The Resource Dependency Theory Of Wal Mart Stores, Inc.

Decent Essays

For this assignment, the writer commences by exploring “Resource Dependency Theory” as the understanding of this hypothesis is vital. Next, an overview will be undertaken in terms of the selected organisation -that is, Wal-Mart Stores, Inc. After, the paper will present a brief description of the relationship between Walmart and its suppliers. It then goes on to highlight the managerial bridging strategies that the company uses in dealing with the organisations it depends on for resources. These strategies are: negotiation, contracts, interlocking directorates, joint ventures, strategic alliances, and mergers and acquisitions.
About Resource Dependency Theory
Hillman (2009) indicated that “Resource Dependence Theory” refers to a business entity as an open mechanism that is reliant on contingencies in the external environment (p.2). That is, the theory views a business in relation to its resource dependences with other businesses in the environment (Salazar, 2012). Pfeffer and Salancik (as cited in Sheppard, 1995, p.28), stated that the essence of a company’s survival concerns its ability to get and maintain resources. The hypothesis helps explain why businesses should enter into exchanges with related parties and the manner in which the entity can maintain its survival. Pfeffer and Salancik (as cited in Sheppard, 1995, p. 28 - 29) conveyed that this survival occurs via demand management, namely the demands of interest associates upon which the entities rely on for resources

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