Introduction Many people think the term 'Resource management' refers essentially to financial management. It is only partly true. Resource involves and means all types of it. In the olden days they were known as 3M's - Men (and Women), Money and Materials. Hence, resource management means management of all the three. A business needs all the three resources. Why is resource management important? The answer is easy and simple. A business utilizes all these resources to produce some goods or services. Then it tries to market and sell those products or services in the marketplace. If there is no competition, than the factor of efficient use of resources available does not matter, because it will get passed on to customers or consumers. However, in this extremely competitive age, that would be unwise to expect.
In the socialistic economies and societies of the past, it did happen. In a protected and artificially controlled economy, the inefficiencies do not get exposed, though it affects the economy in the long run. Soviet Union, China and India were all socialistic economies in the past. Their progress has been slow compared to capitalistic economies. The reason is resources were not used efficiently. Resource utilization and management was nobody's baby in such economies, clouded by ideologies, which encouraged collective mediocrity at the cost of individual brilliance, leadership, innovation and entrepreneurship. The state should provide resources in the form of proper infrastructure and right, growth oriented economic policies for the development of private enterprise and carry on with the regulation. The state is always responsible for regulation and proper governance. Obviously, strategic resources, affecting the national security, should be under the state's purview and responsibility. In an economy like USA, even that is under private sector's purview in some cases. A government has no role in running a business or a commercial enterprise. Resource management should not be clouded by political ideologies. However, this page is not about political ideologies. This page is about efficient and effective use of all available resources.
Management of Resources It is an inalienable law of nature that efficiency and effectiveness will improve only with proper utilization of resources available. This starts at home of each and every individual and goes on to benefit the economy and the country as a whole. This is what the great Economist, Adam Smith said in his book 'The Wealth of Nations'. It is a seminal work on Economics. Adam Smith is as synonymous to Economics as Isaac Newton is to Physics. Though some aspects of modern economics have changed, thanks to John Maynard Keynes' theories, the basic principles of macroeconomics as propounded by Adam Smith are always valid. Einstein's theory of relativity does not replace Newton's Laws. It provides a paradigm shift. Economics is a very difficult subject to understand, because of conflicting behaviors of the economy, under various circumstances. But the fact remains that efficient and effective management of resources is the key for the economic upliftment of the people and hence the country.
Now you may as well ask why efficiency is important. There are two reasons for it. First is that the resources are very scarce. They are expensive. Second reason is that any business must make a reasonable profit after all expenses, interest and depreciation. It must pay taxes and still have money to reward the shareholders. The reward to the shareholders must be better than any other investments. This is not easy in the competitive scenario that exists today. A small factory in a remote place in China producing a component for an engine for a GM or Ford factory in USA, can make a number of people jobless in USA. One can get a top Chinese Engineer at USD 10,000 per annum. Six Indian IT specialists sitting in Bangalore or Hyderabad or Chennai can replace 1 person in USA. An average IT specialist in USA earns USD 60,000 as against USD 10,000 an average Indian IT specialist earns. This is where the irony of the situation comes in. Both China and India have tremendous and unlimited human resources.
Summary & Conclusion Resource management is basically an economic activity. Majority of the businesses do not understand economics. Economics is often called a dismal science by many. Pure economics may be dull and dismal but not applied economics. It can be exciting and orgasmic. The same is the case with Mathematics and many other subjects. It is very essential that every business activity is studied from an economist's point of view. Economics is a very important subject, but unfortunately is not very popular with most young people. The demand for economists is very low and as a result, it does not attract many talented people. Today everybody is getting into IT or Engineering or Medicine or Biotechnology or some other modern subjects. A stage may come when we would not have anybody qualified in other subjects, which are equally important. I would recommend that every business utilizes economists to advise them on the economic trends, so that they can fine tune their strategies and policies.
Note:
This article is dedicated to my father (Late) Mr. T Gopalachary who was an Economist and Auditor in the Ministry of Defense, Government of India.
Copyright. August 2007. www.madgopes.com.
To learn more about this author, visit Madhavan T Gopalachary's Website.
Like this article? Share it with your friends
 |
Related Articles |
|
 Human Resource Management
|
| |
Ask any CEO of any Fortune 500 company what the most important part of their company is, what is the one single thing that drives their company to reach new heights of success, and I guarantee you they will tell you...
|
|
Organizational Readiness To Performance Management
|
| |
Organizational Readiness to performance management is crucial in ensuring an efficient and effective evaluation of the individual, departmental, and organizational performance. Therefore, it is important that, befor...
|
|
Human Resources Manager
|
| |
As the human resources manager of any small company, you are responsible for creating a solid backbone for that business. It is a challenging job, but not one that you have to do alone. Great people have come before...
|
|
Human Resources Degree
|
| |
You know you want a career in human resources, but you’re not sure whether to get a specialized education in it or not? It’s a tricky question that many people in the industry are asking these days: just what exactl...
|
|
2.5 Conclusion: Economic Report on Africa 2007
|
| |
Despite notable economic recovery in Africa since the turn of the 21st century, the
continent still faces important challenges in attaining its development goals.
|
|
|
Madhavan T Gopalachary
(Visit Madhavan's Website)
Madhavan Gopalachary, nick name "madgopes"
(g pronounced as in go) given by IIT
classmates, is a Mechanical Engineer and
an alumnus of Indian Institute of
Technology, Madras having passed out
specializing in IC Engines &
Thermodynamics.
He has nearly 35 years of experience in
the Corporate World. He started off as a
trainee and handled sales, marketing,
manufacturing, product management, profit
center management, strategic planning and
corporate development including R & D in
various organizations and at various
levels before becoming a CEO. His last two
professional assignments were at CEO level
before embarking to start management
consultancy business on January 01, 1998.
He has worked for British, Swedish MNCs as
well as very large Indian business houses.
He has spent a large portion of his time
from June 1998 till date in East African
Countries practicing as an independent
Management Consultant.
More details can be obtained at the
following web sites:
mmg.name/
mtg.html
mmgconsu
lting.biz/
|
|
 |
|
Madhavan T Gopalachary's
Complete
List Of
Management
Articles
|
|
If you enjoyed this article, get Madhavan T Gopalachary's Complete List of Management Articles For FREE!
|
|
|
|
