Optimizing Resource Allocation Among Business Units for Growth

This report delves into the critical aspects of resource allocation within business units, emphasizing the importance of cost-effectiveness and strategic planning. It outlines a step-by-step resource allocation process, starting with analyzing business needs and available resources, formulating action plans, and evaluating the effectiveness of the allocation. The report discusses the use of cost-effectiveness and cost-benefit analysis models to measure the outcomes of resource planning, highlighting the need for continuous budget review and alignment with actual expenditure. Furthermore, it stresses the importance of predetermining target financial outcomes and regularly reviewing actual financial performance against the budget to ensure optimal resource utilization and achievement of business objectives. Desklib offers a platform to access this document along with a wealth of other study resources.

Running head: RESOURCE ALLOCATION AMONG BUSINESS UNITS
Resource Allocation among business units
Name of the Student:
Name of the University:
Author Note:

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RESOURCE ALLOCATION AMONG BUSINESS UNITS
Part 1: Cost effectiveness:
The business organizations should allocate its resources using an appropriate allocation
model to boost its profits and reduce losses. They can use tools use tools like operational
planning and plan their operations according to the business needs to ensure efficient utilization
of resources. They can compare between the benefits the company can derive from particular
strategies against the costs which these strategies would attract to nominate the appropriate
strategies. They should also use cost-benefit analysis and assign monetary value to the expenses
to ascertain the profits. The cost benefit analysis should consider future requirements like human
resource management and marketing expenditure to counteract new competitors (Ong’ayo
Francis David and Adams 2018).
Part 2: The resource allocation process:
The business organisations must the following steps in order to allocate their resources
against the different business units so to maximise the profit and reduce expenditure and losses
of resources:
Step1: Analysing the business needs:
The business organisations should first recognise their business objectives like target
profits, market position and future brand value benchmark. These business targets to be achieved
would pave ways for formation of strategies (Dudin et al. 2015).
Step 2: Present resources available:
The apex management and the departmental heads should then obtain information about
the resources available and the actual amount of resources required. The resources over here

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RESOURCE ALLOCATION AMONG BUSINESS UNITS
should include material resources, financial resources, human resources and technological
resources (Koksal et al. 2017).
Step 3: Formulating action plan:
The business organisations should formulate actions plans regarding the allocating the
resources. They should form the action plans both the strategic level and operational levels..
Step 4: Evaluation of the resource allocation plan:
The apex management and the departmental heads should evaluate the effectiveness of
the resource allocation from time to time based on the outcomes like profits achieved post
allocation of resources. They should find out gaps between the target outcomes and the actual
outcomes and take steps to improve their performances.
Part 3:
The business organisations can use two models to measure and evaluate the outcome of
the resource planning. The two models are cost-effectiveness model and cost-benefit analysis.
The cost-effectiveness model measures the degree of effectiveness of firms in aligning their
resources to achieve desired business outcomes. The cost-benefit model measures the outcomes
in resource allocation in terms of monetary outcomes like increase of surplus amount in terms of
expenses compared to the previous budget (Bitner and Sierak 2017).
Part 4:
The business organisations must review the forecast budget against the actual expenditure
using the business plan cycle. The apex management should continuous basis update the budget

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RESOURCE ALLOCATION AMONG BUSINESS UNITS
to ensure that it is aligned to the actual expenditure. This would enable the management to take
steps to deal if the actual expenditure soars above the sources of income in the budget.
Part 5:
The apex management would require to predetermine the target financial outcomes like
target budget surplus while forming the budgets. This would provide them the base to form
strategies and allocate resources in the different fields or cost centres. The should review the
actual financial performances against the budget and take appropriate measures (Koksal et al.
2017).

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RESOURCE ALLOCATION AMONG BUSINESS UNITS
References:
Bitner, M. and Sierak, J., 2017. The Impact of Developmental Exependiture on the
Competitiveness of Local Governments (No. 111/2017).
Dudin, M., Kucuri, G., Fedorova, I., Dzusova, S. and Namitulina, A., 2015. The innovative
business model canvas in the system of effective budgeting.
Koksal, E.S., Tasan, M., Artik, C. and Gowda, P., 2017. Evaluation of financial efficiency of
drip-irrigation of red pepper based on evapotranspiration calculated using an iterative soil water-
budget approach. Scientia Horticulturae, 226, pp.398-405.
Ong’ayo Francis, D., David, O. and Adams, Y., 2018. An Analysis of Relationship between
Relevance at the Lexical and the Phrasal levels of Financial Budget Discourse Texts.
DEVELOPMENT, 7(1).