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Resource Dependence Dynamics: Partner Reactions to Mergers

Author

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  • Michelle Rogan

    (INSEAD, 77305 Fontainebleau Cedex, France)

  • Henrich R. Greve

    (INSEAD, Singapore 138676)

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.

Suggested Citation

  • Michelle Rogan & Henrich R. Greve, 2015. "Resource Dependence Dynamics: Partner Reactions to Mergers," Organization Science, INFORMS, vol. 26(1), pages 239-255, February.
    • Handle: RePEc:inm:ororsc:v:26:y:2015:i:1:p:239-255
    DOI: 10.1287/orsc.2014.0897
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    References listed on IDEAS

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    Cited by:

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    2. Sun Hyun Park & Kelly Patterson, 2021. "Being Counted and Remaining Accountable: Maintenance of Quarterly Earnings Guidance by U.S. Public Companies," Organization Science, INFORMS, vol. 32(3), pages 544-567, May.
    3. Xuanjin Chen, 2019. "Antecedents of Technological Diversification: A Resource Dependence Logic," JOItmC, MDPI, vol. 5(4), pages 1-18, October.
    4. Manuela N. Hoehn-Weiss & Samina Karim & Chi-Hyon Lee, 2017. "Examining Alliance Portfolios Beyond the Dyads: The Relevance of Redundancy and Nonuniformity Across and Between Partners," Organization Science, INFORMS, vol. 28(1), pages 56-73, February.
    5. Hong Zhu & Qi Zhu, 2016. "Mergers and acquisitions by Chinese firms: A review and comparison with other mergers and acquisitions research in the leading journals," Asia Pacific Journal of Management, Springer, vol. 33(4), pages 1107-1149, December.
    6. Dovev Lavie & Randi Lunnan & Binh Minh T. Truong, 2022. "How does a partner's acquisition affect the value of the firm's alliance with that partner?," Strategic Management Journal, Wiley Blackwell, vol. 43(9), pages 1897-1926, September.
    7. Shi, Wei & King, David R. & Connelly, Brian L., 2021. "Closing the deal: Managerial response to short sellers following M&A announcement," Journal of Business Research, Elsevier, vol. 130(C), pages 188-199.

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