Business Studies Resources

Resources of a Business

Author: Jim Riley Last updated: Sunday 23 September, 2012

In our introduction to the topic of business strategy, we used Johnson & Scholes' definition stating that "Strategy is the direction and scope of an organisation over the long-term: which achieves advantage for the organisation through its configuration of resources within a challenging environment, to meet the needs of markets and to fulfil stakeholder expectations".

So, what are these "resources" that a business needs to put in place to pursue its chosen strategy?

Business resources can usefully be grouped under several categories:

Financial Resources

Financial resources concern the ability of the business to "finance" its chosen strategy. For example, a strategy that requires significant investment in new products, distribution channels, production capacity and working capital will place great strain on the business finances. Such a strategy needs to be very carefully managed from a finance point-of-view. An audit of financial resources would include assessment of the following factors:

Existing finance funds
- Cash balances

- Bank overdraft

- Bank and other loan

s- Shareholders' capital

- Working capital (e.g. stocks, debtors) already invested in the business

- Creditors (suppliers, government) Ability to raise new funds
- Strength and reputation of the management team and the overall business

- Strength of relationships with existing investors and lenders

- Attractiveness of the market in which the business operates (i.e. is it a market that is attracting investment generally?)

- Listing on a quoted Stock Exchange? If not, is this a realistic possibility?

Human Resources

The heart of the issue with Human Resources is the skills-base of the business. What skills does the