Resource Dependence Patterns and Organizational Behavior/Structure in Korean Nonprofit Organizations

• Published date: 01 December 2016
• Date: 01 December 2016
• DOI: http://doi.org/10.1002/nml.21235
• Author: JungWook Seo

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N M  L, vol. 27, no. 2, Winter 2016 © 2016 Wiley Periodicals, Inc.

Published online in Wiley Online Library (wileyonlinelibrary.com) DOI: 10.1002/nml.21235

Journal sponsored by the Jack, Joseph and Morton Mandel School of Applied Social Sciences, Case Western Reserve University.

Resource Dependence Patterns and

Organizational Behavior/Structure in

Korean Nonprofi t Organizations

JungWook Seo

Daegu University

This article examines the relationships among the three dimensions of resource dependence

patterns ( RDPs ) and organizational formalization and goals in nonprofit organizations

( NPOs ). These three RDPs (that is, the appearance of the financial resource inflow) are

resource dependency, resource diversity, and resource competitiveness. The empirical find-

ings suggest that high dependency on government funding (high resource dependency) is

positively associated with organizational formalization, although resource diversity does

not have any explanatory power on organizational behavior and structure, and that a very

competitive environment for resource acquisition significantly affects goal setting in NPOs .

In particular, resource competitiveness well explains goal clarity and goal change in NPOs .

NPOs with high resource competitiveness present clearer organizational goals or missions

and are likely to experience frequent goal change.

Keywords: resource dependence patterns , organizational behavior and structure , non-

profit organizations

NONPROFIT ORGANIZATIONS (NPOs) heavily influence the lives of general citizens and the

affairs of local communities because their role has expanded to include the provision of diverse

social services. Currently, many public administrators and theorists have directed academic

focus on NPOs. The roles, functions, and number of Korean NPOs (KNPOs) have grown

rapidly since the 1990s as a result of Korea ’ s democratization. KNPOs have become important

sociopolitical actors in civil society. They have significantly consolidated Korea ’ s democratiza-

tion at both national and local community levels, while also expanding the delivery of social

services.

Today, the emphasis on economic value and marketization may promote competition among

NPOs (Eikenberry and Kluver 2004 ), and the limited economic situation causes funders to

be more conservative. In addition, NPOs may change their goals and structures to attract

funding from potential public and private donors (Macedo and Pinho 2006 ). The organiza-

tional behavior and structure of NPOs cannot be described entirely by internal efficiency and

Correspondence to: JungWook Seo, Deagu University, Room 1120, Jonghapyeongu-dong, 201 Daegudaero, Jilyang,

Gyeongsan, Gyeongbuk, 38453 Korea (the Republic of). Email: gomsense@gmail.com.

Note:  is research was supported by the Daegu University Research Grant, 2016.

Nonprofi t Management & Leadership DOI: 10.1002/nml

220 SEO

effectiveness in modern organizations. Organizational behavior is not always related to the

consideration of efficiency or profit (Pfeffer 1987 ), and both internal and external actors who

are closely associated with critical resources considerably affect organizational behavior and

structure (Pfeffer and Salancik 2003 ). This study focused on the dynamics among external

resource providers, organizational goals, and formalization in NPOs.

The ability to acquire financial resources is crucial for the success and survival of NPOs.

They try to gain revenue through a variety of methods, such as private donations, govern-

ment grants and contracts, and their own commercial activities. NPOs are generally less

dependent on external resource providers when they have the ability to generate their own

revenues by commercial activities (Hodge and Piccolo 2005 ). However, nonprofits’ depen-

dency on external funding sources is high—in fact, Salamon and colleagues ( 2013 ) indi-

cate that NPOs on average derive approximately 67 percent of their revenue from external

resource providers. The existing literature has noted that the revenue structure of NPOs is an

important tool with which to understand their behavior and structure (Anheier, Toepler, and

Sokolowski 1997 ). In particular, the recent emphasis on economic value and the increased

leverage of public and private funders in nonprofit management may influence the organiza-

tional structure and goal setting in NPOs.

This article examines the impacts of the appearance of the financial resource inflow—resource

dependence patterns (RDPs)—on organizational behavior and structures in KNPOs. First, the

RDPs are conceptualized to understand NPOs’ revenue structure. There are three dimensions

of RDPs: (1) resource dependency (Lan 1991 ), (2) resource diversity (Froelich 1999 ; Pfeffer

and Salancik 2003 ), and (3) resource competitiveness. Second, the formalization and organiza-

tional goals (goal clarity and goal changes) related to RDPs in NPOs are explored. Pfeffer and

Salancik ( 2003 , 258) have argued that an organization ’ s efforts for “ensuring the continuation

of needed resources is the focus of much organizational action.” Organizations obtain criti-

cal resources through exchanges with the environment. Such resource dependence shapes the

activities and structure of formal organizations (Pfeffer and Salancik 2003 ). Froelich ( 1999 ,

248) suggested that NPOs must appropriately respond to the requests of key resource provid-

ers for stable resource acquisition. It is therefore assumed that various types of resource acqui-

sition significantly influence organizational goals and formalization in NPOs.

In the following section, I provide a brief overview of KNPOs and the concept of RDPs.

Next I present hypotheses for the relations between RDPs and formalization and organiza-

tional goals. I then describe the measures of the variables, data collection, statistical approach,

and the empirical results. Finally, I discuss the theoretical and practical implications of the

study results.

Literature Review and Hypotheses

There are some slight variations to the definition and classification of nonprofit organizations

among many countries because each country has different social, political, and economic situ-

ations. I define the concept of KNPOs, conceptualize RDPs and present the five hypotheses.

Defi ning and Classifying Korean Nonprofi t Organizations

It is not easy to define the concept of NPOs exactly, because various types exist in Korea. In

fact, several terms are used to refer to the organizations in Korea that are nonprofits. In general,