WORLD ACADEMY OF INFORMATICS AND MANAGEMENT SCIENCES
ISSN : 2278-1315
managers should also assess the internal resources of the
h. Labor costs: salaries and wages
entity, its competences and its capabilities.
Management
a. Size of the management team
The following assessment is required:
b. Historical performance
c. Skills of the managers
d. Nature of management structure, the division of
a. What are the resources of the entity?
b. Which of these resources are unique or special?
authority and responsibility
What value do they provide? (What competitive
Raw materials
advantage do they provide?)
a. Costs as a percentage of total costs
c. Will requirements for resources change, as a result
b. Sources, suppliers
of changes in the business environment?
c. Availability
d. Future provision. Scarcity?
d. How are the resources used? Are they used
e. Wastage rates
effectively and efficiently?
f. Alternative materials and alternative sources of
e. What core competences does the entity have?
supply
Techniques for assessing resources and competences
Non-current assets
a. What are they?
As it can be see, there are several techniques that might be
b. How old are they? What is their expected useful life?
used to assess the resources and competences of an entity.
c. What is their current value?
d. What is the amount of sales and profit per ₦1
a. Management need to understand how value is
invested in non-current assets?
created, and how value might be lost. An
e. Are they technologically advanced or out-of-date?
assessment of the value that is created or lost by the
f. What condition are they in? How well are they
entity can be made using value chain analysis.
repaired and maintained?
b. Management can prepare a capability profile of the
g. What is the utilization rate for each group of
entity. This is an assessment of the key strategic
noncurrent assets?
processes that are needed to provide consistently
Intangible resources
superior value to customers. This is an assessment
a. Are there any intellectual rights, such as patent rights
of capabilities and competitive advantage.
and copyrights?
b. Are there valuable brand names?
c. A capability profile might be prepared together
c. Does the organization have any identifiable
goodwill?
with
a
SWOT
(Strength,
Weakness,
d. What is the reputation of the entity with its
Opportunities and Treats) analysis
.
customers?
In order to prepare a capability profile or a SWOT analysis,
e. How well does it know them?
management need a thorough understanding of the resources
f. Is the work force well-motivated?
that the entity has, the value of those resources, and the
Financial resources
competences that the entity has acquired in using those
a. What is the capital of the entity?
resources. This can be provided by a resource audit.
b. What are its sources of new capital?
c. What are the cash flows of the entity?
d. What are its sources of liquidity?
Resource audit
A resource audit is an initial assessment of the resources of
e. How well does it control trade receivables?
an entity. It is carried out to establish what resources there
f. How well does it control other elements of working
are, which are unique and how efficiently and effectively
capital?
they are being used.
Internal controls and organization
a. How well does the entity control the use of its
A resource audit should identify all the significant resources
resources?
that are used by an entity. These will vary according to the
b. How effective are its controls over the efficient and
nature of the entity. In general, however, a resource audit
effective use of assets?
should provide data about the following resources:
c. How effective are its controls over accounting and
financial reporting?
d. How effective are its controls over compliance with
Human resources
(Part-time
and
fulltime
employees,
consultants,
regulations?
subcontractors etc.)
e. How effective are its risk management systems?
f. Is the entity organized in an efficient way?
a. Size and composition of the workforce
Evaluating resources
b. Efficiency of the workforce
Having identified the key resources of an organization or
c. Flexibility of the workforce
company, management can evaluate them and the entity’s
d. Rate of labor wastage/turnover
ability to use them efficiently and effectively to create value
e. Labor relations between management and workers
(competences).
f. Skills, experience, qualifications
g. Any particular expertise?
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