Question

Why are resources needed for an enterprise ?

Hint:

Resources are the 'fuel' for the business 'engine'. Without resources like capital, people, and materials, the enterprise simply cannot start, operate, or grow.

Answer 1

Resources are the fundamental inputs or assets that an enterprise uses to carry out its business operations, produce goods or services, and achieve its objectives. They are essential for every stage of a business's life, from startup to growth and maturity. Resources are needed for the following key reasons:

To Commence Business Operations: At the very beginning, resources are needed to establish the enterprise. This includes financial resources (capital) to acquire initial assets, physical resources (land, building, machinery), and human resources to set up the operations.

For Production of Goods and Services: The core activity of most enterprises is production. This requires a continuous supply of resources such as raw materials (physical resources), skilled and unskilled labour (human resources), and machinery and technology (physical and technical resources).

To Run Day-to-Day Operations: An enterprise needs working capital (a financial resource) to manage its daily activities. This includes paying salaries, purchasing raw materials, paying rent and utility bills, and managing inventory.

For Growth and Expansion: To grow, an enterprise needs to invest in additional resources. This could involve acquiring new machinery, opening new branches, hiring more staff, or investing in research and development (R and D) to create new products.

To Gain Competitive Advantage: Resources, especially unique ones like proprietary technology (technical resource), a strong brand image (intangible resource), or a highly skilled team (human resource), are critical for an enterprise to outperform its competitors and establish a strong market position.

To Adapt to Change: The business environment is dynamic. Enterprises need resources, particularly financial and technological ones, to adapt to changes, such as new market trends, technological advancements, or new regulations.