.
De Los Mozos, I. S. L., Duarte, A. R., & Ruiz, Ó. R. (2016). Resource dependence in non- profit organizations: Is it harder to fundraise if you diversify your revenue structure? VOLUNTAS: International Journal of Voluntary and Nonprofit Organizations, 27(6), 2641-2665. https://link-springer- com.libproxy.murdoch.edu.au/article/10.1007/s11266-016-9738-8
De Los Mozos, Duarte & Ruiz (2016) explore how fundraising efficiency is affected by diversification changes in revenue sources for nonprofit organizations. The authors use data obtained through surveys on nonprofit organizations provided by the Internal Revenue Service (IRS). This study is both a qualitative and quantitative study since it involves analyzing the data using the Arellano-Bond Model regression model of the 10358 US nonprofit organizations sample collected between 1997 and 2007. This study’s findings indicate that there is a negative impact on the efficiency of fundraising when the nonprofits alter their dependence locus and change their diversification patterns.
One strength apparent in this study is that while it finds out that there is a negative relation between revenue diversification and the ability if NPOs to raise funds being attributed to internal organizational factors, the article goes ahead to explain these factors. For instance, the authors state that organizations that operate in an uncertain environment require complex leadership and management. One limitation of this study is that it does not fully consider demographic factors because new organizations may have limited funding sources and may eventually develop diversified sources as they grow older. The authors conclude that the effect of diversification of revenue varies when the size of nonprofit organization are put into considerations. However, the authors acknowledge a need for further studies on the methodology of revenue diversification to develop an informed insight into how resource dependency theory can be used in managing the nonprofit organizations. This article addresses my question of how resource dependency theory helps in Managing Non-Profit Organization because it connects on the complexity of leadership and management in ascertaining the level of diversification of revenue sources for nonprofit organizations. This connection makes this article one of my primary sources for my research question.