Professor of Entrepreneurship
resource dependence; Power Dependence; Interorganizational Relationships; Mergers and Acquisitions; Coalitions; Status; Exchange Dynamics; Relationship Dissolution; Corporate Governance; Value Creation, Strategy and Implementation;
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.The authors 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, the authors 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, these results suggest that firms respond to the dynamics of exchange relationships and not only to their structure.