What Are the Differences in Capital Resource, Human Resource & Natural Resource?

At a very basic level, resources could be anything used in the production of something. There are different kinds of resources, however. If you want to find out the answer to something, your resources could be both books on the subject and a friend who’s an expert on it. In business, resources are the materials used in production. Even businesses that provide a service, rather than a tangible product, use resources to provide that service. Regardless of the type of business, from manufacturing plants to restaurants, businesses generally have three types of resources: Capital resources, human resources and natural resources.

Capital Resources Aid Production

Assets that are man-made, and are used in the production of other items, are called capital resources. Being man-made is what makes capital resources different from natural resources, which occur naturally in the world.

Businesses use their working capital, either funds the company has or loans the company secures, to buy capital resources. These become company assets which are depreciated over time and their value listed on financial reports. Examples of capital resources that a company might have are equipment, tools, supplies and even the facility where production takes place. Different types of businesses have different capital resources, such as:

Bakery – Heavy-duty mixers for large quantities of dough and icing; ovens; commercial baking pans; tools such as spatulas, cookie and biscuit cutters, rolling pins; supplies like flour, sugar, spices, etc; shelving to store baked breads and other homemade food; display cases and display trays for cookies, pies, etc.

Plant nursery – Greenhouses, sheds and other buildings; wooden and metal display shelves; pots, hoses, grow lights, water misters; soils, fertilizers and other garden nutrients; hand wagons for customers to haul plants; seeds and cuttings bought to grow more plants; the land the nursery encompasses.

Computer services company – Desks and chairs for employees; desktop computers and/or laptops for each desk; computer software; copiers, fax machines, paper shredders and other office equipment; phone system and phones; supplies like paper, pens, staplers, paper clips etc.

Human Resources Get Work Done

Human employees use a business’s equipment and supplies to accomplish the business’s goals. Some operate the equipment that makes products; some answer phones and schedule meetings for other employees; some keep track of finances including income and expenses; some manage departments and oversee employees’ work; and top executives analyze the big picture and make decisions that affect the whole company.

Employees must be paid, so the company “buys” their expertise and services according to what the type of business needs. Examples of some human resources a business could have are:

  • Chief Executive Officer (CEO).
  • Chief Financial Officer (CFO).
  • President.
  • Human Resources personnel.
  • Directors.
  • Sales representatives.
  • Typists and receptionists.
  • Accounts payable/receivable clerks or bookkeepers.
  • File clerks.
  • Mail clerks.

The human resources economics definition goes a bit further. This is where the company tries to match the employee’s talents and interests to their job, even if that means moving employees to other jobs within the company. That way, employees are happier, eager to come to work and more productive, which benefits the business’s bottom line, too.

Natural Resources Get Consumed

Natural resources like gas, oil and coal are used up, or depleted, when a business uses them. The trucks that a delivery service owns are capital resources that can be used again and again, but the gas the company uses to operate them is depleted during use.

Businesses can buy these natural resources as they need them, or they can buy the rights to an entire oil or gas reserve. These are accounted for as long-term assets and are recorded at the price the company paid for them. Then they are expensed over time and considered as depletion because they are gone for good; the reserve won’t fill up again.

Examples of natural resources in business are different for each type of business but could be:

  • Gas for fleet of vehicles.
  • Raw gems like diamonds and emeralds for jewelry.
  • Foresting rights for lumber.

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