The Attributes of a Good Resource
Introductory Summary
Resources in business can be termed as the factors that enable a business venture to perform its business activities. These resources include human, physical, and financial and knowledge factors that are required to accomplish any business activity.
A good business resource
A good business resource should have certain attributes that qualify it as a good resource. These qualities include the state of ownership of the resource as well as its flexibility in adjustment according to production. Thus a good resource should be one that is fully owned by the business in venture. It should also be flexibly adjustable to changes in production levels without causing the business to incur any operational costs that are not directed towards production (‘Marketing’, 2009).
The Artemis Sports Wear Company scenario in relation to resource goodness attributes
The Artemis Company desires to cut costs in order to remain profitable in a competitive market. The options available may include, down sizing, cutting back on unnecessary expenses, increasing sales and ensuring all used resources are not hired but owned by the company in order to reduce operating costs. Downsizing: involves reducing wages and salaries because they contribute to operating costs. Though it portrays a negative image on employees it can make profit margins higher by eliminating unwanted employees and/or reducing the working hours (Lee & Epstein, 2003).Cutting down unnecessary expenses: Through careful examination an entrepreneur can determine non-value adding expenses like luxury company vehicles or holidays to improve on the profit margin (‘Strategy’, 2010). Increasing sales: This increases incoming money and can greatly improve the profit margin. Alternatively, the company should consider ensuring that all resources it uses are owned by the company. Additionally, it should ensure it does its entire works without any outsourcing (‘Strategy’, 2010).
The resultant effect of some of these adjustments may have a negative effect on the morale of employees. The use of down sizing and cutting down unnecessary expenses may not go well with some employees because it affects their welfare. As an example, if employees are down sized by laying-off; the remaining employees may have a low morale because the future of their employment may look unstable. This in turn could negatively impact production.Therefore, it can be agreed upon that, a look at the whole scenario shows that the most important attributes of a resource include: its ownership, flexibility in adjusting production that allows slight or no increase in cost and its limited response to cost rise when production rises. In the final project of attempting to improve the profit margin of Artemis Company three resources can be chosen for adjustment. These resources include labor, finances and machinery.
How the chosen resources meet the criteria of a good resource
Labor meets the criteria of a good resource because it is easily adjustable. Businesses can easily down size without affecting a company’s production. Another option that can be used in labor adjustments includes relocation to areas with a cheaper labor market (‘Strategy’, 2010). Finances too can be a good resource because it can be easily adjustable in a company. The adjustment structure of finances to better profit margins may include increasing strength of relationship with existing investors, strengthening reputation of the management and listing at a stock exchange. All these can attract more finances to put into the business in expansion of production. Machinery is also a good resource that can be chosen in the effort of trying to make adjustments that will improve the profit margin. Examples of restructuring possible on machinery include ensuring that all machinery is company owned and not hired. On the other hand machine working hours can be restructured to avoid idling use or run that uses energy. This will ensure machines are in use only when necessary (‘Strategy’, 2010).
References
“Strategy”. (2010). Strategy: Resources of a business. Retrieved from, http://tutor2u.net/business/strategy/resources.htm. Accessed on 6th May 2010.
“Marketing and Sales information”. (2009). Tips for Making Your Operation profits Higher. Retrieved from, http://www.businessknowledgesource.com. Accessed on 6th May 2010.
Lee, Y. J. and Epstein, J. M. (2003). Advances in Management Accounting, Volume 11. Bingley, UK: emerald Group Publishers.
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