In many ecological scenarios, the success of an individual plant is defined by the behavioural decisions that it makes when confronted with the risks of competition with other plants, and biomass losses to insect herbivores. These decisions involve expression of shade avoidance responses and induced chemical defences. Because these responses are costly, they frequently engender resource allocation dilemmas. In this review, I discuss the mechanisms that trigger adaptive responses to competitors and herbivores, highlighting the role of phytochromes as central organizers of the overall resource allocation strategy of plants. Phytochromes sense the reduction in the red to far-red (R : FR) ratio of sunlight caused by the proximity of other plants. Shade-intolerant plants respond to low R : FR ratios with shade avoidance behaviours and reduced investment in defence. Pfr depletion leads to increased stability of growth-promoting phytochrome-interacting factors (PIFs), and results in the production of auxins and gibberellins, degradation of DELLA proteins, which are repressors of PIFs, and reduced sensitivity to jasmonates. Thus, phytochrome appears to fulfil its organizational role by regulating the relative strength of the signalling circuits controlled by growth-related and defence-related hormones. I point out cases of signalling redundancy and discuss the significance of recent work on hormone signalling for our understanding of the mechanisms that control adaptive plant behaviour.