Resource Mobilization

-Meaning of resource

-Major resources: Financial, Physical, Human and Informational

-Financial Resources: Equity and Debt capital, Fixed and working

capital, venture capital and Mutual fund

-Physical Resources: Land and Building, Machinery and Parts,

Furniture and Fixture

-Human Resources: Recruitment, Selection and Retention

-Informational Resources: Intranet, Extranet and internet

INTRODUCTION TO RESOURCES

Resources may be defined as the sum of asset that an organization uses to

perform the activities effectively. In other words resources are the inputs

essential to accomplish the pre-determined objectives and to operate

business activities. They are tangible and intangible. Capital, land , building,

furniture, knowledge and reputation.

Resources serve as the input in the production process. Resource availability

and allocation are very important for a business. They provide strength and

enable exploitation of opportunities. In this way, resources help to carry out

business activities and achieve long-term objectives. It is concluded that

resources are the input into firms work process. . Financial resources ,

Physical resources, Human resources, Informational resources

MAJOR RESOURCES

A. Financial resources

B. Physical resources,

C. Human resources,

D. Informational resources

A. Financial resources

Financial resource is one of the most important resources of the company

Cash, equity capital, debt capital, fixed capital, working capital, venture

capital, mutual fund, and credit lines are major financial resources. An

entrepreneur needs to secure adequate financial resources to establish,

operate, promote, and growth of the company. Financial resource is

regarded as a life blood of a company. There should be excellent balance

between company, financial Institutions, creditors, debtors, and cash. Well

accepted accounting system and auditing is essential . It include availability

of sources of finance, capital structure, ability to use alternative financial

planning, and relationship with the financial institutions. There are different

sources of financial resources. They are;

1. Equity Capital

Equity capital is obtaining funds for the business in exchange of ownership/

share. It is the most common source of funding for a business. The equity

investors get return on their investment in the form of dividend and by

selling their stock or shares. This is different from borrowing money in the

sense that the company doesn’t have to pay it back. There are three main

source of equity capital:

a. Angel investors: Invest their capital at the time of start up business.

b. Venture capital: Invest their capital after establishment of business.

c. Initial public offering: Purchase the share at the time of issue.

2. Debt Capital

Debt financing/capital is another important source of generating funds for a business. It is

obtaining borrowed funds for the business. It involves getting loans or issuing debenture or bond.

For a new venture, issuing debenture or bond is not possible. The company will be liable to pay

interest and principal amount with in specified period of time.

3. Fixed Capital

It refers to the capital investment made in the long term assets of the company. It is required

before the business starts. It serves the business for very long period of time. It has long-term

orientation. It is also called long term financing. It is used to purchase land building, furniture

vehicles etc.

4. Working Capital

It is the capital which is required for regular operation of a business. Hence, it supports the

business directly. It is the investment in the current assets such as inventories, debtors, cash, bank

balance etc. every business should manage the adequate amount of working capital to perform

the day to day activity effectively and efficiently.

5. Mutual Fund

A mutual fund is a company that pools/gathers money from many investors

and invests the money in securities such as stocks, bonds, and short-term

debt. The combined holdings of the mutual fund are known as its portfolio.

Investors buy shares in mutual funds means they invest. Each share

represents an investor’s ownership part in the fund and the income it

generates.

6. Venture capital

Venture capital is money that is invested by venture capital firms in start-ups

and small businesses with a high growth potential. It is different to angel

investors as the venture capitalists invest after the business is in operation

whereas angels invest in start-ups.

B. Physical resources

Physical resource is the resource that is made by person through their

knowledge, experience, skills, and abilities. The land and building

machinery and parts, equipment, furniture and fixtures, computer,

robot technology, and many more products that are made by person

are the examples of physical resources. Production process cannot be

imagined without physical resources. Low priced having higher quality

resources lead organizational productivity. It includes the following

components;

1. Land and Building

Land and building are the immovable fixed assets of a company. A company can purchase land or acquire it by

lease provision. A building can also be purchased, leased, rented or constructed. Purchasing of land sometimes

becomes costly. Therefore, a wise manager thinks to leasehold the land as an alternative to purchase. Careful

selection of site, design and layout of the buildings are very basic to the success of a business. The size of a

building is determined by the nature and volume of business activities. For example, a showroom needs to be

located in the urban area whereas a manufacturing unit can be placed in the semi-urban or rural areas. Existing or

developing infrastructure plays a determinant role in the selection of land and building.

2. Machinery and Parts

Machines and parts play an important role in the successful operation of business activities. Machines are used for

the manufacturing process of goods and services. Parts are the necessary accessories to repair and maintain the

machines. Machinery increases the efficiency of the business by maintaining the accuracy of work, improving the

working procedures and eliminating work irregularities. Machines replace the manual labour and ensure cost

effective production of goods and services. The machine produces goods within a short period of time in

comparison to human labour. The use of different kinds of machines is determined by the nature and volume of

the business.

3. Furniture and Fixtures

Furniture is made of wood, metal or plastic. In simple terms, chairs,

tables, racks, almaries, filing cabinets, etc. are the examples of

furniture. Modern furniture increases the work efficiency of employees

and the offices. Furniture attracts visitors and helps to increase the

goodwill of the office and business organization. Furniture needs to be

attractive, luxurious, durable, and cost effective. Comfortable furniture

makes employees happy and increases their work efficiency.

C. Human Resources

Human resources include the knowledge, skill, experience and commitment

of the human factor of an organization. They are the most important

organizational resources in knowledge based economy. There must be a

good harmony between the business and human resource planning to

maximize the effectiveness of human factors. It is the great resource to

convert input into output. The following are the major functions of human

resource management.

1. Recruitment

Recruitment is the process of attracting a pool of qualified employees with

required skills, knowledge and abilities with the job requirements. It is based

on job analysis and manpower planning.

2. Selection

Selection is the process of choosing or selecting the right candidate required for a

job position in an organization. It involves measuring the skills and qualities of the

candidates through tests and interviews.

3. Training and Development

It involves enhancing employee knowledge, skills and abilities through learning.

Training and development prepare employees for their responsibilities and careers.

4. Compensation

Compensation is the financial benefits offered to the employees for their efforts to

the organization. It takes the forms of salary, wages, allowance, and other benefits.

It is a major motivational factor for human resources.

5. Retention

Retention is related to keeping the employees in the organization for a

longer period of time. It is an attempt of the business to minimize employee

turnover. Employees may be retained in the organization for a longer time by

providing financial and career opportunities as well as creating a good work

environment.

6. Labour Relation

Labour relation is related to enhancing a good relationship among the

management, employees and the government. It is required for a better

work environment as well as enhanced organizational productivity.

D. Informational Resources

Information is powerful since it helps to take effective decisions in an organization.

Information resources are the data and information used by an Organization. It

includes knowledge about customer, suppliers, government policies, competitors

and stakeholders etc. knowledge about different aspect of the organization

support management to make practical and rational decision.

Means/Types of Informational Resources

1. Intranet

An intranet is a private computer network that uses internet protocol technologies

to share information within the organization securely. It consists of many

interlinked local area networks (LAN) and uses any Wide Area Network (WAN)

technology for network connectivity.

2. Extranet

An extranet is a part of an organization's intranet that is extended to users outside

the company such as suppliers, vendors, partners, customers, or other business

associates, usually via the internet. It is required for day-to day business activities.

3. Internet

The internet is a global system of interconnected computer networks that uses the

standard internet protocol suite (TCP/IP) to exchange information among billions

of users worldwide .

E. Intellectual Resources

Intellectual resources are intangible but have value in the marketplace. They are the

product of human imagination, creativity, and inventiveness. The physical resources

such as land, buildings, and equipment may not be enough to take advantage of the

marketplace. Intellectual resources are the real source of advantage for the

businesses.

Types of Intellectual Resources

1. Copyright:

Copyright is the rights that creators have over their literary and artistic works. The

works are in tangible forms such as books, music, paintings, sculpture and films,

computer programs, databases, advertisements, maps and technical drawings. The

creator has the right to determine how the work is used and obtain the economic

benefits from the work.

2. Patent:

 It is an exclusive right granted by the government for an invention. It provides the patent

owner with the right to decide when and how the invention can be used by others. The owner of the

patent is granted a legal monopoly for a limited period of time.

3. Trademark: 

A trademark is a word, name, symbol, or device that distinguishes the goods or services

of one enterprise from others. A trademark enhances the visibility of products and services.

Trademarks also provide consumers with useful information.

4. Design:

 A design may be defined as the way that something is made so that it works in a certain

way or has a certain appearance. It constitutes the ornamental or aesthetic aspect of an article. A

design may consist of three dimensional features, such as the shape or surface of an article, or of two

dimensional features, such as patterns, lines or colour.

5. Trade secrets: 

A trade secret is any formula, pattern, physical device, idea process, or other

information that is the sources of competitive advantage the marketplace. It includes marketing

plans, product formulas, financial forecasts, employee rosters, logs of sales calls, and laboratory

notebooks.