Exchange and resource dependency

In responding to a request for information about a master’s thesis produced many years ago while pursuing such a designation in Information Science, I have come across some related work that still makes sense. Exchange Theory and Resource Dependency Theory helped support the lens through which I examined the progress (and eventual demise) of the Social Development Network. Sharing the summary of these here will help me remember their implications. As my friend and mentor Don Forgie always reminds me, “There is nothing as practical as a theory that works.” Thanks Don.

1.Exchange theory overview 

Summarized from Emerson (1972a, 1972b) Cook (1977, 1982)
Primary variables Probability of stimulus occurrence in a situation in conjunction with a specific action. (pyk) Probability of actor behavior occurrence in a specific situation when stimulus occurs as a result of that action. (pxi) Power processes within exchange relations involving organizations, i.e. maintaining and acquiring power.
Stability & Change Decrease in probability of stimulus occurrence increases behavioural variation, potentially ending exchange 

Balance achieved by: 1) decreasing the value of the stimulus; 2) increasing the number of alternatives through network expansion

Behavior stabilizes in conditions of environmental stability.Over time, set o f relations tends to stabilize.

3) increasing the value of a behavior of the less powerful actor; 4) reducing alternatives for the more powerful through coalition formation

Given specialization and scarcity, organizations seek to reduce uncertainty by creating a negotiated environment.
Choice If the stimulus occurrence is dependent on a particular situation, that situation becomes a conditioned reinforcer and thereby limits future choice. The strength of the conditioned reinforcer is non-linear under changing reinforcement schedules and not related to level of deprivation, indicating value and uncertainty.
Dependence In any exchange relation, an actor is dependent on the situation for the stimulus occurrence. Extent of dependency is the strength of the conditioned reinforcer Dependency decreases with increased alternatives.Dependency varies directly with value and increases or decreases with more or less uncertainty.

In an exchange relation, dependency tends towards balance over continuing transactions.

Power (function of the relationship, level of potential cost to an actor) Power advantage is equal to dependence and imbalance. Use of power by first actor over second will increase until it is offset by costs to the first. Power increases as the number of resources mediated increases. Coalition formation by less powerful actors consolidates resources and reduces advantage of more powerful actor.
Cost (opportunities not taken) If transactions within one exchange relation preclude transactions in other relations, then cost first increases then decreases with continuing transactions within that relation. Organizations seek exchange relationships which cost the least in loss of autonomy and power.
Structural components Exchange network is a set of three or more actors each providing opportunities with at least one other actor.Two exchange relations are connected if transactions in one are a function of transactions in the other. Positive if increasing their likelihood; negative if decreasing. Social structure consists of enduring relations among specified actors.Network of exchanges creates a specialization of activities and division of labour. Competitive arrangements can become cooperative through differentiation, specialization or segmentation.
Centrality Measured as the distance between two points in a network. In balanced network of exchanges, more central positions enjoy power advantage. Location within a network is a structural component of power . Impact of location occupant on resource flows and decision making are related attributes.
Communication/ Information Interaction is necessary but not sufficient for exchange relation.

2.Appendix 2 – Resource dependency theory overview

Summarized from Pfeffer & Salancik (1978)
Organizational survival Survival is synonymous with effectiveness. Effectiveness determined by managing demands of interest groups who provide resources and support.Organizations attempt to avoid dependency and to make other dependent on them.

 

Organizational environment Environment viewed at three levels 1) all interconnected individuals and organizations related through interactions with focal org., 2) set of individuals and organizations with direct interaction, 3) perception and representation of the environment by the focal organization.
Constraints Response probability increases under conditions of constraints, regardless of actor. These include physical [technical], informational, and preferential. 
Management Management chooses organizational adjustment required by environment and constraints.Management behaviour strongly affected by attention to these external demands.

 

Stability/Change External environment tends to instability and is source of problems as well as resources.Interactions persist to reduce uncertainty.

Tightly coupled relationships more difficult to change, but more destabilizing when they do. Loose couplings are more stable when disturbed.

 

Power Power accrues to the less dependent organization in an asymmetrical exchange.Power manifested in possession of resources, control of access to resources and by actual use of resources.

 

Structural components Individuals and groups come together for exchange activities. Patterns of interaction are persistent and determined by concentration of power, availability of resources and connections among organizations.Actions taken to reduce uncertainty may alter connectedness and transaction flows thereby creating new uncertainties.

 

Communication/ Information Organizational units focus on certain aspects of environment; screen out and protect internal operations from external influence.Information is shaped by connections. What is or is not collected affects decision making.

Information systems collect data from multiple sources to overcome attention constraints of actors. This creates demand for summarizing, selecting, discarding and simplifying.

Regular collection and transmission of information focuses attention, conveys importance, and creates demand for use by availability.

Actor behaviour changed through accountability and measurement processes of information system.

 

References:

Cook, K. (1977). Exchange and power in networks of interorganizational relations. Sociological quarterly, 18(1)62-82.

Cook, K. (1982). Network structures from an exchange perspective. In P. Marsden & N. Lin (Eds.) Social structure and network analysis. Beverly Hills, CA: Sage.

Emerson, R.M. (1972a). Exchange Theory, Part I: A psychological basis for social exchange. In J. Berger, M. Zelditch, Jr., & B. Anderson (Eds.), Sociological theories in progress: Vol 2. Boston: Houghton Mifflin.

Emerson, R.M. (1972b). Exchange Theory, Part II: Exchange relations and network structures. In J. Berger, M. Zelditch, Jr., & B. Anderson (Eds.), Sociological theories in progress: Vol 2. Boston: Houghton Mifflin.

Pfeffer, J., Salancik, G. (1978). The external control of organizations: A resource dependency perspective. New York: Harper & Row.

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About mielniczuk

Community, systems, design, collaboration, change, evidence, Intelligent Accountability(c)
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