Resource Dependency Theory

The video discusses resource dependency theory, which focuses on how organizations manage external resources to maintain competitiveness. It contrasts with the resource-based view, which emphasizes internal resources. Key premises include the need to secure external resources, the power dynamics involved, and the interdependence between organizations. Situational factors, such as the COVID pandemic, can affect resource demands and supply. Managers must understand and manage these dependencies to ensure organizational survival and profitability.

How does resource dependency theory explain the relationship between organizations and their external environment?

What are the key premises associated with resource dependency theory?

In what ways do organizations respond to demands for resources in their external environment?

Explain the concept of mutual power in the context of resource dependency theory.

Why is it important for managers to understand their dependence on external resources?