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Meaning and Nature of Resources

Masters In International Business

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Natural Resources

• Intangible Resources – Good Health, Knowledge

Resource does not refer to a thing or substance, but to a function which a thing or substance may perform to attain an end.

Example-Iron Ore (mine) is a resource. Ore resources serve as raw material for Iron & Steel Industry

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What is a resource? (Concept)

• May be defined as “a way to achieve a given end”• Resources may be-

1. Tangible – (touchable)2. Intangible

Tangible Resources-(material things) – Ex: Land, Forest, Coal, Machinery

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Dynamic Concept of Resource

• Resource is not static• Resource increases in response to 1. Increased Knowledge-Learning curve, improved efficiency2. Improved Arts-better ways of communication (ex-art of presentation by Power Point)3. Expanding Sciences – Technological improvements- Ex-

Information Technology4. Changing individual wants-Life style5. Social Objectives-Conserving Fossil Fuels, Reducing

Pollution

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Resource as a result of interaction of Nature-Man-Culture (Natural Resources and Human

Resources)• Resources expand and contract in response to

human wants and actions• When nature, mankind and culture interact

the process leads to the creation of resources.• Nature is the basis of all resourcesEx-Coal is found in nature as “neutral stuff”As man discovered more about nature, he

converted this to a resource through ingenuity, skill and hard work.

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Interaction of Nature, Man and Culture

NatureMan

Culture

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Role of man in resource creation (Natural Resources and Human

Resources) • Resource satisfy some wants or needEx- Coal satisfies need for a source of fuel

• Resource is functional and is related to man• Resource becomes neutral stuff when man no

longer needs the resource• Hence man can create or destroy a resource

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Wild Rubber of Congo &

Amazon Basin

Rubber Plantations of Malaysia & Indonesia

Turned into neutral stuffWith the development of

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Culture – created as a result of human resource

• “The sum total of all devices produced by man

– with the aid, advice and consent of nature, to

advise him in the attainment of his objectives”

Zimmerman

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Example-Culture

• Man’s objective-Reduce toxicity and pollution in environment (Man’s Objective)

• Breed varieties resistant to pest and diseases

• Grow these varieties as a trail (Natures consent)

• Introduce on commercial scale

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Cultures role in over coming resistance from nature – Culture, Human Resource and Natural

Resource InteractionResistance : • barren and unproductive

soil

• typhoons, hurricanes, floods,

• poisonous insects, diseases are all natural resistance

Overcoming Resistance:

• Improved agricultural practices-fertilizers, water management

• Crisis management

• Advances in medicine

All these overcome resistance

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Need for resource consciousness

• Resource is the basis of economic prosperity of a nation

• Developed nations have vast resources in the form of :

1. Natural2. Human3. Cultural resources4. A resource conscious person seeks ways to

increase the fund of his resources

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Need For Resource Consciousness• Better and more efficient utilization of resources

results in the expansion of total fund of resourcesA ton of coal today is 1/7 the cost of coal seven years

backThis is due to • Better ways of using coal• Reducing wastage to a minimumMan has always been resource conscious at an

individual level. However when society as a whole becomes conscious by taking care of basic resources, it provides a lasting benefit to society

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Link Between Resources & Trade• Resource is natural where as Trade is a creation of

mankind• Resources may be managed efficiently or

inefficiently by man• The manner in which the resource is managed

results in a country being termed as “resource rich” or “resource poor” The resultant effect is the country being “surplus” or “deficit” in a given resource.

• “Surplus” “Deficit” “Consumption” “Production” result in trade