Types of Business Resources - Essay Example

Business resources Contents Contents 1 Introduction 2 Discussion 2 Conclusion 5 References 6 Introduction The resources of a business are the total means that are available to the business for making production and profits. Business resources can also be defined as the productive or economic factors that are required for the accomplishment of a business activity or the economic or productive means through which the desired outcomes of an enterprise can be achieved. The common business resources are land, labour, energy, capital, expertise, management, time etc. However, the business resources can be segregated into four broad types of resources. These are tangible resources including physical resources, financial resources, human resources and intangible resources like goodwill, patents etc. Discussion The mere presence of resources in a business is not sufficient to ensure that the business is successful. The resources of a business should be employed in an intelligent and strategic manner to ensure its success. The human resources of a business include the personnel and employees working in the company. The human resources also include the management expertise and skills resources. The human resources are considered to be the most critical resources of a business in the modern business world. The effectiveness of the human resources of a business can be gauged with the help of the skill base achieved in the business. The skills possessed in a business and the ability of using the skills to meet the changing dynamics and requirements of the business are important factors that should be considered for evaluating the human resources of the business. The audit of the human resources should be conducted periodically to ensure that the assessment of the human resources available to the business is done fairly and to find out the emerging needs of the business regarding human resource management. Some relevant factors that can be used to audit the human resources are the identification of resources of staffing like the number of employees by function, the remuneration, qualification, location, experience and grades of the employees. The assessment of key intangibles like business culture and morale are other factors which can be used to represent the effectiveness of human resources present in a business. The physical resources of a business include a number of operational resources that can be used for the delivery of specific strategies using physical capabilities. The physical resources of a business may be of many types and can vary according to the nature and scale of the business. The production facilities like capacity, production processes, maintenance and investment requirements, quality and organization are important factors which decide the effectiveness of physical resources in an organization (Abels and Klein, 2008). Marketing facilities like the distribution channels and networks and marketing management processes are other main physical resources. The information technology systems are commonly used in modern businesses as important physical resources. Information technology infrastructures and integration of information technology systems with suppliers and customers are useful physical resources in a business. The financial resources of a business include the ability of the business to be able to fund its chosen strategies. The presence of financial resources is essential to ensure that the business is financially equipped to apply chosen business strategies. For example, a corporate or business strategy that require investment in production capacity, new product development, distribution channels or working capital would need sufficient financial resources in order to be implemented practically within the business. Finance funds like cash balance, bank overdraft, working capital like stocks and debtors, shareholders’ capital, bank loan, other debts and creditors like government and suppliers are key financial resources for a business. Also, the ability of a business to raise new funds from internal and external sources of financing is considered to be another important representation of the financial resources of a business. These include the position of a business in the stock exchange, relation of the business with investors and reputation of the business and the management. The intangible resources are those resources which cannot be measured in tangible or physical terms but which have far reaching effects on the success and profitability of a business. The intangible resources of a business have started assuming a more critical role in the recent years. The intangible resources of a business can be goodwill, brands, reputation and intellectual properties like patents, copyrights, trademarks etc. Goodwill is an important intangible resource which represents the difference between the actual perceived value of a business and the value of tangible assets in a business. The reputation of a business includes the positive image and position of the business in the market. For example, if a business has an impressive track record of delivering the strategic objectives and if it can gather adequate support from the suppliers and employees of the business, this would indicate that the business has good reputational resources. The presence of a strongly established brand may act as a key intangible resource that contributes positively to the growth and success of a company. Intellectual property is another significant intangible business resource. These include the commercial rights that are to be protected by trademarks and patents and contribute significantly to the success of a company. The management of resources is as important as the maintenance of resources within a business. It is difficult to identify one single type for source as most important for a company. All the types of resources have significant roles to play in the success and continuity of operations of a business. The proper managements and employment of business resources would ensure that the business can use its resources in the optimal manner and extract the maximum benefits from the prevailing resources and capabilities in the company. Conclusion It is important to use both the tangible and intangible resources and capabilities of a company to ensure the long term success and sustainability of the company. It is also essential to evaluate and review the resource usage in a business to ensure that the resources are being employed in a value adding and beneficial manner. Thus resource management forms an important part of a business. The optimum allocation of tangible and intangible recourses can be identified to be an important strategy for ensuring the continued success and improved efficiency of a company. References Abels, E. G. & Klein, D. P. 2008. Business information: Needs and strategies. Cambridge: Emerald Group Publishing. Read More