What does resource dependence theory suggest regarding organizational decisions?

Resource dependence theory posits that organizations are not self-sufficient and must engage with their external environment to access the resources they need to survive and thrive. This theory emphasizes that organizations are influenced by external agents—such as suppliers, customers, regulatory bodies, and competitors—who hold critical resources that the organization requires. Therefore, decisions made within an organization are shaped not only by its internal policies and capabilities but also by the constraints and opportunities presented by its external environment.

This perspective highlights the interdependencies that organizations have with outside entities, underscoring how these relationships can dictate strategic decisions, resource allocation, and overall organizational behavior. Organizations must navigate and manage these external relationships to ensure they have the necessary resources for their operations, which can include negotiating for better terms with suppliers or responding to regulatory requirements.

In contrast, focusing solely on internal policies or financial metrics overlooks the vital role of external influences and can lead to a narrow understanding of how organizations operate in a complex, interdependent environment. Additionally, while competitor actions are important, they are just one aspect of the broader network of resource dependencies identified in this theory.