The resource dependence theory takes centre stage in Clayton Christensen's Innovator's Dilemma. According to Christensen, groups such as customers and investors, on whom firms rely to provide resources, wield enormous power in dictating what products and markets firms pursue.
Do you agree?
Strategy, imbedded in human decision makers, is far more important. Two businesses can have the same (physical) resources while the one is successful and the other not. Resources are basic requirements, but strategy and implementation are the real deciding factors. If you include knowledge as a resource (human resource), then I think you could say that a company or organization is resource dependence.
Rudi Darson
If I understand you correctly, you are saying that "human decision makers" (managers) make choices in terms of which products and markets to pursue?
Dear Kheepe Moremi , it is indeed the human factor that is critical, or more so the human capacity. Capacity can be seen as the function of knowledge (information, experience, skills, algorithm), culture (value, attitude, believe) and social institution (rules, laws, regulations), the enabling environment.
It can be presented in this equation: C=f(IESA)*(VAB)*(SI), see Article Capacities, Development and Responsible Innovation
Technology (a resource) is considered one of the drivers of development and innovation, but without human intervention we are nowhere. Even with the hailed ML (Machine Learning), AI (Artificial Intelligence), AR (Augmented Reality), robotics, it is the human factor, the human capacity, that is the critical factor. They must have the capacity to make the right decisions.
Rudi Darson
Thank you for sharing the article. Well researched and well written. I understand and appreciate the significance of capacity. In this instance however and capacity is not an issue.
To paraphrase, we are talking about "good companies - the kinds that many managers have admired and tried to emulate, the companies known for their abilities to innovate and execute." Christensen, 1997.
To get back to the question, do investors and customers dictate to firms in terms of which "products and markets" they pursue?
Can we confidently conclude that firms that stumble in the face of "disruptive innovations" do so because of resource dependence? In other words, these firms listened to and responded to the needs of the current customers who give them sales and investors who provide them with capital? The net result being that they focused on "sustaining innovations."
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