Toto Wolff conceded Mercedes can have "no complaints" if the team fails to improve and Lewis Hamilton seeks an exit.
The seven-time world champion was unable to compete with Max Verstappen for the title last season and a bid for the crown this year appears unlikely.
Mercedes remain behind Red Bull and Ferrari with their cars for the 2023 season and have also fallen behind Aston Martin, with Hamilton finishing fifth in the opening race in Bahrain last time out.
Hamilton remains tied with Michael Schumacher for the most all-time titles in Formula One and Wolff would not be angry at the Briton for walking away if Mercedes continue to fail to provide him with a car with which he could win an unprecedented eighth championship.
"If Lewis wants to win another championship, he needs to make sure he has the car," he said.
"And if we cannot demonstrate that we are able to give him a car in the next couple of years then he will need to look everywhere.
The beginning of something special...#OTD 10 years ago, Lewis made his first start for the Team in Australia pic.twitter.com/XLK0ayB34u
— Mercedes-AMG PETRONAS F1 Team (@MercedesAMGF1) March 17, 2023
"I don't think he is doing it at this stage, but I will have no complaints if that happens in a year or two."
However, Wolff does not expect Hamilton to jump at an exit and is confident he will sign a new deal, with his current contract expiring at the end of the season.
"I am absolutely confident. We are talking when we want to do it, and how, but we just need to change some terms and the dates basically," he added.
"Lewis is at the stage of his career where we trust each other, we have formed a great bond and we have no reason to doubt each other even though it is a difficult spell.
"It will be so nice when we come out of the valley of tears and return to solid performances."