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Problems in Resource Allocation - Planning And Resources Allocation
Strategic Management - Strategy Implementation
Problems in Resource Allocation - Planning And Resources Allocation
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There are several difficulties in resource allocation. The following are some of the identified problems.
Problems
in Resource Allocation
There are several difficulties in resource allocation. The following are some of the identified problems.
i) Scarcity of resources
Financial, physical, and human resources are hard to find. Firms will usually face difficulties in procuring finance. Even if fiancé is available, the cost of capital is a constraint. Those firms that enjoy investor confidence and high credit worthiness possess a competitive advantage as it increases their resource-generation capability. Physical resources would consist of assets, such as, lard machinery, and equipment. In a developing country like India, many capital goods have to be imported. The government may no longer impose many conditions but it does place a burden on the firm’s finances and this places a restriction on
ii) Restrictions on generating resources
In the usual budgeting process these are several restrictions for generating resources due to the SBU concept especially for new divisions and departments.
iii) Overstatement of needs
Over statement of needs is another frequent problem in a bottom-up approach to resource allocation. The budgeting and corporate planning departments may have to face the ire of those executives who do not get resources according to their expectations. Such negative reactions may hamper the process of strategic planning itself.
There are several difficulties in resource allocation. The following are some of the identified problems.
i) Scarcity of resources
Financial, physical, and human resources are hard to find. Firms will usually face difficulties in procuring finance. Even if fiancé is available, the cost of capital is a constraint. Those firms that enjoy investor confidence and high credit worthiness possess a competitive advantage as it increases their resource-generation capability. Physical resources would consist of assets, such as, lard machinery, and equipment. In a developing country like India, many capital goods have to be imported. The government may no longer impose many conditions but it does place a burden on the firm’s finances and this places a restriction on
ii) Restrictions on generating resources
In the usual budgeting process these are several restrictions for generating resources due to the SBU concept especially for new divisions and departments.
iii) Overstatement of needs
Over statement of needs is another frequent problem in a bottom-up approach to resource allocation. The budgeting and corporate planning departments may have to face the ire of those executives who do not get resources according to their expectations. Such negative reactions may hamper the process of strategic planning itself.
Tags : Strategic Management - Strategy Implementation
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