Question

Chief Sulemana, is the chairperson of the regional house of chiefs in the HWESOKO traditional area. He is also a board member of EBIAMO COMPANY LIMITED located in HWESOKO. Supporting your work with relevant examples, explain the contribution of sociological and resource dependency theories within the context of corporate governance in chief Sulemana’s appointment as a board member.          

Answer 1

The sociological dependency theory- This theory of corporate governance mainly focus on structure and composition of the board of director among the corporate sector and provides with implication of power and wealth distribution in the society, the issue with the multiple directorship in many organisation which results in the power concentrated in few privilaged members of the society which forms as a business groups and serves as a challenges towards equality and economic progress in the society

The Resources dependency theory- This theory focus on the role of board of director in providing them with access to resources needed by the firm. It provides that the directors serves as an important role in the organisation by providing the organization with the essential required resources.The directors provides the firms with various resources like information, skills, access to suppliers, buyers, social group etc. For example-

• Reducing profits may leads to expanded business activity through strategic alliance and diversification with other available companies.
• Research with the help of research dependency theory has observed organizational adaptation to dependencies.
• Organization also adapts by attempting to alter their environment.