STRATEGIC DIAGNOSIS

How scarcity in resources affects strategic decision making

NGUYEN THUY QUYNH

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How scarcity in resources affects strategic decision making?

What is resource?
Resource is an economic or productive factor required to accomplish an
activity in order to achieve desired outcome. The resources of an
organization consist of people, materials, equipment, capital, knowledge,
time, etc.

What is scarcity of resource?

Scarcity refers to a common economic problem, which is the gap between
limited resources and unlimited desires.

What is a bottleneck?
A bottleneck is the resource that requires the longest time in operations of
the supply chain for a certain demand. Normally, the inventory before a
bottleneck is high and parts after a bottleneck are insufficient.

What is Strategic decision making?

Strategic decision making, or strategic planning, involves in the process
of creating an organization's mission, values, goals and objectives.

How do scarcity in resources affects strategic decision making?

Organizations typically have limited resources. This situation requires
managers to make decisions about how to allocate resources efficiently,
in order to satisfy basic needs and as many additional wants at possible.
Strategic decision making and planning is ultimately about resource
allocation and would not be relevant if resources were unconstrained.

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What is resources allocation?

Resource allocation is the process of assigning and managing assets in a
manner that supports an organization's strategic goals.

How to allocate resource?

Using different methods, the process can actually boost the performance
rather than serve as a disturbance.

Resource attrition: making necessary cuts in resources as part of a

natural attrition process.

Process re-engineering: Dramatically changing processes and using

technology and redesigned jobs to accomplish work much more
productively.

Diversification: Selling parts of the business that are not effective or

Adding new ranges of products that can be accomplished more
effectively.

Outsourcing: Transfer parts of business to outside vendors who can

handle more efficiently or effectively

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Bibliography
Frankel, E. H., 2014. American Action Forum. [Online]
Available at: http://americanactionforum.org/research/better-decisions-in-atime-of-scarce-resources
Navi Radjou, Jaideep Prabhu, Prasad Kaipa, Simone Ahuja, 2010. Harvard
Business Review. [Online]
Available at: https://hbr.org/2010/06/ibm-just-released-its-global
Vossoughi, S., 2012. Harvard Business Review. [Online]
Available at: https://hbr.org/2012/03/the-silver-lining-to-scarcity

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