9 M’s Resource Audit Checklist

An organisation’s approach to strategy will always depend on the circumstances.

Who are the organisation’s competitors? There will be existing competitors, and outsiders who might threaten to compete in future.

And who are the organisation’s customers? There will be existing customers, and larger groups that the organisation wants to target.

By understanding the external environment, an organisation will then be able to develop a strategy to achieve continued success by taking advantage of opportunities and avoiding threats.

But while understanding the business situation will obviously be very important for ongoing success, an organisation’s ability to compete will ultimately be determined by the resources and capabilities that the organisation has available to it.

In order to find out what these resources and capabilities might be, an organisation will want to carry out a systematic review; a process that might be referred to as a ‘resource audit’.

The thing about auditing is that it tends to be quite a formal process, and you want to make sure that you don’t miss anything. And so, it will be a good idea to use a checklist.

While by no means perfect, the 9 M’s Resource Audit Checklist might prove useful for the task.

The checklist categorises an organisation’s resources into nine categories; each of which, as you might of guessed, starts with the letter ‘M’:

  1. Materials: Who are the organisation’s suppliers? Does the organisation have good working relationships with them? Are they reliable and responsive? Do they provide quality inputs? How much do they cost? Do they have spare capacity? Where are they located?
  2. Machinery: What kind of plant, equipment and other tangible assets are used by the organisation to turn raw materials into finished products? What is the age, condition and utilisation rate of these asset? Are they technologically up to date? What is the likely replacement cost? What is the quality of finished products?
  3. Make-up: What is the culture and structure of the organisation? What intangible assets does the organisation possess, e.g. patents, trade marks, brands, and good will?
  4. Management: What are the skills, experience level and vision of senior management? What is the management structure and prospects for career progression? Are management loyal to the organisation, and are there programs in place to align management incentives with the long-term interests of the organisation?
  5. Management information: Does management have the ability to generate and share relevant and timely information within the organisation? Does management have the ability to easily collect and analyse information from within the organisation to support strategic decision making?
  6. Markets: What customer segments and regions does the organisation serve? What products are sold in each market? What is the market position of the organisation? What is the position and life cycle of its products?
  7. Men and women: How many staff does the organisation employ? How does the organisation attract, select and recruit new candidates? What skills do they have, and what training programs are in place to support their development? How are staff compensated, and what are wage costs as a proportion of total costs? What is the level of staff morale and labour turnover?
  8. Methods: How are activities carried out? Are they capital intensive or labour intensive? Which activities are performed in-house, and which activities are outsourced? How does the organisation handle its supply chain process, e.g. push method, pull method?
  9. Money: What is the organisation’s cash position? What is the credit period? What is the turnover period? What kind of short-term and long-term financing does the organisation have access to? What is the organisation’s debt-to-asset ratio? What are its investment plans, and how will they be funded?

Subscribe to our mailing list