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Resource Allocation Report

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Updated: Oct 11th, 2019


The rapid globalisation rate facing the world has led to increased competition in most of the resources used in the running of business organisations.

It is because of this that the subject of resource allocation is of great importance to all business enterprises. The limitation in the supply of most resources while their demand is tremendously increasing also calls for effective allocation of the scarce resources.

Resource allocation therefore entails the apportionment of the available resources to effectively run the enterprise or project to its completion without failure. Allocation of resources could also mean sharing the available resources among various projects the organizations could be undertaking simultaneously.

Some of the main resources that ought to be effectively allocated include; human resources, financial resources, economic resources among others (Meredith and Mantel, 2002, p.104). This paper is therefore an analysis of various allocation techniques and the importance of allocating resources in the organizations.

Importance of Resource Allocation

Allocating resources in a company is very essential as the company is usually obliged to make the most out of the least resources it is endowed with. The duty of allocating resources is usually left to the management of the organization or rather the project managers in the case of a project. There are therefore many benefits that arise as a result of effective resource allocation in organization.

  • Achievement of objectives– When the resources of an organization are effectively allocated, it ensures that the organizational objectives and goals are achieved. This is majorly because the key factors will be considered during the allocation hence making sure that the required projects are done in the right way thus achieving the goals set by the organisation. This can also be attributed to the role of budgeting in the organisation.
  • Cost effectiveness– Through resource allocation the organization tries to be cost effective in that the least resources are used to achieve maximum output. This has the benefit of making the organization save so much on the available resources. For example, the organization could opt to use high percentage of machinery labour as opposed to human labour to save on the cost of labour as well as time.
  • Completion of projects- Some of the projects of an organisation are long-term taking up to 20 years for completion. If resources are not efficiently allocated in such projects, they could end up not being complete due to insufficient resources during progress (Meredith and Mantel, 2002, p.108). Thus, the project managers have to allocate the resources at hand to make sure that the available ones will be adequate to complete the project within the stipulated time.
  • Best combination- Through resource the best combination is achieved. This is because the management will try out to use the allocation methods to match up the best combination of resources that can be used in the project or organization. This will therefore ensure that the best output is achieved.
  • Ranking of resources- It can be agreed that not all resources of an organization will be required in all instances. At times, specific resources will be of need as compared to others. This therefore leads to the ranking of these resources in the order of their importance. Ranking will therefore be achieved during allocation whereby those that are of urgent need or higher priority are made top of the list down to the less important. This becomes essential especially in the long-term projects which may have different requirements depending on the stage of completion of the project.

Resource Allocation Techniques

Due to the fact that resource allocation is an important subject in the running of organisations it calls for effective methods to efficiently allocate the resources (Norton and Kelly, 1997, p.124). Some of these techniques include the following:

  • Centralized resource allocation entails the allocation being done by a single department or individual. Therefore the other departments request for the resources they require which are then allocated to them. This method is very simple to undertake although it becomes difficult with increasing size of the organizations.
  • In Hierarchical resource allocation the process takes two phases whereby the first allocator collects the requests and assesses them before giving the second allocator to have his or her opinion then the allocations are made. The process takes some time although the decisions are shared hence coming up with the best alternative.
  • Random access is another method of allocating resources where the resources are allocated randomly to the different sectors of the organization or project. This method comes about when the entities cannot be synchronized yet there are multiple resources to be shared across.
  • Bi- Directional Resource Allocation involves two allocators who independently allocate the resources to the project or organizational sectors. This method is meant to avoid allocating similar resources to different entities. However, the difference is in the long-run resolved through fixed arbitration algorithm of the resources which is a mathematical technique of allocating resources.


From the above discussion, it can be seen that resource allocation plays a major role in the success of any project or organization (Norton and Kelly, 1997, p.124).

It is therefore important that business enterprises practice effective resources allocation if at all they want to match the global competition. Given the different allocation techniques it is upon the organization to select the best alternative depending on its size and available resources.

Reference List

Meredith, J. and Mantel, S. (2002). Project Management: A Managerial Approach, 17th edition.

Norton, S and Kelly, L. (1997). Resource Allocation: Managing money and people. Eye on Education. Print.

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