Resource Dependence Dynamics: Partner Reactions to Mergers

Forthcoming in Organization Science.

40 Pages Posted: 2 Feb 2014

Date Written: December 1, 2013

Abstract

Research on resource dependence typically takes a static view in which actions and outcomes are determined structurally, but not as responses to the actions of the counterparty in an exchange relation. By contrast, this study addresses a question of power dynamics by examining whether mergers of organizations trigger responses from their common exchange partners. We predict that common exchange partners respond by withdrawing from the relationship and that their responses vary with the availability of alternatives, the value of the relationship, and the relationship history. Using data on advertising agencies, we show that mergers of agencies do trigger reactions from their common clients, and the reactions differ with agency and client characteristics. Extending existing theory and evidence, our results suggest that firms respond to the dynamics of exchange relationships and not only to their structure.

Keywords: resource dependence, power dependence, inter-organizational relationships, mergers and acquisitions, coalitions, status, exchange dynamics, relationship dissolution

Suggested Citation

Rogan, Michelle and Greve, Henrich R., Resource Dependence Dynamics: Partner Reactions to Mergers (December 1, 2013). Forthcoming in Organization Science. , Available at SSRN: https://ssrn.com/abstract=2388905

Michelle Rogan (Contact Author)

Imperial College Business School ( email )

South Kensington Campus
Exhibition Road
London SW7 2AZ, SW7 2AZ
United Kingdom

HOME PAGE: http://www.imperial.ac.uk/people/m.rogan

Henrich R. Greve

INSEAD ( email )

F-77305 Fontainebleau Cedex
France

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