Beyond Dyadic Exchange: Functional Interdependence and Sub-unit Power

This study critically examines the relevance of exchange theory in explaining the power of organizational sub-units. The study argues that sub-unit power is generated not by the balance of exchange dependencies between sub-units, but by workflow interdependencies created by the organization’s division of labour. The findings support the arguments of the study. The paper concludes that dyadic power relationships between organizational sub-units can only be fully understood in terms of their location in organization-wide systems of functional interdependence.