Operating systems manage hardware resources through a function called resource allocation. They act as an intermediary between software applications and the hardware components of a computer, ensuring efficient utilization of resources such as CPU, memory, and storage. The operating system employs various strategies, such as multitasking and load balancing, to prioritize processes and allocate resources based on demand. Additionally, it handles device management and requests from applications, ensuring that the hardware operates seamlessly and that users experience smooth performance across different applications and tasks.