What is Interdependence?

Definition: Interdependence is a relationship between multiple parties that depend on each other to strive. It means that each party has something the other party need.

What Does Interdependence Mean?

Interdependence is a connection between subjects where one subject’s needs can be fulfilled by the other subject’s resources and these transfer of resources works both ways. That means both subjects need each other to fulfill their needs. These kinds of relationships can be found almost everywhere since, as humans, we need other people’s help to survive and strive. In the business field, organizations depend on each other in many different levels.

Depending on the nature of the relationship, the degree of interdependence can be so high that the disappearance of one party might cause the other party to disappear too. Interdependence can be found in client-supplier relationships when it comes to raw materials. The supplier needs the client to pay for his goods but the client also needs the supplier in order to produce its own goods.

On the other hand, there’s also interdependence between business and financial companies. The latter needs to loan money to be financially profitable and the former needs to borrow money to leverage itself in order to grow.

Example

A business called City Wheels Co. is a bike rental venture that serves the city of Los Angeles. The company leases bikes to individuals for given periods of time and they have locations all around the city to pick-up and deliver the bikes. From the perspective of interdependence we can identify at least two essential interdependent relationships between the business and other parties.

First of all, City Wheels and its clients are interdependent since these individuals need the bikes for transportation and the company also depends on them to earn the revenues they need to remain operational. And second of all, there’s also interdependence with bike mechanics and bike suppliers, since in both cases these suppliers depend on the company to keep their business running and City Wheels depends on them to keep its business well equipped to serve its clients.