Blackwell Reference Online

Extract

Resource dependence theory marked a watershed by positioning power at the core of organizational theory ( Pfeffer and Salancik, 1978 ). The theory establishes two characteristics of actors' structural power: relative power – the difference in the power of each actor over the other; and mutual dependence – actors' total dependence on actors in the dyad. These two characteristics are then related to two outcomes: (1) differences between actors' profits and (2) power balancing operations that aim to change the underlying structure of dependence. The main hypothesis relating actors' structural power to material inequality between actors suggests that an increase in an actor's power will lead to higher profit for that actor. Burt (1982) provided support for this hypothesis by showing that firms in industries subject to significant constraint from firms in other industries will suffer lower rates of profit. Subsequent tests relating advancement of workers in a professional organization to their constraint yielded similar results ( Burt, 1992 ). Recent developments in this stream of research suggest that mutual dependence may affect the relationship between relative power and profit, such that an increase in actor's power under conditions of high mutual dependence may actually reduce that actor's profit ( Piskorski and Casciaro, 2003 ). Most research relating actors' structural power ... log in or subscribe to read full text