Principles of resource management

In the modern organization, strategic planning is imperative if the organization is to achieve sustainable success. The systematic process involves formulating a vision and essentially translating it into concrete goals, and prioritizing resources to reach intended outcomes (Wolf and Floyd, 2017). The basis of strategic planning is a variety of theoretical constructs that have developed over the years. Therefore, it is the responsibility of organisational managers to select the strategic planning model that suits their organization best.   

            The SWOT model is one of the most popular methods applied in strategic planning. The model involves the assessment of an organization’s external and internal environment. The theoretical framework behind this model is basic planning with deliberation based on an organization’s existing issues. The model allows for the identification of an organization’s strengths, weaknesses, opportunities, and threats in its environment. Besides defining the position of the firm in relation to its competitors, the SWOT method also enables an organization to gauge its competitive advantage and its capabilities to defend its position in the relevant industry. During strategic planning, an organization has to summarise all information and opinions about the trajectory of its business. The SWOT matrix provides a brief and concise visual representation of organization’s business environment (Allmendinger, 2017). From a personal perspective this model could be the perfect starting point when it comes to strategic planning at the nursing home where I work. A major advantage of the SWOT analysis is that one can assess the current and future state of an organization. The short-term and long-term SWOT analysis is a modification of the classic that makes this possible. Additionally, each entry in the matrix can be categorised using an organization’s functional categories such as finance, human resources, and marketing. If each of the entry is assigned to its respective category, organisational assessment will be more comprehensive and will play an eminent role in strategizing for the future. The long-term SWOT matrix is of particular importance in strategic planning since it focuses on the most critical future operating factors. In the context of the nursing home, it would enable the identification of future strategic resources. The assessment of factors from the corporate, business, and functional levels is usually of great help when it comes to the analysis and solution of problems. The simplicity of the SWOT method is, in essence, the greatest strength of the model as a strategic planning tool. On the other hand, the lack of prioritisation could be a major hurdle in the case of the nursing centre where decision-making should be timely and perfect.

            Competitor analysis is another important theoretical model when it comes to strategic planning. The nursing home, like any other organisation, has its competitors. The healthcare market is overcrowded and the competitor analysis model helps an organisation identify its market position in relation to its competitors. The analysis of elements such as potential market share, competitive advantage, financial status, and potential competitors is an important aspect of this model. The level of threat of each competitor is then determined. The collection of information is achieved through methods such as competitor intelligence, statistical overviews, and acquiring data from websites. For the nursing home, the dynamic data on an organisation’s competitors is essential when it comes to strategic planning. It would help the organisation react accordingly to changes in the market. In the healthcare sector, this would enable better service provision and consistency. The obvious drawback with this model is that focusing a lot on competitors could limit creativity and innovation when it comes to organisational strategies.

            The McKinsey 7-S model is often used by organisations to ensure that internal operational activities are coordinated and balanced in order to ensure successful running of the organisation. Every organization has its objectives and this model helps analyse their suitability and if the organisation can achieve them in their current state. Analysis based on this model is not restricted to strategy alone since it considers other aspects such as systems, structure, staff, skills, style, and shared values. The holistic model analyses operational efficiency and helps in the formulation of strategic objectives that will increase organisational efficiency (Ravanfar, 2015). The nursing home is still in its growth phase which often translates to a variety of inefficiencies. The model would help streamline operational aspects of the organisation thus fostering the growth agenda. The evaluation of soft elements such as shared values and their consistency with other attributes would also help strategize appropriately with regard to the human resources component of the organisation. Despite the strengths of the model, it ignores the role played by the external environment in an organisation. The model is also static thus making it a risky choice for a growing organisation.         

Principles of Resource Management

            Resource management is an important aspect of project delivery that revolves around the acquisition and deployment of internal and external resources. The resources in question may be obtained from either the organization itself or from external sources. The primary goal of resource management is to ensure the prudent utilization of resources to the completion of the project in question, bearing in mind the timelines set by the organisation (Association for Project Management, 2018). Many organisations fail in project delivery due to the inability to align organisational resources to the see out the maturity of the various processes involved. With this in mind, there are a variety of principles that define resource management and help drive an organization forward.

            The first principle of resource management is that resources are in essence people. While matrices such as the RACI chart are important in determining how different resources are being utilized, the efficiency of people, who are also resources, cannot be determined by hard data analysis. Therefore, the use of soft skills such as leadership, communication, and guidance is necessary for the proper management of human resources. Data analysis can only explain resource utilization and availability. However, it cannot boost the productivity of resources. Interacting with the relevant resources regarding concerns can help resolve problems (Hollenbeck, Noe, & Gerhart, 2018). The second principle is that visibility is key in any organisational setting. It is necessary for an organisation’s management to strive for a balance between understanding what motivates a team in the workplace and what they are working on. This ensures a holistic view of all projects and resources. Statistical metrics identify problem areas in a project, but to solve it one must interact with individuals on the ground. The third principle of resource management is that collaboration increases productivity in a workplace. It is, therefore, necessary to develop tools and strategies that foster collaboration between teams and individuals since they will help the organisation in the long run. The principle of allocation is also a key element of resource management. It is always important to allocate right resources for right tasks. Assigning the resources alone is not enough. Recourse capability and interest should always be considered before any assignment. This way, a manager can guarantee the productivity of the resource. Rewards and recognition are other important considerations in resource management. The efforts of an organisation’s resources should always be appreciated by the management. They should know that their contribution is important and be rewarded accordingly.

            The aforementioned principles make sense since they explain how resources should be managed in any project. Their general nature means that they are applicable across a wide range of industries with considerable success. The rise of analytics has provided organizations with potent tools for determining the efficiency of resource allocation. However, concentrating too much on analytics could alienate human resources. This is where the principles of resource management come in. The insistence on the human component of organisational resources make them an important component of the field. It is imperative that any organisation that seeks to achieve sustainable success adopts the principles when dealing with resources in the organisation. In essence, employees are the most important resource in an organisation. If a firm were to optimally utilise available resources without considering the plight of the employees, the firm would not achieve maximum productivity. The principles described help managers balance the focus on resources with none been left out.   

Principles of Capital Investment Appraisal

            Capital investment appraisal is an organisational process which primarily involves determining the short-term and long-term investments of a firm. A variety of organisational components are usually under scrutiny in this process. They include property, plants, machinery, and research and development projects (Bierman and Smidt, 2012). The selection of appraisal factors is based on the priorities of an organisation’s stakeholders. The ascertainment of capital investment appraisal is achieved through a variety of techniques which include net present value, rate of return, profitability index, pay back period, and real option analysis. Using the techniques, an organization is able to rank various projects. In most cases, organisations run many projects concurrently. These projects are usually appraised at the same time in a bid to determine their financial viability. After the process, projects are ranked with the highest ranking being implemented first with utmost diligence due to their importance to the organisation.  

            The theoretical framework of capital investment appraisal is based on a variety of principles. They play a key role in the prioritisation of various projects in an organisation. The first principle is that decisions in a business are based on changes in cash flows rather than fluctuations in accounting income. Aspects of cash flow that are relevant to the projects in question are usually relayed costs and externalities. These cannot be avoided even if the project is completed. The second principle of capital budgeting is that cash flows are based on opportunity cost. In essence, this means that the financing of the project will lead to a substantial decrease in the firm’s cash flows. The third principle revolves around the timing of cash flows. This principle is based on the concept of the time value of money. As such, money received by an organization now would be worth more if it were to be received in the future. The fourth principle in this context is that the ascertainment of cash flows is done on an after-tax basis. This ensures that measurement is based on its present value. The fifth principle is that the financing costs of a project are reflected on its required rate of return (Gitman, Juchau, and Flanagan, 2015). This could potentially increase the value of the firm if the rate of return is higher than the cost of capital.   

References

Allmendinger, P., 2017. Planning theory. Macmillan International Higher Education.

Association for Project Management, 2018. Introduction to Resource Management. Retrieved from https://www.apm.org.uk/body-of-knowledge/delivery/resource-management/

Bierman Jr, H. and Smidt, S., 2012. The capital budgeting decision: economic analysis of investment projects. Routledge.

Gitman, L.J., Juchau, R. and Flanagan, J., 2015. Principles of managerial finance. Pearson Higher Education AU.

Hollenbeck, J.R., Noe, R.A. and Gerhart, B.A., 2018. Human resource management: Gaining a competitive advantage. McGraw-Hill Education.

Ravanfar, M.M., 2015. Analysing Organizational Structure based on 7s model of McKinsey. Global Journal of Management and Business Research, 15(10), pp. 623-640.

Wolf, C. and Floyd, S.W., 2017. Strategic planning research: Toward a theory-driven agenda. Journal of Management, 43(6), pp.1754-1788.