Resource Allocation: Factors, Strategies And Mistakes

Significant Factor in Resource Allocation and Business objectives

The success of a project or any initiative relies significantly on the steps and strategies in place to allocate the available resources. Resource allocation is the responsibility of leaders in a setup; it entails assigning competent people some specific tasks necessary to complete a project (Osei, 2020). When allocating duties to individuals, a leader must ensure that they give the right tools and guidelines for the task ahead. The most significant factor when allocating resources is cost-effectiveness. When resources are allocated cost-effectively, it will ensure that the goals and objectives of the business are achieved; the resources that are to be distributed will also be used without any misappropriation. Other benefits of cost-effectiveness in resource allocation include financial security and sustainable operations.

To ensure that the goals and objectives are achieved, cost-effectiveness should command the relationship between the business objectives and the resources that are to be allocated. Adhering to the cost-effectiveness in the company will see the resources allocated being used to bring the intended change in the organization. When it comes to the organization’s finances, cost-effectiveness will ensure that the most viable approaches are used to allocate resources (Jakovljevic et al., 2020). When resources are allocated effectively, it will encourage the spirit of savings, and the cash flow in the organization will be protected.

Cost-effectiveness during the process of resource allocation will help in enhancing sustainable operations. Problems that emerge from the environment society will be addressed effectively when resources are allocated cost-effectively. One way to achieve sustainable development is by ensuring that the plights of those who live around the company premises are addressed (Phelps & Madhavan, 2018). By doing so, they will feel that the organization is caring for them, and they will be part of it and support its objectives and goals.

Mistakes in resource allocation and how to address the problems

Business leaders often make some mistakes during resource allocation, including wrong selection and assigning of resources, planning with 100% capacity; some leaders disregard the project’s dependencies and leave the project team in the dark. When selecting a criterion to allocate resources, leaders should be careful while at it since it has caused many problems as far as some projects are concerned (Rego et al., 2019). After a thorough evaluation of the events that are likely to follow and not from the leader’s perspective, resource allocation should be done after a thorough evaluation of the events that are likely to follow.

Another notable mistake made by business leaders is to plan with 100% time of the employees. This could cause serious problems, and the project’s intended objectives may not be achieved. No human is capable of working the entire day without a break; leaders should therefore ensure that for productivity, they allocate good time for the employees (Pinha & Ahluwalia, 2018).

The whole team that intends to make a project successful should always be notified of the developments of the project and the steps to be taken. If not done, they will not feel part of the project and might work with little or no motivation.

To address the mistakes effectively, a leader should have a deeper understanding of the employees and assign them a role equal to their ability. When allocating time for a project, it is recommended that a leader assumes that the employees can only be produced up to 80% of the total working hours in a week (Maritan & Lee, 2017). Therefore, a project that is to take a week should therefore be given considerably more time than the employees’ working hours in a week. Involving all stakeholders at the project’s onset is key to achieving success in any project that a leader is to spearhead.


Jakovljevic, M., Matter-Walstra, K., Sugahara, T., Sharma, T., Reshetnikov, V., & Merrick, J. et al. (2020). Cost-effectiveness and resource allocation (CERA) 18 years of evolution: maturity of adulthood and promise beyond tomorrow. Cost Effectiveness and Resource Allocation, 18(1), 1-6.

Maritan, C., & Lee, G. (2017). Resource allocation and strategy. Journal of Management, 43(8), 2411-2420.

Osei, E. (2020). Activity based costing and its effectiveness to management resource allocation in a service organization. Journal of Business Cases and Applications, 26(1), 1-8.

Phelps, C., & Madhavan, G. (2018). Resource allocation in decision support frameworks. Cost Effectiveness and Resource Allocation, 16(S1), 86-91.

Pinha, D., & Ahluwalia, R. (2018). Flexible resource management and its effect on project cost and duration. Journal of Industrial Engineering International, 15(1), 119-133.

Rego, A., Owens, B., Yam, K. C., Bluhm, D., Cunha, M. P. E., Silard, A., & Liu, W. (2019). Leader humility and team performance: Exploring the mediating mechanisms of team PsyCap and task allocation effectiveness. Journal of Management, 45(3), 1009-1033.