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Resource Dependency Theory

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The financial resource in public Universities (mostly in terms expenditure per student) from principal benefactors (governments) has been realized declining across African countries, where Kenya is among this countries and is not left behind in resource scarcity, (Johnstone, 1998; World Bank, 2010). However in order to understand how public universities in Kenya as organizations obtain their revenue for their survival, many theories that explain organizational responses to resource challenges are of important and of great necessity and been found appropriate to be used. Therefore Resource dependence theory (RDT) has been useful in providing useful conceptual tools for understanding organizational responses to financial performance, or financial …show more content…
The environment is been understood in terms of which other organizations have their interest to attract one another in acquiring resources, (Levine and White, 1961; Thompson, 1967). For an organization to survive, it must engage in an exchange with its environment. Pfeffer and Salancik (1978) indicate that organizations depend on environment for acquiring vital resources for their survival. Where the most popularly known organization environment include a variety of actors or stakeholders or resource providers that have various demands and expectations (see Freeman, 1984). Therefore these stakeholders have strong effects on the activities or outcomes of the resource of the recipient organization. The environment, on the other side along with resources, comprises of rules and regulations, opportunities, competitors, and threats. These environmental aspects can enable for and erect barriers to the ability of the focal organization to obtain its income. The resource recipient organization will have to identify key stakeholders; and thus manage stakeholder relationships to ensure survival in that environment where competition is stiff especially with private universities. Therefore this theory states that we cannot understand organizational structure or behavior unless we first understood the context within which it operates (Aldrich, 1979; Pfeffer and Salancik, 1978; Scott, …show more content…
This is because the university leaders positively see revenue generation as a means to gain more flexibility in their internal financial management, as public funding (also some donor’s funding) often comes with complex administrative rules and regulation which need to be adhered to. This is to say all income generated internally other than governmental sources this income is perceived as being comparatively easier to manage and has the advantage that it can be allocated internally without restrictions (Wangenge-Ouma,

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