Hidden Power in Formalized Structures
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Choi, Jeongwon
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Abstract
My dissertation examines resource allocation across organizations as a policy outcome. I argue that the hidden power of organizations behind the formalized institutional setting predicts the resource allocation outcomes. The power I look at is generated from inter-organization resource dependency (power-dependency), as described by Resource Dependence Theory (RDT). In my dissertation, I demonstrate how the power-dependency is institutionalized and operates in a formalized institutional structure, affecting the resource allocation outcomes beyond the formal rules of a policy.
I use the case of the US federal system of Facilities & Administrative (F&A) cost reimbursement to universities. The system has governed the resource exchange of federal funding for the university’s production of science since the 1940s. The F&A cost reimbursement is exchanged for the overhead costs used for the university’s federally sponsored research. The rules and processes of the reimbursement are highly formalized. The federal government spends more than $10 billion for indirect cost reimbursements, with huge variation in reimbursement rates across research universities, ranging from 40 percent to 70 percent, where 1 percent can equal millions of dollars. This variation has ignited longstanding debates about why some organizations appear to fare much better than others in this highly formalized institutional setting. My dissertation asks where this variation comes from.
I begin by developing the history of the F&A system and show how inter-organization power structures have created, sustained, and modified the system in a way that allows the workings of power (Ch. 2). I then find that inter-organization power asymmetry and mutual dependence from resource interdependency predict variation in F&A cost reimbursement rates across universities, leading to unequal resource allocation outcomes (Ch. 3). I also find indirect power of universities over agencies through Congress moderates power asymmetry between universities and agencies, and hence also affects the inequality in F&A rates (Ch. 4).
My research depicts a holistic view of power-dependency affecting organizations’ access to resources by showing the workings of power at different levels (bilateral, triangular, and institutional settings). The dissertation contributes to the movement in organization and management studies to revitalize RDT. The research expands the scope of RDT to a formalized setting where there should be less discretion in resource allocation and specifies conditions for the workings of power, thereby enhancing RDT’s generalizability. I also develop RDT by modeling indirect power based on formal authority relations and integrating it with the direct exchange power structure. I discuss agency-contingent differences in the workings of direct and indirect power in a formalized setting, highlighting the government as an exchange partner that responds to power-dependency. I examine structural characteristics of power-dependency, making explicit the power effects hidden in a formalized setting.
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Date
2024-05-14
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Dissertation