Resource dependence theory is an important theory, which has been utilized to explain the board influence on nonprofit organization. According to Pfeffer and Salancik (1978), resource dependence theory considers an organization “as an open system which is dependent upon external organizations and environment contingencies” (Deng & Nguyen, 2014). Within the framework of resource dependence theory, the roles of the board are generally assumed as an arbitrator, who establishes relationships between an organization and external environment, to reduce various types of uncertainty and transactional costs “associated with environmental interdependency by linking the organization with its external environment” (Deng & Nguyen 2014, p. #).
From resource dependence theory perspective, one of the primary roles of the board is to provide resources to the organization, and the resources are not exclusively related financial assets, but it includes operational advices and counsel as well (Hillman, Cannella & Paetzold, 2000; Cumberland, Kerrick, D’Mello & Petrosko, 2015). Long term plans and strategies are not easily created and established in the …show more content…
Since the environmental uncertainty exists around nonprofit organizations, the board needs to prepare for organizational changes. And Hillman, Withers and Collins (2009) suggested board chair succession as one of the changes, which board can take to minimize disadvantages caused by uncertainty. Then, where does uncertainty come from? According to resource dependence theory perspective, uncertainty grows bigger when organization relies more upon external environment, so if the organization does not response well to environmental contingencies, the organization cannot survive for so long. The alignment with the environment and adaptations are other important roles of the board to reduce
From resource dependence theory perspective, one of the primary roles of the board is to provide resources to the organization, and the resources are not exclusively related financial assets, but it includes operational advices and counsel as well (Hillman, Cannella & Paetzold, 2000; Cumberland, Kerrick, D’Mello & Petrosko, 2015). Long term plans and strategies are not easily created and established in the …show more content…
Since the environmental uncertainty exists around nonprofit organizations, the board needs to prepare for organizational changes. And Hillman, Withers and Collins (2009) suggested board chair succession as one of the changes, which board can take to minimize disadvantages caused by uncertainty. Then, where does uncertainty come from? According to resource dependence theory perspective, uncertainty grows bigger when organization relies more upon external environment, so if the organization does not response well to environmental contingencies, the organization cannot survive for so long. The alignment with the environment and adaptations are other important roles of the board to reduce