Textbook - Resource Mobilization, Entrepreneurship, Class 11 | Entrepreneurship Class 11 - Commerce PDF Download

 Page 1


  
202 
UNIT 7 
Resource Mobilization 
Learning Objectives:  
After studying the chapter you should be able to: 
? Identify the different types of resources 
? Understand the selection process of human resources 
? Describe the role and importance of a mentor 
? State the meaning of fixed and working capital  
? Explain the factors of affecting working capital  
? Describe the meaning of capital structure  
? Explain the different sources of finance 
? Understand the concept of mentorship  
? Highlight the role and importance of mentor  
? Classify the business and industry  
? Identify the various sources for an entrepreneur  
Case Study 
Interesting Realization 
Rahul Sharma, founder-owner a five store hotel, engineer from Benaras Hindu University has come a 
long way. Hailing from a family which had three generations of businessman, Rahul, had to virtually 
start from scratch to struggle his way up in life. His forefathers were well settled at Batala in Punjab, 
where they had Foundries non-ferrous rolling mills and machine tool Units. In 1957, Rahul’s father 
decided to separate from his family and shift to Bhandara, near Nagpur to start ametal unit, in 
partnership with a local businessman for manufacturing of non-ferrous utensils.  
In 1968, Rahul took over his father’s business, only to find that the income from the business was 
barely enough to sustain his large family of four brothers and two sisters. 
Rahul critically reviewed the whole business situation the companies structure, overheads, raw-
materials, suppliers, etc. to evaluate where the things were going wrong. 
It was here he realized, that, on one hand, their basic raw-material like brass scrap, copper and zinc, 
was not only costly but the transportation cost heavily affected their working capital as this all came 
from the western region of Maharashtra, mainly from Mumbai and Pune and on other hand, the major 
chunk of their finished products i.e., brass utensils were also sold in these regions. This fact came as the 
turning point. 
Page 2


  
202 
UNIT 7 
Resource Mobilization 
Learning Objectives:  
After studying the chapter you should be able to: 
? Identify the different types of resources 
? Understand the selection process of human resources 
? Describe the role and importance of a mentor 
? State the meaning of fixed and working capital  
? Explain the factors of affecting working capital  
? Describe the meaning of capital structure  
? Explain the different sources of finance 
? Understand the concept of mentorship  
? Highlight the role and importance of mentor  
? Classify the business and industry  
? Identify the various sources for an entrepreneur  
Case Study 
Interesting Realization 
Rahul Sharma, founder-owner a five store hotel, engineer from Benaras Hindu University has come a 
long way. Hailing from a family which had three generations of businessman, Rahul, had to virtually 
start from scratch to struggle his way up in life. His forefathers were well settled at Batala in Punjab, 
where they had Foundries non-ferrous rolling mills and machine tool Units. In 1957, Rahul’s father 
decided to separate from his family and shift to Bhandara, near Nagpur to start ametal unit, in 
partnership with a local businessman for manufacturing of non-ferrous utensils.  
In 1968, Rahul took over his father’s business, only to find that the income from the business was 
barely enough to sustain his large family of four brothers and two sisters. 
Rahul critically reviewed the whole business situation the companies structure, overheads, raw-
materials, suppliers, etc. to evaluate where the things were going wrong. 
It was here he realized, that, on one hand, their basic raw-material like brass scrap, copper and zinc, 
was not only costly but the transportation cost heavily affected their working capital as this all came 
from the western region of Maharashtra, mainly from Mumbai and Pune and on other hand, the major 
chunk of their finished products i.e., brass utensils were also sold in these regions. This fact came as the 
turning point. 
  
203 
Easy availability of raw-material and closeness to the market acted as the key agents to make him shift 
to Pune. Since then, there was no looking back. This not only resulted in saving the transportation cost 
but brought down; significantly, their overall cost of production. 
Could you understand the reason for Rahul Sharma’s success? Yes, Resource availability. 
Introduction 
A very important function of entrepreneurs is the arranging and procuring proper 
resources.?THINK? is an important word for entrepreneurs, because cows do not give milk, 
milk has to be extracted-meaning entrepreneur‘s first job is to arrange, in a constructive way, 
the resources that are required for the enterprise‘s working. 
An economic or productive factor required to accomplish an activity, or as a means to 
undertake an enterprise and achieve the desired outcome is referred as 'Resource'. Therefore, 
'resource' refers to ?anything or means (physical tangible/non-physical-tangible) required or 
required to support the activities of organisation to achieve pre-determined organizational 
goals.? 
These 'resources' are life blood of any economic activity. Their successful and timely 
identification, procurement and utilization ensure the success of an organisation. Human, 
financial, physical and knowledge are the basic factors that provide a firm, the means to 
perform its business processes and are referred as 'Business Resources'.  
Procurement of Resources: Mobilisation 
Resource mobilization is the process of getting resource from resource provider, using different 
mechanisms, to implement the organization‘s work for achieving the pre-determined 
organizational goals. It deals in acquiring the needed resources in a =timely-cost effective 
manner‘. Resource mobilization advocates upon having the right type of resource, at the right 
time, at right price with making right use of acquired resources thus ensuring optimum 
utilization of the same. 
The most basic resources, for any enterprise are: 
a) Land  
b) Labour 
c) Capital 
Though 'other resources' required vary from enterprise to enterprise, but commonly comprise of: 
a) Entrepreneurship 
b) Energy 
c) Expertise 
d) Information 
e) Management 
f) Machines 
g) Materials and Methods 
Page 3


  
202 
UNIT 7 
Resource Mobilization 
Learning Objectives:  
After studying the chapter you should be able to: 
? Identify the different types of resources 
? Understand the selection process of human resources 
? Describe the role and importance of a mentor 
? State the meaning of fixed and working capital  
? Explain the factors of affecting working capital  
? Describe the meaning of capital structure  
? Explain the different sources of finance 
? Understand the concept of mentorship  
? Highlight the role and importance of mentor  
? Classify the business and industry  
? Identify the various sources for an entrepreneur  
Case Study 
Interesting Realization 
Rahul Sharma, founder-owner a five store hotel, engineer from Benaras Hindu University has come a 
long way. Hailing from a family which had three generations of businessman, Rahul, had to virtually 
start from scratch to struggle his way up in life. His forefathers were well settled at Batala in Punjab, 
where they had Foundries non-ferrous rolling mills and machine tool Units. In 1957, Rahul’s father 
decided to separate from his family and shift to Bhandara, near Nagpur to start ametal unit, in 
partnership with a local businessman for manufacturing of non-ferrous utensils.  
In 1968, Rahul took over his father’s business, only to find that the income from the business was 
barely enough to sustain his large family of four brothers and two sisters. 
Rahul critically reviewed the whole business situation the companies structure, overheads, raw-
materials, suppliers, etc. to evaluate where the things were going wrong. 
It was here he realized, that, on one hand, their basic raw-material like brass scrap, copper and zinc, 
was not only costly but the transportation cost heavily affected their working capital as this all came 
from the western region of Maharashtra, mainly from Mumbai and Pune and on other hand, the major 
chunk of their finished products i.e., brass utensils were also sold in these regions. This fact came as the 
turning point. 
  
203 
Easy availability of raw-material and closeness to the market acted as the key agents to make him shift 
to Pune. Since then, there was no looking back. This not only resulted in saving the transportation cost 
but brought down; significantly, their overall cost of production. 
Could you understand the reason for Rahul Sharma’s success? Yes, Resource availability. 
Introduction 
A very important function of entrepreneurs is the arranging and procuring proper 
resources.?THINK? is an important word for entrepreneurs, because cows do not give milk, 
milk has to be extracted-meaning entrepreneur‘s first job is to arrange, in a constructive way, 
the resources that are required for the enterprise‘s working. 
An economic or productive factor required to accomplish an activity, or as a means to 
undertake an enterprise and achieve the desired outcome is referred as 'Resource'. Therefore, 
'resource' refers to ?anything or means (physical tangible/non-physical-tangible) required or 
required to support the activities of organisation to achieve pre-determined organizational 
goals.? 
These 'resources' are life blood of any economic activity. Their successful and timely 
identification, procurement and utilization ensure the success of an organisation. Human, 
financial, physical and knowledge are the basic factors that provide a firm, the means to 
perform its business processes and are referred as 'Business Resources'.  
Procurement of Resources: Mobilisation 
Resource mobilization is the process of getting resource from resource provider, using different 
mechanisms, to implement the organization‘s work for achieving the pre-determined 
organizational goals. It deals in acquiring the needed resources in a =timely-cost effective 
manner‘. Resource mobilization advocates upon having the right type of resource, at the right 
time, at right price with making right use of acquired resources thus ensuring optimum 
utilization of the same. 
The most basic resources, for any enterprise are: 
a) Land  
b) Labour 
c) Capital 
Though 'other resources' required vary from enterprise to enterprise, but commonly comprise of: 
a) Entrepreneurship 
b) Energy 
c) Expertise 
d) Information 
e) Management 
f) Machines 
g) Materials and Methods 
  
204 
Planning Effective "Resource Mobilization" 
Very often, we equate the term 'resource mobilization' with fund raising. But it goes beyond the 
liquid money. It includes building valuable contacts and networks and garnering the interest, 
support and in-kind contributions, important to organisation. Organisations should make 
adequate preparations for resource mobilization to be effective and to ensure they are 
maximizing all opportunities. 
An organization‘s resource mobilization plan should be tightly integrated with organizational 
goals and be chalked out step-by-step as follows: 
 
A resource mobilization plan must follow closely, the vision, mission and goals of the 
organisation. 
Thus, the success of any enterprise lies in the capacity and ability of the entrepreneur to: 
(1) Mobilize the resources 
(2) Organize the resources  
(3) Manage them efficiently and effectively as they are always scarce with reference to their 
demand. 
Types of Resources: 
A firm's resources are the basic inputs into the production process, combined in different ways 
so as to provide firm capacity to achieve superior performance. Different firms need different 
resources. The requirement of resources depends upon: 
(a) Nature of activity  (b) Size of activity 
(c) Product specification  (d) Type of business activity 
Page 4


  
202 
UNIT 7 
Resource Mobilization 
Learning Objectives:  
After studying the chapter you should be able to: 
? Identify the different types of resources 
? Understand the selection process of human resources 
? Describe the role and importance of a mentor 
? State the meaning of fixed and working capital  
? Explain the factors of affecting working capital  
? Describe the meaning of capital structure  
? Explain the different sources of finance 
? Understand the concept of mentorship  
? Highlight the role and importance of mentor  
? Classify the business and industry  
? Identify the various sources for an entrepreneur  
Case Study 
Interesting Realization 
Rahul Sharma, founder-owner a five store hotel, engineer from Benaras Hindu University has come a 
long way. Hailing from a family which had three generations of businessman, Rahul, had to virtually 
start from scratch to struggle his way up in life. His forefathers were well settled at Batala in Punjab, 
where they had Foundries non-ferrous rolling mills and machine tool Units. In 1957, Rahul’s father 
decided to separate from his family and shift to Bhandara, near Nagpur to start ametal unit, in 
partnership with a local businessman for manufacturing of non-ferrous utensils.  
In 1968, Rahul took over his father’s business, only to find that the income from the business was 
barely enough to sustain his large family of four brothers and two sisters. 
Rahul critically reviewed the whole business situation the companies structure, overheads, raw-
materials, suppliers, etc. to evaluate where the things were going wrong. 
It was here he realized, that, on one hand, their basic raw-material like brass scrap, copper and zinc, 
was not only costly but the transportation cost heavily affected their working capital as this all came 
from the western region of Maharashtra, mainly from Mumbai and Pune and on other hand, the major 
chunk of their finished products i.e., brass utensils were also sold in these regions. This fact came as the 
turning point. 
  
203 
Easy availability of raw-material and closeness to the market acted as the key agents to make him shift 
to Pune. Since then, there was no looking back. This not only resulted in saving the transportation cost 
but brought down; significantly, their overall cost of production. 
Could you understand the reason for Rahul Sharma’s success? Yes, Resource availability. 
Introduction 
A very important function of entrepreneurs is the arranging and procuring proper 
resources.?THINK? is an important word for entrepreneurs, because cows do not give milk, 
milk has to be extracted-meaning entrepreneur‘s first job is to arrange, in a constructive way, 
the resources that are required for the enterprise‘s working. 
An economic or productive factor required to accomplish an activity, or as a means to 
undertake an enterprise and achieve the desired outcome is referred as 'Resource'. Therefore, 
'resource' refers to ?anything or means (physical tangible/non-physical-tangible) required or 
required to support the activities of organisation to achieve pre-determined organizational 
goals.? 
These 'resources' are life blood of any economic activity. Their successful and timely 
identification, procurement and utilization ensure the success of an organisation. Human, 
financial, physical and knowledge are the basic factors that provide a firm, the means to 
perform its business processes and are referred as 'Business Resources'.  
Procurement of Resources: Mobilisation 
Resource mobilization is the process of getting resource from resource provider, using different 
mechanisms, to implement the organization‘s work for achieving the pre-determined 
organizational goals. It deals in acquiring the needed resources in a =timely-cost effective 
manner‘. Resource mobilization advocates upon having the right type of resource, at the right 
time, at right price with making right use of acquired resources thus ensuring optimum 
utilization of the same. 
The most basic resources, for any enterprise are: 
a) Land  
b) Labour 
c) Capital 
Though 'other resources' required vary from enterprise to enterprise, but commonly comprise of: 
a) Entrepreneurship 
b) Energy 
c) Expertise 
d) Information 
e) Management 
f) Machines 
g) Materials and Methods 
  
204 
Planning Effective "Resource Mobilization" 
Very often, we equate the term 'resource mobilization' with fund raising. But it goes beyond the 
liquid money. It includes building valuable contacts and networks and garnering the interest, 
support and in-kind contributions, important to organisation. Organisations should make 
adequate preparations for resource mobilization to be effective and to ensure they are 
maximizing all opportunities. 
An organization‘s resource mobilization plan should be tightly integrated with organizational 
goals and be chalked out step-by-step as follows: 
 
A resource mobilization plan must follow closely, the vision, mission and goals of the 
organisation. 
Thus, the success of any enterprise lies in the capacity and ability of the entrepreneur to: 
(1) Mobilize the resources 
(2) Organize the resources  
(3) Manage them efficiently and effectively as they are always scarce with reference to their 
demand. 
Types of Resources: 
A firm's resources are the basic inputs into the production process, combined in different ways 
so as to provide firm capacity to achieve superior performance. Different firms need different 
resources. The requirement of resources depends upon: 
(a) Nature of activity  (b) Size of activity 
(c) Product specification  (d) Type of business activity 
  
205 
"Strategy is the direction and scope of an organisation over the long-term; which achieves advantage for 
the organisation through its configuration of resources within a challenging environment, to meet the 
needs of markets and to fulfill stakeholder expectations”, Johnson and Scholes. 
Thus, the question arises: What are these "Resources" that an enterprise needs to put in place to 
pursue its chosen strategy? 
Business resources can usefully be grouped as following: 
I. Physical    IV. Material  
II. Human    V. Intangible  
III. Financial    
I. Physical  
Physical resources are those that are made by human through his abilities and skills. They 
are available to an organisation in the form of buildings, plants, machineries etc. required 
for running of an enterprise. 
So, the foremost concern for the entrepreneur is to assess the 'place' where the enterprise is 
going to be established. The basic infrastructure required to be constructed is all part of 
physical resources.  
The category of physical resources covers a wide range of operational resources concerned 
with the physical capability of the enterprise, encompassing mainly: 
 
A careful selection of physical resources is essential because many allied issues are 
influenced by the 'place', selected, such as: 
(1) Capital Cost  
(2) Access to other resources 
(3) Transport and Communication Cost 
(4) Availability of manpower and its cost (wages, salaries) 
(5) Cost of production 
(6) Availability of other utilities like water, gas, fuel etc. 
(7) Access to market for both raw material and finished goods 
(8) Pollution concerns involved 
Page 5


  
202 
UNIT 7 
Resource Mobilization 
Learning Objectives:  
After studying the chapter you should be able to: 
? Identify the different types of resources 
? Understand the selection process of human resources 
? Describe the role and importance of a mentor 
? State the meaning of fixed and working capital  
? Explain the factors of affecting working capital  
? Describe the meaning of capital structure  
? Explain the different sources of finance 
? Understand the concept of mentorship  
? Highlight the role and importance of mentor  
? Classify the business and industry  
? Identify the various sources for an entrepreneur  
Case Study 
Interesting Realization 
Rahul Sharma, founder-owner a five store hotel, engineer from Benaras Hindu University has come a 
long way. Hailing from a family which had three generations of businessman, Rahul, had to virtually 
start from scratch to struggle his way up in life. His forefathers were well settled at Batala in Punjab, 
where they had Foundries non-ferrous rolling mills and machine tool Units. In 1957, Rahul’s father 
decided to separate from his family and shift to Bhandara, near Nagpur to start ametal unit, in 
partnership with a local businessman for manufacturing of non-ferrous utensils.  
In 1968, Rahul took over his father’s business, only to find that the income from the business was 
barely enough to sustain his large family of four brothers and two sisters. 
Rahul critically reviewed the whole business situation the companies structure, overheads, raw-
materials, suppliers, etc. to evaluate where the things were going wrong. 
It was here he realized, that, on one hand, their basic raw-material like brass scrap, copper and zinc, 
was not only costly but the transportation cost heavily affected their working capital as this all came 
from the western region of Maharashtra, mainly from Mumbai and Pune and on other hand, the major 
chunk of their finished products i.e., brass utensils were also sold in these regions. This fact came as the 
turning point. 
  
203 
Easy availability of raw-material and closeness to the market acted as the key agents to make him shift 
to Pune. Since then, there was no looking back. This not only resulted in saving the transportation cost 
but brought down; significantly, their overall cost of production. 
Could you understand the reason for Rahul Sharma’s success? Yes, Resource availability. 
Introduction 
A very important function of entrepreneurs is the arranging and procuring proper 
resources.?THINK? is an important word for entrepreneurs, because cows do not give milk, 
milk has to be extracted-meaning entrepreneur‘s first job is to arrange, in a constructive way, 
the resources that are required for the enterprise‘s working. 
An economic or productive factor required to accomplish an activity, or as a means to 
undertake an enterprise and achieve the desired outcome is referred as 'Resource'. Therefore, 
'resource' refers to ?anything or means (physical tangible/non-physical-tangible) required or 
required to support the activities of organisation to achieve pre-determined organizational 
goals.? 
These 'resources' are life blood of any economic activity. Their successful and timely 
identification, procurement and utilization ensure the success of an organisation. Human, 
financial, physical and knowledge are the basic factors that provide a firm, the means to 
perform its business processes and are referred as 'Business Resources'.  
Procurement of Resources: Mobilisation 
Resource mobilization is the process of getting resource from resource provider, using different 
mechanisms, to implement the organization‘s work for achieving the pre-determined 
organizational goals. It deals in acquiring the needed resources in a =timely-cost effective 
manner‘. Resource mobilization advocates upon having the right type of resource, at the right 
time, at right price with making right use of acquired resources thus ensuring optimum 
utilization of the same. 
The most basic resources, for any enterprise are: 
a) Land  
b) Labour 
c) Capital 
Though 'other resources' required vary from enterprise to enterprise, but commonly comprise of: 
a) Entrepreneurship 
b) Energy 
c) Expertise 
d) Information 
e) Management 
f) Machines 
g) Materials and Methods 
  
204 
Planning Effective "Resource Mobilization" 
Very often, we equate the term 'resource mobilization' with fund raising. But it goes beyond the 
liquid money. It includes building valuable contacts and networks and garnering the interest, 
support and in-kind contributions, important to organisation. Organisations should make 
adequate preparations for resource mobilization to be effective and to ensure they are 
maximizing all opportunities. 
An organization‘s resource mobilization plan should be tightly integrated with organizational 
goals and be chalked out step-by-step as follows: 
 
A resource mobilization plan must follow closely, the vision, mission and goals of the 
organisation. 
Thus, the success of any enterprise lies in the capacity and ability of the entrepreneur to: 
(1) Mobilize the resources 
(2) Organize the resources  
(3) Manage them efficiently and effectively as they are always scarce with reference to their 
demand. 
Types of Resources: 
A firm's resources are the basic inputs into the production process, combined in different ways 
so as to provide firm capacity to achieve superior performance. Different firms need different 
resources. The requirement of resources depends upon: 
(a) Nature of activity  (b) Size of activity 
(c) Product specification  (d) Type of business activity 
  
205 
"Strategy is the direction and scope of an organisation over the long-term; which achieves advantage for 
the organisation through its configuration of resources within a challenging environment, to meet the 
needs of markets and to fulfill stakeholder expectations”, Johnson and Scholes. 
Thus, the question arises: What are these "Resources" that an enterprise needs to put in place to 
pursue its chosen strategy? 
Business resources can usefully be grouped as following: 
I. Physical    IV. Material  
II. Human    V. Intangible  
III. Financial    
I. Physical  
Physical resources are those that are made by human through his abilities and skills. They 
are available to an organisation in the form of buildings, plants, machineries etc. required 
for running of an enterprise. 
So, the foremost concern for the entrepreneur is to assess the 'place' where the enterprise is 
going to be established. The basic infrastructure required to be constructed is all part of 
physical resources.  
The category of physical resources covers a wide range of operational resources concerned 
with the physical capability of the enterprise, encompassing mainly: 
 
A careful selection of physical resources is essential because many allied issues are 
influenced by the 'place', selected, such as: 
(1) Capital Cost  
(2) Access to other resources 
(3) Transport and Communication Cost 
(4) Availability of manpower and its cost (wages, salaries) 
(5) Cost of production 
(6) Availability of other utilities like water, gas, fuel etc. 
(7) Access to market for both raw material and finished goods 
(8) Pollution concerns involved 
  
206 
(9) Degree of legal requirements like taxes etc. 
Next, the other physical resources like machinery, tools, equipments, process 
technology, raw material etc. too require a thorough investigation as they will have 
bearing on: 
a)  Short and long term cost of the project. 
b)  Durability and utility (usefulness) expected from these assets. 
c)  Possibility of growth potential. 
d)  =Market needs‘ helps to decide the range of products and the type of 
technology. 
e)  Market size to be covered will indirectly help to assess the size/capacity of 
plant. 
f)  Quality concerns.  
g)  Feasibility for transfer of technology i.e. is it possible to acquire and 
implement the technology/technique so selected. 
h) Feasibility for training of manpower, i.e., is it possible to provide the required 
training to the workers on the selected technology?  
Outdated, obsolete, worn-out machinery, or sick plants, if acquired, will not only result in 
bad capital budgeting decisions but also hamper the innovation and creativity of an 
entrepreneur. 
Thus, current, valid technology backed by effective support service arrangements and 
maintenance be preferred.  
II. Human 
"The people working in a firm make it what it is." 
Herbert G. Hicks and C. Ray Gullet. 
The most important assets that a firm must have and that management must be most 
concerned with, are the human assets of the enterprises, in whose absence all other non-
living resources are useless. An organization‘s performance and resulting productivity are 
directly proportional to the quantity and quality of its human resource. A rich and 
continuing supply of qualified people/personnel is the best assurance an enterprise can 
have that it will flourish. 'Right man at right job at the right time'— is the mantra for 
successful enterprises because it ensures: 
(1) Benefits of specialization to the firm 
(2) Minimizes wastages of resources  
(3) Reduces inefficiencies 
(4) Reduces labour turnover ratio and rate of absenteeism  
(5) Saves cost of production