Management resources are only meaningful when leveraged for corporate growth #103
Companies establish management philosophies to fulfill their purpose of existence.
Then, to realize that philosophy, they formulate strategies and promote business activities accordingly.
What supports these activities are so-called management resources.
Fundraising, sales, human resource management, and business administration—none of a company's activities can stand alone.
They only function when various resources are combined.
What constrains corporate growth?
The concept of management resources was systematically presented by economist Edith Penrose.
She pointed out that while there are limits to corporate growth, the cause is not physical constraints, but rather a relative shortage of management resources.
In other words, whether a company can grow depends not on the size of the market or the scale of its facilities, but on
how well it can secure and utilize appropriate management resources.how well it can secure and utilize appropriate management resources is what determines it.
What are management resources?
Generally, management resources refer to the following:
• Human (talent)
• Physical (facilities, products, facilities, etc.)
• Financial (funds)
In addition to these tangible assets,
• Knowledge
• Information
are also important management resources, known as intangible assets.
A company's competitiveness is not born simply by possessing these.
What is important is to make the capabilities of each resource interact with one another.
The result is a benefit that cannot be obtained individually, namely synergy.
And through the accumulation of this synergy, the company's unique strength, its core competence, is formed.
Why are 'people' important now?
Among management resources, human resources (talent) are considered particularly important.
Traditional human resources were centered on operational tasks such as labor management, legal compliance, and system administration.
While these are necessary tasks, they tended to become
precedent-based and routine work.However, the situation has changed significantly now.
• Deepening labor shortages
• Progress in mechanization and automation
• Acceleration of technological innovation
In this environment, talent is required to provide more than just labor; they need
creativity and judgment.As a result, corporate competitiveness has become heavily dependent on the 'quality of talent'.
That is why
strategic human resource management (strategic HR) is attracting attention now.
We are in an era where leading corporate transformation from the perspective of talent and organization is directly linked to corporate growth.
Physical and financial assets are the foundation of value creation
The value a company provides to customers, in the case of a manufacturer, is first and foremost its products (physical goods).
However, products are not born out of nothing.
• Research and development facilities
• Manufacturing equipment
• Software
• Factories and land
Only with these tangible fixed assets can products be created.
Companies invest funds (money) into these assets and earn profits by selling products and services.
And that profit circulates as:
• New investments
• Employee salaries and benefits
• Preparation for future risks
Therefore, what is important for a company is not just raising funds, but
securing them at the right time and utilizing them effectively.Fundraising is not just about sales.
Including borrowing from financial institutions, it becomes an important management strategy.
The era of intangible assets
In recent years, intangible assets have become particularly important in management.
As symbolized by DX (Digital Transformation), the evolution of digital technology is significantly changing the competitive environment for companies.
Intangible assets include the following:
・Technology ・Talent ・Organizational strength ・Customer networks
・Brand ・Customer data ・Know-how
Furthermore, relationships with
・Society ・Regions ・Industries ・Customers
also become important assets.
These are also called
intellectual property or intellectual assets.Depending on how knowledge and information are handled, they can bring great profits to a company or, conversely, cause significant losses.
Therefore, careful management, including non-disclosure agreements (NDAs), is essential.
Also, it is important to have a perspective that views
everything that can become a future strength as a management resource, not just things with already clear value like patents and trademarks.
Management resources are finite
For any company, management resources are not infinite.
That is why companies must carefully judge:
• Which market
• Which business
• Which resources
• How much to allocate
This is called
management resource portfolio.By allocating resources while considering profitability, safety, and growth potential, corporate value expands.
Growth is 'resource circulation'
There is one more thing that must not be forgotten.
That is, do not invest all management resources in the short term. Companies also need to prepare for:
• Future investments
• Unforeseeable risks
Corporate growth can be said to be the continuation of this cycle:
investing management resources, generating profit, and accumulating them as resources again.
And, in the coming era,
people, goods, capital, knowledge, information...
even more new management resources may emerge.
As the environment changes, what is required of companies is
not possessing resources, but utilizing them.