Resource Dependence Dynamics: Partner Reactions to Mergers

Michelle Rogan () and Henrich R. Greve ()
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Michelle Rogan: INSEAD, 77305 Fontainebleau Cedex, France
Henrich R. Greve: INSEAD, Singapore 138676

Organization Science, 2015, vol. 26, issue 1, 239-255

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; interorganizational relationships; mergers and acquisitions; coalitions; status; exchange dynamics; relationship dissolution (search for similar items in EconPapers)
Date: 2015
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Citations: View citations in EconPapers (9)

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Persistent link: https://EconPapers.repec.org/RePEc:inm:ororsc:v:26:y:2015:i:1:p:239-255

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