Introduction

Strategic decision managers play an important role in the daily operation of an organization. The long term
profitability is the overall goal of every top level managers. In doing so, they make certain moves to attain,
improve and develop more areas of their competitive advantages. In a 21st business landscape, every competing
organizations faced hypercompetition in a global scale. As a result of a fast changing world market, every
organization had to make sure that they apply their resources (tangible and intangible resources) to their
maximum potential. The application of tangible and intangible resources is the foundation of an organization
capabilities and also as well their competitive advantages. This essay then will discuss in depth with real life cases
as examples the differences of tangible resources and intangible resources, why it is important for decision makers
to know the differences between the two categories of resources, which of the two resources is valuable for
creating an organizations capability with three supporting examples and one common ground for tangible and
intangible resources.

Literature on tangible and intangible resources with their differences

Initially, tangible resources are known to be of physical in nature. Tangible resources are assets that can touched,
quantified and observed with four categories such as financial resources, organizational resources, physical
resources and technological resources Financial resources are an organization assets that enables it to generate and
earn cash and assets that enable borrowing capacity (Hanson, Hitt, Ireland and Hoskisson : pg 82). For instance,
Fiji Electricity Authority financial resource include of its dam, tunnels and water conductor as they part of the its
internal operation which generates FEA main source of revenue (Annual report 2015, pg 56). With high revenue,
FEA will also as well experience better borrowing capacity as banks and lenders will provide their funding in
relative to their borrowers level of profitability. The organizational resources deal with formal reporting
structure of an organization (Hanson, Hitt, Ireland and Hoskisson : pg 82). For instance, the formal reporting
structure deals with the flow of an organization internal operation reporting. The different departments of FEA
work in an interconnected way reporting both non-financial data and financial data to top level managers
specifically executive management team. Before executive management team are given such reports the internal
auditing process take place first whereas the independent audit take place before their reports are assessed by
investors and the government (FEA annual report 2015, pgs# 26 & 35). Physical resources is an organizations
location and its property, plants and equipment (Hanson, Hitt, Ireland and Hoskisson : pg 82). As given, FEA
cover a certain places for its power stations that include Wailoa, Monasavu, Vuda and Kinoya. Technological
resources are the techs organizations use in providing effective and efficient product and service (Hanson, Hitt,
Ireland and Hoskisson : pg 82). For instance, FEA is known to apply a variety of techs in providing power to Fiji
people with every second, minutes, hours and days passed. This techs complement, also identified as strategic
assets, each other and sometimes one play a dominant role when there is lack of options for FEA. Specifically this
techs include of hydro power tech, thermal power generation tech, solar hybrids tech, biomass-waste energy
transmission and others to name a few (FEA 2015 annual report : pgs 8 & 9). An organization internal operation
are mostly handled by its tangible assets with contribution of its human resource for a complemented operation
flow.

Secondly, intangible assets are known of their lack of physical features. Intangible assets are an organizations
assets rooted deeply in the firms history and have accumulated over time that are categorized as human resources,
innovation resources and reputational resources (Hanson, Hitt, Ireland and Hoskisson : pgs 81 & 82). Human
resources of an organization focuses on the qualifications, skills, trust and collaborating abilities of an
organizations employees. For instance, Hasmukh Patel (CEO of FEA) brought in his qualification and expertise in
Electrical Engineer into FEA whereas Bobby Naimawi (CFO of FEA) brought in his background and knowledge
on accounting, finance, economics plus with Masters in Business Administration (FEA website : 2017). Innovation
resources include of an organizations ideas, capacity to innovate and scientific capabilities used in order to attain
competitive advantage over it competitors (Hanson, Hitt, Ireland and Hoskisson : pg 82). Since FEA is a monopoly
in providing power here in Fiji hence it will have no need for considering competitors nevertheless its innovative
ideas (which it has implemented and in progress) is the undertaking of its ten years of Power Development Plan
since 2014 (FEA 2015 annual report : pgs 8). This plan is very essential in the long run of FEA as its strategic
assets need further upgrade and replacement for maintaining and improving the power generation capacity of FEA.
Reputational resources is an organizational positive reputation with its stakeholders, customers and consumers
perceptions of product quality, durability and reliability and most of all an organizations brand name (Hanson,
Hitt, Ireland and Hoskisson : pg 82). The reputation of FEA of being a monopoly in Fiji has strong cornerstones as
with it has managed to effectively serve Fiji people as it has reported a striking 92% satisfaction for its domestic
customers and 90% for its commercial customers (FEA 2015 annual report : pg 15). Hence the implication of the
importance of is critical as a basis of an organization foundation of creating its capabilities.

Additionally another difference between an organization tangible and intangible resources deals with its leverage
feature. Leverage in this sense meant that a particular resource can be used simultaneously within different
occasions to further create value. Tangible resource cannot be leveraged as one physical resource can only serve
one purpose at a time (Hanson, Hitt, Ireland and Hoskisson : pg 82). if FEA focuses, for instance, it thermal power
generation in providing power supply to suva, it thermal power cannot provide power to Lautoka at the same time.
Intangible resource, on the other hand, can be leveraged or can serve multiple purposes at a time (Hanson, Hitt,
Ireland and Hoskisson : pg 83). For instance, FEAs top managers can share their expertise to their supportive
managers which in fact further increases supportive managers expertise and can use it to further improve their
work effectiveness and efficiency whereas top managers still use such knowledge accordingly. Leverage is
another differentiating factor between tangible and intangible goods that is used to further create value.
The importance for decision makers to understand these differences between tangible and intangible
resources
Furthermore it is crucial for strategic decisions managers to understand the differences between tangible and
intangible resources due to the difficulty of identifying an organization resources. If strategic decision managers
happen to lack awareness of the distinctions between tangible and intangible resources, decisions made will be
mostly likely to sterile. For instance, during 1970s a newly tomography computer scanner was innovated by
Godfrey Hounsfield with a position of senior research engineer at Electrical and Musical Industries. Due to its lack
of capability to exploit their newly innovation at their targeted market, General Electric as being a imitator takes
dominion in the supplying and marketing of it after a span of eight years initial innovation (Hill & Jones : pg 113).
Another similar case is that of Exxon Oil Company. What occurs in this company is that it focuses on areas that it
is not its main capabilities such as in investing in office automation equipment instead of investing more on its
possible capabilities areas such as oil extraction, refining and exploration (Hill & Jones : pg 115). Resources are
part of an organization internal environment and the increasing number of rapid changes occurred within a local
and global market further complicates strategic decisions makings. With a clear distinctions between the tangible
and intangible goods, strategic decision managers will most likely to make decisions more align with their internal
organizations environment and goals. For instance, during the 1980s Walt Disney Company was in a financial
crisis. After Michael Eisner took the role of CEO, things changed for the better. What Eisner did was that he put
the whole organization focus on fully exploiting its existing resources with its capabilities such as in-house-film-
making skills, film library, brand name and others to the fullest. Whereas in the same time focuses on building
additional resources and capabilities it could further utilize to further gain and maintain its long term competitive
advantage (Hill & Jones : pgs 114 & 115). Another similar case is that of Honda Manufacturing Company. What
this organization did is that it fully utilize and harness on its distinctive competency areas such as the designing
and manufacturing of high-powered lightweight engines for motorcycles, cars, lawn mowers and others (Hill &
Jones : pg 115). The sole objective of strategic decision makers is to make decisions that must earn and maintain
their organizations competitive advantage whereas competitive advantage is derived within an organization via
the careful understanding and persistent improvement of its tangible and intangible resources. The proper
application and never ending upgrade of an organization resources will then lead to the awareness of its
capabilities whereas capabilities often leads to an organizations core and distinctive competencies that
eventually leads to the attainment of competitive advantage.

Intangible resources, instead of tangible resources, being high value in creating an organization capabilities
Additionally, capabilities is a way in which an organization coordinates both its tangible and intangible resources
in a productive way, generally it is an organizational control systems and reporting structure dealing with decision
making (Hill & Jones : pg 113).It is the integrated application of an organizations resources and capabilities that
often leads to its distinctive competencies . Intangible resources are more valuable in comparison to tangible
resources in creating capabilities due to many reasons. The first reason is that reputational resources have a critical
impact toward a targeted market. First off a brand name cannot be copied due to commercial laws and regulations.
A very well-known brand have an impact toward a targeted market as each brand will be connoted with quality,
low price, high value, excellent customer services and others atheistic features. For instance, Harley-Davidson
have a reputation of producing and supplying quality motorcycles with unique and different designs (Hanson, Hitt,
Ireland and Hoskisson : pg 83). Thus any advertising made with Harley-Davidson brand will connotes their
products and services with it established reputation. The second reason is that it is difficult to be imitated and
substitute for by competing firms. As given, tangible resources are very easy to be imitated by competitors due to
it visibility factor. A competitive advantage to be maintained it has to be hard to be copied. Intangible resources on
the other hand are not visible with very little public information about it make it to have a high barrier of imitation
to competitors. The higher the barrier is, the longer the time is a competitor takes to copy a particular organization
operations competitive advantage. This will make it too late for a imitating competitor to enter an already
occupied market due to the established reputation an organization may had with its existing customers and
consumers (Hill & Jones : pg 116). Additionally it is very hard to be imitated due to the fact that an organizations
capability is a product of an interaction between an organization different departments with many employees.
Hiring only a dozen employees from an organization will be deemed not enough to properly copy a targeted
organization capability otherwise hire the whole organization (Hill & Jones : pg 118). The third reason is that
tangible resources alone are useless without the knowledge of employees (intangible resources). As given in a
previous example regarding newly tomography computer scanner initially owned by Electrical and Musical
Industries that eventually loss it market share in the scanning computer market due to a lack of proper marketing
skills. Hence, intangible resources are more valuable in developing an organizations capabilities.

An implied similarity between tangible and intangible resources

Last but not the least, there are no obvious similarities between tangible and intangible resources due to their
nature. However, one common ground from which tangible and intangible seems to agree on is that of
technological resources. Technological resources include of manufacturing process, manufacturing technology,
patents and copyrights, maturity and volatility, complexity and differentiation (Certo & Peter : pg 98).
Technological resources are categorized as tangible resources however the definition of its factors are mostly
intangible in nature such as manufacturing process and technology to name a few. This occurs as evidently
organizations use it tangible resources to produce and deliver their goods and/or services to their targeted market
while mostly all processes are intangible in nature. In this way technological resources are categorized as tangible
resources and at the same time have unique unique intangible features (Hanson, Hitt, Ireland and Hoskisson : pg
83). Hence this one particular similarity factor between tangible resources and intangible resource that is
technological resources.
Conclusion
In conclusion, intangible resources are the basis of an organization capabilities and competitive advantage with
proper usage of tangible resources. Strategic decision makers should be aware of the distinctive features of
tangible resources and intangible resources for making use of their organization control system and its reporting
system. With proper distinctions, top level managers can make proper decisions that further maximize, improve
and further create their existing and pursued competitive advantages. In this fast changing pace of 21st century
market, this understanding is crucial for every organization in order to maintain their competitive edge within their
targeted market. As been further explained, many organizations have succeed in focusing in their distinctive
capabilities areas where as many has failed terribly due the misunderstanding and misusing their distinctive
capabilities areas.
Bibliography

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Fiji Electricity Authority Annual Report, 2015. (FEA) Accessed 6th july, 2017. http://www.fea.com.fj/wp-
content/uploads/2016/10/2015-Annual-Report.pdf
Fiji Electricity Authority, 2015, Management Team, Accessed 6th July, 2017. http://www.fea.com.fj/about-
us/company-information/our-management-team/
Hanson. D, Hitt. M, Ireland. R, Hoskisson, R. 2017, Strategic Management: Competitiveness &
Globalisation 6th Asia-Pacific Edition, Austrialia Pty Limited, Australia
Hill. C, Jones. G, 1995, Strategic Management : An integrated approach 3rd Edition, Houghton Mifflin
Company, U.S.A
Samy, S. 2013, MG309 Course Book Strategic Management, University of the South Pacific, Fiji.