7400.362 - Family Life Management
School of Family and Consumer Sciences
Instructor: David D. Witt, Ph.D.

Topic 4 - Resources

Resources are central to the management process; they are the means to attain goals and meet demands for individuals, and for families, they provide a lifestyle to meet needs.  Resource theory (first promulgated by Uriel Foa in 1971)analyzes, predicts, and explains the nature, perception, exchange and use of resources. It contributes to the quality of life for several people by helping them be more resourceful about limited/scarce resources.

Resources are what is available to be used, or anything with a real or perceived value put to service for attaining goals. E.g. time, money, energy. Also knowledge, personality, etc. Resourcefulness is the ability (a learned ability, a skill) to recognize and use resources effectively. When resourceful people encounter a problem, they are not defeated by it, but find a way to solve it.

Resourcefulness is taught in many different ways:

  • stumbled onto, or discovered
  • learned from family members and friends
  • provided by community, government, school, social organizations (e.g. Boy Scouts)
  • accessed through work

Resources may be classified in several ways: 

Tangible versus Intangible resources

  • Tangible resources can been touched, seen or appraised – e.g. money, things, jewelry
  • Intangible resources cannot be touched – e.g. confidence, literacy, wisdom, power.

Human versus Material resources :

  • Human Resources are the skills, talents, attributes that people have. These increase through use.
  • The sum total of human resources is Human Capital.
    (A study by Peters and Waterman found that humans tap 4-10% of their full potential)
  • Material Resources include natural phenomena (natural resources like soil, water) and human-made objects (buildings, computers).
  • Resource Stock is the sum of readily available resources an individual possesses.

Resources and Economics
Most decisions in life are affected by economic realities. Economics refers to the production, development and management (also distribution and consumption) of material wealth.

Scarcity is the idea of a shortage or insufficient amount or supply of a resource. Obtaining any scarce resource involves some cost, and this leads to people engaging in economizing behavior and goal setting. Since everyone defines for himself/herself what constitutes scarcity, the richest as well as the poorest person will experience scarcity. Availability is a related concept, and a resource is available or not depending on how scarce or abundant it is. One scarce resource we all understand is time. Schor (“The Overworked American”) says we have about 16.5 hours of leisure time per week, which we often try to carefully spend and allocate. Scarcity forces people to make allocation choices and decisions.

Choice and Opportunity costs
The more scarces (expensive) a resource is, the more likely we have to encounter an Opportunity Cost in order to obtain that resource.  Opportunity Costs are the highest valued alternative that must be sacrificed to satisfy a want or attain a resource. Many household activities include decisions about opportunity costs – seen as tradeoffs.(e.g time being increasingly scarce, many families trade off healthy eating habits in favor of fast food meals and takeouts).

Laws of Supply and Demand
According to the law of Demand, as the price of a resource rises, the quantity demanded falls. As the price falls, the quantity demanded of a resource increases. The Law of Supply is the inverse: As the supply for a resource increases, the price will start to drop, and as the supply goes down, the price goes up. In economic theory, the right price is reached only when supply and demand are equal.

Economic well-being
This is the degree to which individuals and families have economic adequacy and security – degree of protection against economic risks like job loss, illness. How much is enough "stuff" - money, things, possessions? This is more of a cultural and psychological question. Economic well-being is influenced by several things combined, like income, financial assets, human capital, time, management skills, feelings of control, values, etc.

Allocation and Recognition of resources
Mangement is the process of using resources to attain goals through planning and strategy - taking the steps necessary to meet short term, intermediate and long term goals. (Often, resources are allocated more to immediate demands, to the neglect of long term goals). This requires an understanding of ourselves and of the environment in which our resources reside.  Resource recognition involves realizing what skills, talents and materials one possesses.

Regulation of resources
This is partly a political topic. Many conflicts – domestic, as well as international – have risen over the question of how to divide resources and who controls them. Private resources are owned by individuals or small groups (e.g. Private companies, cars, stockpiles), while Public resources are owned by many people – a nation or locality. (Public water works, transportation, rainy day funds).

For example, the conservatives in government are prone to a laissez-faire attitude (government hands-off business), while liberals are more likely to espouse a more active, watchdog approach to guarding resources. Adam Smith's treatise on the economy, often referred to as “Wealth of Nations" has long been debated for its merits, but a more sensible approach is the one we often take - like a swinging pendulum government controls then deregulates in cycles.

Economic resources and employee benefits
Types of Economic Resources:

1. Wealth – measure of what has been accumulated: property, cash, valuables.
2. Income – that which is earned or given to recipient.
3. Employee Benefits – goods and services that form part of the individual’s or family’s resource base, that is given over  basic pay (health benefits, retirement funds, free turkeys). Nine six percent of Americans receive employee benefits from medium-to-large firms.
The five co-existing, interacting, interadtermining forces influencing family management of resources:
  1. Psychological - personal forces, values orientation - shape choices and preferences.
  2. Economic - these regulate the exchange of money, energy, material, services, information, goods
  3. Technological - these generate problem solving behavior - inventions, tools, methods.
  4. Sociocultural - these regulate norms and customs
  5. Political-Legal - these allocate power and provide constraining/protecting laws and regulations.

The Attributes of Resources which may be human (time, skill, energy of people) or physical (material, artifacts, tools, elements, stuff) are also interdependent,sometimes exchangeable,reliant on the user's ability to process information and make decisions andcan sometimes be stored for later use or barter. Resources may also be characterized as having affective, cognitive, and psychomotor attributes:

1. Affective – feelings about resource use, like affection, gratitude
2. Cognitive – knowledge aspects of resource use, influenced by past experience and learning
3. Psychomotor – physical reactions to mental stimuli, readiness

Foa and Foa's Resource Model
This model shows the interdependence of resources, in a systematic and meaningful way. In Foa and Foa’s theory, social interactions and relationships provide a means to obtain needed resources, which differ in terms of how particular people are about getting them. Resources close to each other on circle are more likely to be exchanged. This model has been found to be useful in understanding several relationships, and hardship situations.

Utility is the value, worth, applicability, productiveness or usefulness of a resource.  Utility is in the "eye of the beholder" in that it is learned and subjective - who would you rather be trapped on a desert island with? Someone you find sexy and irresistible or someone who was really good at fishing?  There are four types of utility:

1. time - when the resource is available and for how long
2. place - where the resource can be found (how far away).
3. form - accessibility or usability
4. diminishing utility - the first use is more desired than subsequent uses.
To be useful, a resource must also be accessible. such as a handy ATM that gives us access to our bank accounts. The internet makes information accessible in a way different from libraries. People with good memories and plenty of experience have personal access to their own knowledge.  All this speaks to the interaction between decision making and resources.

Getting information about availability and accessibility of resources, clarifying utility of resources, etc. beforehand avoids some potential problems with decision making. A lot of decisions involve cost-benefit analyses, or probability estimates. However, decision-making almost inevitably uses up time, a valuable resource.

The interaction between Knowledge and Education is something that college students should keenly aware. Knowledge, gained through study or experience, may be our primary resource (Drucker, 1999). Even though much of what is learned educationally must be stored away for later retrieval, it is the long term value of a good education that makes it vital to our survival as a species. Educationally inspired knowledge is very basis of social development. Thus, investing in human capital resources, such as public education always leads to a wide range of continual pay-offs, both for the educated person and for the society in which that person lives. 

This brings up several related and important points we should, at some point discuss. Here in Ohio, as well as in every other state in the country, there are political debates raging in state houses about the unbearable cost of supporting the educational system on the one hand, and its immediate payoff to state coffers.  This is a case in which our immediate ability to pay education negates our future development.

If we were to consider all the educated people we produce, and ask if they are really knowledgeable, the question depends on our definition of knowledge.  Certainly literacy or a college degree alone is not a guarantor of wisdom.  However, putting the degree to use by solving problems, or creating solutions through collaboration with other smart people, is evidence that the payoff of education is evergreen. 

Thus, we should consider our cultural perceptions of resources.  
Culture is everything we can see and know. It is the sum of all the socially transmitted behavior patterns, beliefs, arts, expectations, institutions and all other products of human work and thought characteristics of a group, community or population.  Culture is the domain of anthropology here at the university, but it is much more than a mere scientific element to be studied.  The computer I'm typing on, the language I'm using, the thoughts I'm having, the feelings I have for my subject matter, the energy I'm willing to expend on my teaching - all this is bound up in the culture in which I live --- you too.

Culture has both material (e.g. tools, clothes) and non-material (e.g. customs, language, music and ideas) aspects to it. People of a common culture share many common interests and goals (and beliefs).

The Six Attributes of Culture

1. develops over time
2. supplies boundaries or limits (called “norms”)which affect how we think and act
3. provides a sense of belonging or identity
4. is pervasive and taken largely for granted
5. can be constrictive - inhibiting our behavior
6. can also be expressive and enriching
Cultures and Subcultures
Subcultures are subsystems of a dominant culture, which may have a religious, ethnic, political, racial, social or economic base.
Cultures are transmitted through several channels: parents, schools, community, religious organizations, government, peer group.

Resources, Families and Households

During the last 20 years, the family and households in the U.S. have changed.  Just since 1950 we have seen the massive induction of women into the labor force brought about from a fundamental change in the economy.  Right around this time, as our economy was poised to move from a labor intensive industrially based system to one based on information technology. The economy had previously changed from an agricultural production model pushing families into the cities and factories. By 1950 the changes continued, the factories were beginning to closing down one by one and moving to locations with cheaper labor. While causing severe disruption in the status quo, the change began funneling men and women back into the nations colleges.   With no need for big families, and a huge need for fewer children with more training, families started to shrink in size, economic mobility started to rise - the result being more temporary, single family households, a rise in the number of single parent families, more divorce, and finally an aging population. 

And here we are today living in smaller families, staying in school longer, finding (hopefully) more satisfying imployment, marrying later, having fewer children and having them later.  The economy continues to change, requiring more flexible workers, and all this brings changes in our values and attitudes.  While we might pine away for a simpler time, there never was a time of "good old days"..

This storyline is not without its disappointments.  With these changes, families are finding it very difficult to raise children, and look outside for resources to help them. Today, it does take a village to raise a child, and in many sectors we, as a society, are failing. We do get help from family friendly community and religious organizations, policies, and legislation (e.g the Family and Medical Leave Act, 1993), bu tthese are becoming fewer and farthere apart..

Consumption and resources
To consume means to use, expend or destroy. The US has often been characterized as a consumer society, as are many nations these days. This refers to the productive capacities and the market forces that have made life comfortable for the average person in this society, but at the cost of the environment, and safety of the future of this planet. There is little sensitivity to nature and little realization of the need for conservation, recycling, etc. (much less future proactive action) for the sake of convenience and immediate gratification.

Resource strategy
A strategy implies a well-thought out plan of action, conducting and following through on operations. A successful resource strategy includes what is owned and compares it to what is desired, setting up a plan to achieve it optimally, with least expenditure.

IV. Here is an exercise to think about: For the moment, accept the idea that the USA is a Throwaway Society.
Look at Page 93 in the textbook, Figure 4.5 – compare the US and China with respect to consumption indicators,
or look at the chart below:

Can you make an argument that the U.S. population deserves to use as much as five times its rightful allotment of energy, wood, raw materials and water?  List out some possible reasons why different cultures/nations may have different resource uses, other than simply being underdeveloped and poor. 

If you feel that the U.S. population and larger consumers, such as U.S. manufacturing, could benefit themselves and the world by using less of everything, list out 10 different ways you personally could conserve something in your everyday routine life. For example, bringing your own bags to the grocery store instead of using plastic or paper ones supplied by the store.