Chap 004

Chapter 04 - Recognizing a Firm's Intellectual Assets: Assets: Moving beyon a Firm's !angible !angible Resources

Chapter 04 Recognizing a Firm's Intellectual Assets: Moving beyon a Firm's F irm's tangible Resources Ans"er #ey

True / False Questions

$% (p. 124-125) Accoring to the te&t (or most o( the t"entieth century managerial e((orts "ere irecte more to"ar the e((icient allocation o( labor an capital - the t"o traitional (actors o( prouction% TRUE For most o( the )0 th century managers (ocuse on tangible resources such as lan e*uipment an money as "ell as intangibles such as brans image an customer loyalty% +((orts "ere irecte more to"ar the e((icient allocation o( labor an capital - the t"o traitional (actors o( prouction%

AACSB: Analytic Blooms: Understand Learning !"ecti#e: $4-$1 %&y t&e t&e management o' noledge pro'essionals pro'essionals and noledge itsel' are so critical in today*s organi+ations. organi+ations. Le#el o' ,i''iclty: 2 edim /opic: /&e Central 0ole o' noledge in /oday*s conomy

)% (p. 125) !he importance o( human capital has ecrease in recent years% For this reason many (irms have place greater attention on attracting but not on eveloping or retaining talent% FALSE In the ,no"lege economy "ealth is increasingly create by e((ective management o( ,no"lege "or,ers instea o( physical an (inancial assets% !he gro"ing importance o( ,no"lege couple "ith the move by labor mar,ets to re"ar ,no"lege "or, tells us that investing in a company is in essence buying a set o( talents capabilities s,ills an ieas intellectual capital. not physical an (inancial resources%


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/% (p. 125) !he more reliance a (irm has on intellectual capital the closer its boo, v alue "ill be to its mar,et value% FALSE !he gap bet"een a (irm's mar,et value an boo, value is (ar greater (or ,no"lege-intensive corporations than (or (irms "ith strategies base primarily on tangible assets% +&hibit 4%$ sho"s the ratio o( mar,et-to-boo, value (or some "ell-,no"n co mpanies%


4% (p. 123) !he i((erence bet"een the mar,et value an boo, value o( a (irm is its social capital% FALSE ocial capital is the net"or, o( relationships that iniviuals have throughout the organization%

AACSB: Analytic Blooms: 0emem!er Learning !"ecti#e: $4-$1 %&y t&e t&e management o' noledge pro'essionals pro'essionals and noledge itsel' are so critical in today*s organi+ations. organi+ations. Le#el o' ,i''iclty: 1 asy /opic: /&e Central 0ole o' noledge in /oday*s conomy

1% (p. 125) In toay's economy reliance on the three traitional (inancial statements: income statement balance sheet an statement o( ca sh (lo" (lo" has increase% FALSE In $23 the boo, value (or 5 companies "as 21 percent o( mar,et value% 6o"ever mar,et values an boo, boo , values have iverge signi(icantly% signi(icantly% 7ithin )0 years the 89 inustrials "ere on average traing at )%) times boo, value% Robert Robe rt A% A% 6o"ell an e&pert on the changing role o( (inance an accounting muses that !he big three (inancial statements are about as use(ul as an 0-year-ol ;os Angeles roa map%


4-)


/% (p. 125) !he more reliance a (irm has on intellectual capital the closer its boo, v alue "ill be to its mar,et value% FALSE !he gap bet"een a (irm's mar,et value an boo, value is (ar greater (or ,no"lege-intensive corporations than (or (irms "ith strategies base primarily on tangible assets% +&hibit 4%$ sho"s the ratio o( mar,et-to-boo, value (or some "ell-,no"n co mpanies%


4% (p. 123) !he i((erence bet"een the mar,et value an boo, value o( a (irm is its social capital% FALSE ocial capital is the net"or, o( relationships that iniviuals have throughout the organization%

AACSB: Analytic Blooms: 0emem!er Learning !"ecti#e: $4-$1 %&y t&e t&e management o' noledge pro'essionals pro'essionals and noledge itsel' are so critical in today*s organi+ations. organi+ations. Le#el o' ,i''iclty: 1 asy /opic: /&e Central 0ole o' noledge in /oday*s conomy

1% (p. 125) In toay's economy reliance on the three traitional (inancial statements: income statement balance sheet an statement o( ca sh (lo" (lo" has increase% FALSE In $23 the boo, value (or 5 companies "as 21 percent o( mar,et value% 6o"ever mar,et values an boo, boo , values have iverge signi(icantly% signi(icantly% 7ithin )0 years the 89 inustrials "ere on average traing at )%) times boo, value% Robert Robe rt A% A% 6o"ell an e&pert on the changing role o( (inance an accounting muses that !he big three (inancial statements are about as use(ul as an 0-year-ol ;os Angeles roa map%


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<% (p. 123) Firms such as =racle >oogle an >enentech "ill ten to have a higher ratio o( mar,et value to boo, value than inustrial companies such as International 9aper an ?ucor teel% TRUE As sho"n in +&hibit 4%$ (irms such as Apple >oogle Microso(t an =racle have very high mar,et value to boo, value ratios because o( their high investment in ,no"lege resources an technological e&pertise% In contrast (irms in more traitional inustry sectors such as International 9aper ?ucor an outh"est Airlines have relatively lo" mar,et to boo, ratios%


3% (p. 12) Creation o( ne" ,no"lege typically involves the continual interaction o( e&plicit an tacit ,no"lege% TRUE ?e" ,no"lege is constantly create through the continual interaction o( e&plicit ,no"lege ,no"lege that is coi(ie ocumente easily reprouce  an "iely istribute such as engineering ra"ings so(t"are coe an patents. an tacit ,no"lege,no"lege that is in the mins o( employees an is base on their e&periences an bac,grouns.%


% (p. 12) #no"lege "or,ers are more loyal to their companies than traitional "or,ers% FALSE #no"lege "or,ers place pro(essional evelopment an personal enrichment (inancial an other"ise. above company c ompany loyalty%

AACSB: Analytic Blooms: Understand Learning !"ecti#e: $4-$2 /&e importance importance o' recogni+ing recogni+ing t&e interdependence o' o' attracting de#eloping and retaining retaining &man capital. Le#el o' ,i''iclty: 2 edim /opic: 6man Capital: /&e 7ondation o' 8ntellectal Capital

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Chapter 04 - Recognizing a Firm's Intellectual Assets: Moving beyon a Firm's !angible Resources

2% (p. 129) !echnical s,ills are a necessary an su((icient conition (or hiring an employee% FALSE Firms can ienti(y top per(ormers by (ocusing on ,ey employee min-sets attitues social s,ills an general orientations% I( they get these elements right the tas,-speci(ic s,ills can be learne *uic,ly% !his oes not imply that tas,-speci(ic s,ills are unimportant@ rather it suggests that the re*uisite s,ill sets must be vie"e as a necessary but not su((icient conition%

AACSB: Analytic Blooms: Understand Learning !"ecti#e: $4-$2 /&e importance o' recogni+ing t&e interdependence o' attracting de#eloping and retaining &man capital. Le#el o' ,i''iclty: 2 edim /opic: 6man Capital: /&e 7ondation o' 8ntellectal Capital

$0% (p. 129) =ne o( the most important elements in a goo employee is his or her attitue% Firms shoul (ollo" the aage hire (or attitue train (or s,ill% TRUE Firms can ienti(y top per(ormers by (ocusing on ,ey employee min-sets attitues social s,ills an general orientations% I( they get these elements right the tas,-speci(ic s,ills can be learne *uic,ly% !his oes not imply that tas,-speci(ic s,ills are unimportant@ rather it suggests that the re*uisite s,ill sets must be vie"e as a necessary but not su((icient conition%


4-4


$$% (p. 1$) Companies have (oun that re(errals (rom their o"n employees are generally an ine((ective approach to recruiting top talent% FALSE Companies li,e >+ Meical ystems have (oun that current employees are the best source (or ne" ones% 7hen someone re(ers a (ormer colleague or (rien (or a ob his or her creibility is on the line% +mployees are care(ul recommening people unless they are reasonably con(ient they are goo caniates%


$)% (p. 123) Many leaing companies loo, (or creativity an (le&ibility in problem solving uring the intervie" process% !his helps a (irm assess a potential employee's social capital% FALSE 7hile many companies o assess creativity an (le&ibility in the intervie" process this oes not relate to social capital "hich is the net"or, o( relationships that iniviuals have throughout the organization%

AACSB: Analytic Blooms: Understand Learning !"ecti#e: $4-$1 %&y t&e management o' noledge pro'essionals and noledge itsel' are so critical in today*s organi+ations. Le#el o' ,i''iclty: 2 edim /opic: 6man Capital: /&e 7ondation o' 8ntellectal Capital

4-1


$/% (p. 1) In most e((ective evaluation an re"ar systems employees only receive evaluation an (eebac, (rom their immeiate supervisor% FALSE As organizations continue to push responsibility o"n"ar traitional top-o"n appraisal systems become insu((icient% !o aress the limitations o( the traitional approach many organizations use /<0-egree evaluation an (eebac, systems% 6ere superiors irect reports colleagues an even internal an e&ternal customers rate a person's per(ormance%


$4% (p. 1) /<0-egree evaluation an (eebac, systems aress many o( the limitations o( traitional approaches o( evaluating human capital% TRUE !o aress the limitations o( the traitional approach many organizations use /<0-egree evaluation an (eebac, systems% 6ere superiors irect reports colleagues an even internal an e&ternal customers rate a person's per(ormance% !he /<0-egree (eebac, system complements team"or, employee involvement an organizational (lattening%


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$1% (p. 1) /<0-egree evaluation systems are not use(ul ue to the nee to integrate large amounts o( (eebac,% FALSE !he /<0-egree (eebac, system complements team"or, employee involvement an organizational (lattening% As organizations continue to push responsibility o"n"ar traitional top-o"n appraisal systems become insu((icient%


$<% (p. 1) !he most e((ective metho o( improving a (irm's retention o( top talent is to intensi(y its hiring e((orts% FALSE teppe-up recruiting is a poor substitute (or "ea, retention% !oay's leaers can either provie the "or, environment an incentives to ,eep prouctive employees an management (rom "anting to bail out or they can use legal means such as employment contracts an noncompete clauses%


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$3% (p. 15) An internal labor mar,et to increase an employee's mobility "ithin a (irm. is one means o( increasing employee retention% TRUE =ne "ay (irms ,eep highly mobile employees motivate an challenge is through opportunities that lo"er barriers to an employee's mobility "ithin a company% For e&le hell =il Company has create an open sourcing moel (or talent% Bobs are liste on hell's intranet an "ith a t"o-month notice employees can go to "or, on anything that interests them%


$% (p. 15) !he te&t suggests that talente pro(essionals are typically most concerne about (inancial re"ars% Money is the top reason "hy such employees ta,e an leave obs% FALSE 9aying people more is selom the most important (actor in attracting an retaining human capital% Most surveys sho" that money is not the most important reason "hy people ta,e or leave obs an that money in some surveys is not even in the top $0%


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$2% (p. 13) 7or,(orces "hich re(lect emographic changes "ill become more homogeneous or less varie. over the ne&t (e" ecaes "ith regar to gener race ethnicity an nationality% FALSE emographic trens an accelerating globalization o( business ma,e management o( cultural i((erences a critical issue% 7or,(orces "hich re(lect emographic changes in the overall population "ill be increasingly heterogeneous along imensions such as gener race ethnicity an nationality%


)0% (p. 123) ocial capital is base on the net"or, o( relationships "ithin a (irm not in the s,ills an abilities o( an iniviual employee% TRUE ocial capital evelopment the (rienships an "or,ing relationships among talente iniviuals. gains importance "hen ,ey players are (ree agents because it helps tie ,no"lege "or,ers to a given (irm%

AACSB: Analytic Blooms: 0emem!er Learning !"ecti#e: $4-$1 %&y t&e management o' noledge pro'essionals and noledge itsel' are so critical in today*s organi+ations. Le#el o' ,i''iclty: 1 asy /opic: /&e ;ital 0ole o' Social Capital

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)$% (p. 1) ocial capital is (oun in the ,no"lege s,ills an abilities o( iniviual employees% FALSE ocial capital evelopment the (rienships an "or,ing relationships among talente iniviuals. gains importance "hen ,ey players are (ree agents because it helps tie ,no"lege "or,ers to a given (irm%

AACSB: Analytic Blooms: 0emem!er Learning !"ecti#e: $4-$ /&e ey role o' social capital in le#eraging &man capital it&in and across t&e 'irm. Le#el o' ,i''iclty: 1 asy /opic: /&e ;ital 0ole o' Social Capital

))% (p. 1) eveloping social capital is ris,y (or an organization because social capital is speci(ic to iniviuals an remains "ith the employee i( he or she leaves the organization% FALSE ocial capital evelopment the (rienships an "or,ing relationships among talente iniviuals. gains importance "hen ,ey players are (ree agents because it helps tie ,no"lege "or,ers to a given (irm%

AACSB: Analytic Blooms: Understand Learning !"ecti#e: $4-$ /&e ey role o' social capital in le#eraging &man capital it&in and across t&e 'irm. Le#el o' ,i''iclty: 2 edim /opic: /&e ;ital 0ole o' Social Capital

)/% (p. 1<) ocial net"or, analysis can be use to help ienti(y groups or clusters o( iniviuals that comprise the net"or, iniviuals "ho lin, the clusters an other net"or, members% TRUE ocial net"or, analysis epicts the pattern o( interactions among iniviuals an helps to iagnose e((ective an ine((ective patterns% It helps ienti(y groups or clusters o( iniviuals that comprise the net"or, iniviuals "ho lin, the clusters an other net"or, members% It helps iagnose communication patterns an conse*uently communication e((ectiveness%

AACSB: Analytic Blooms: 0emem!er Learning !"ecti#e: $4-$4 /&e importance o' social netors in noledge management and in promoting career sccess. Le#el o' ,i''iclty: 1 asy /opic: /&e ;ital 0ole o' Social Capital

4-$0


)4% (p. 1<) eveloping an protecting social capital re*uires inepenenceDthat is iniviuals must spen most o( their time "or,ing iniviually% FALSE eveloping social capital re*uires interepenence among group members% ocial capital eroes "hen people in the net"or, become inepenent% An increase interactions bet"een members ai in the evelopment an maintenance o( mutual obligations in a social net"or,%


)1% (p. 19) In social net"or,s in briging relationships one member is central to the communication (lo"s in a group% FALSE In closure relationships one member is central to the communication (lo"s in a group% In briging relationships one person briges or brings together groups that "oul have been other"ise unconnecte% Re(er to +&hibit 4%<

AACSB: Analytic Blooms: Understand Learning !"ecti#e: $4-$4 /&e importance o' social netors in noledge management and in promoting career sccess. Le#el o' ,i''iclty: 2 edim /opic: /&e ;ital 0ole o' Social Capital

)<% (p. 14$) Closure in contrast to briging relationships stresses the importance o( ties connecting heterogeneous people% FALSE Eriging relationships in contrast to closure stresses the importance o( ties connecting people% +mployees "ho brige isconnecte people ten to receive timely iverse in(ormation because o( their access to a "ie range o( heterogeneous in(ormation (lo"s%


4-$$


)3% (p. 142) From an iniviual's perspective social net"or,s eliver three uni*ue avantages: private in(ormation access to iverse s,ill sets an po"er% TRUE +((ective social net"or,s provie many avantages (or the (irm% !hey can play a ,ey role in an iniviual's career avancement an success% =ne's social net"or, potentially can provie three uni*ue avantages: private in(ormation access to iverse s,ill sets an po"er%


)% (p. 14) =ne potential o"nsie o( builing social ca pital in an organization is groupthin,% !his means everyone in the group thin,s on his or her o"n an comes up "ith ne" ieas% FALSE ome (irms have been aversely a((ecte by very high levels o( social capital because it may bree groupthin, a tenency not to *uestion share belie(s% In e((ect too many "arm an (uzzy (eelings among group members prevent people (rom rigorously challenging each other%


)2% (p. 145) !he role o( technology in the recruitment o( human capital has lo"ere iniviuals' reliance on the use o( social net"or,s% FALSE !echnology can be use to leverage human capital an ,no"lege "ithin organizations as "ell as "ith customers an suppliers beyon their bounaries but social net"or,s are still important (or sharing in(ormation%


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/0% (p. 145) !he use o( e-mail can be istracting to employees% ome (irms limit the time that employees spen using e-mail% TRUE +-mail is an e((ective means o( communicating a "ie variety o( in(ormation% It is *uic, easy an almost costless% =( course it can become a problem "hen employees use it e&tensively (or personal reasons% 9E 7orl"ie Ful(illment ervices in Alpharetta >eorgia has launche no e-mail Friay%

AACSB: Analytic Blooms: Understand Learning !"ecti#e: $4-$5 /&e #ital role o' tec&nology in le#eraging noledge and &man capital. Le#el o' ,i''iclty: 2 edim /opic: Using /ec&nology to Le#erage 6man Capital and noledge

/$% (p. 14) ince electronic teams e-teams. selom meet (ace-to-(ace it is ?=! important (or them to be concerne "ith ho" to combine iniviual contributions e((ectively% FALSE uccess(ul action by both traitional teams an e-teams re*uires that e-team leaers an ,ey members ,no" ho" to combine iniviual contributions in the most e((ective manner (or a coorinate an appropriate response%

AACSB: Analytic Blooms: Understand Learning !"ecti#e: $4-$3 %&y =electronic= or =#irtal= teams are critical in com!ining and le#eraging noledge in organi+ations and &o t&ey can !e made more e''ecti#e. Le#el o' ,i''iclty: 2 edim /opic: Using /ec&nology to Le#erage 6man Capital and noledge

4-$/


/)% (p. 14) =nce a ,no"lege asset e%g% so(t"are. is evelope an pai (or it can be use many times at very lo" cost as long as it oesn't have to be substantially moi(ie each time% TRUE =ne o( the challenges o( ,no"lege-intensive organizations is to capture an coi(y the ,no"lege an e&perience that in e((ect resies in the heas o( its employees% =nce a ,no"lege asset e%g% a so(t"are coe or processes. is evelope an pai (or it can be reuse many times at very lo" cost assuming that it oesn't have to be substantially moi(ie each time%


//% (p. 14) Accoring to the te&t e((ective e-teams ienti(ie group members "ith a proper balance o( technical an interpersonal s,ills% TRUE !he potential (or process losses tens to be more prevalent in e-teams than in traitional teams because the geographical ispersion o( members increases the comple&ity o( establishing e((ective interaction an e&changes% uch problems can be e&acerbate "hen team members have less than ieal competencies an social s,ills% !his can eroe problem-solving capabilities as "ell as the e((ective (unctioning o( the group as a social unit%


4-$4


/4% (p. 14) +&plicit ,no"lege is generally ,no"n to everyone in the (irm an is not a critical concern o( management% FALSE +&plicit or coi(ie. ,no"lege is ,no"lege that can be ocumente "iely istribute an easily replicate% =ne o( the challenges o( ,no"lege-intensive organizations is to capture an coi(y the ,no"lege an e&perience that in e((ect resies in the heas o( its employees% =ther"ise they "ill have to constantly reinvent the "heel "hich is both e&pensive an ine((icient%


/1% (p. 149> 151) Intellectual property rights are easier to e(ine an protect than property rights (or physical assets e%g% plant an e*uipment.% FALSE Intellectual property rights are more i((icult to e(ine an protect than property rights (or physical assets e%g% plant e*uipment an lan.% 6o"ever i( intellectual property rights are not reliably protecte by the state there "ill be no incentive to evelop ne" proucts an services%

AACSB: Analytic Blooms: Understand Learning !"ecti#e: $4-$ /&e c&allenge o' protecting intellectal property and t&e importance o' a 'irm*s dynamic capa!ilities. Le#el o' ,i''iclty: 2 edim /opic: ?rotecting t&e 8ntellec tal Assets o' t&e rgani+ation: 8ntellectal ?roperty and ,ynamic Capa!ilities

Multiple Choice Questions

4-$1


/<% (p. 125) !he ma,eup o( goos an services in the >ross omestic 9roucts o( evelope countries has change over the last ecae% More than 10 o( the value o( >9 o( evelope countries is base on A% clothing an apparel% E% capital accumulation% C% (inancial management% D. ,no"lege% !oay more than 10 percent o( the gross omestic prouct >9. in evelope economies is ,no"lege-base@ it is base on intellectual assets an intangible people s,ills%

AACSB: Analytic Blooms: Understand Learning !"ecti#e: $4-$1 %&y t&e management o' noledge pro'essionals and noledge itsel' are so critical in today*s organi+ations. Le#el o' ,i''iclty: 2 edim /opic: /&e Central 0ole o' noledge in /oday*s conomy

/3% (p. 124-125) As the competitive environment changes strategic management must (ocus on i((erent aspects o( the organization% Recently strategic management has move (rom (ocusing on A% intangible resources to tangible resources% B. tangible resources to intangible resources% C% "or,ing capital to (i&e capital% % (i&e capital to "or,ing capital% For most o( the )0th century managers (ocuse on tangible resources such as lan e*uipment an money an intangibles li,e brans image an customer loyalty% !oay more than 10 percent o( the >9 in evelope economies is ,no"lege-base@ it is base on intellectual assets an intangible people s,ills%


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/% (p. 125) Changes in our economy have (orce (irms to be more concerne "ith protecting their A% ,no"lege "or,ers% E% social capital% C% intellectual capital% D. all o( these% In the ,no"lege economy "ealth is increasingly create by e((ective management o( ,no"lege "or,ers instea o( by e((icient control o( physical an (inancial assets% !he gro"ing importance o( ,no"lege couple "ith the move by labor mar,ets to re"ar ,no"lege "or, tells us that investing in a company is buying a set o( talents capabilities s,ills an ieasDintellectual capitalDnot physical an (inancial resources%


/2% (p. 123) In the ,no"lege economy i( a large portion o( a (irm's value is in intellectual an human assets the i((erence bet"een the company's mar,et value an boo, value shoul GGGGGGGGGGG a company "ith mostly physical an (inancial assets% A% be e*ual to E% be smaller than C. be larger than % not be correlate "ith In (irms "here ,no"lege an the management o( ,no"lege "or,ers are relatively important contributors to eveloping proucts an services an physical resources are less critical the ratio o( mar,et-to-boo, value tens to be much higher%


4-$3


40% (p. 123) Accoring to the te&t intellectual capital is the i((erence bet"een the mar,et value an the boo, value o( a (irm% Intellectual capital can be increase by A% increasing retention o( belo" average "or,ers% B. attracting an retaining ,no"legeable "or,ers% C% ecreasing labor costs% % increasing the turnover o( employees% Companies create value in the ,no"lege-intensive economy an thus intellectual capital by attracting an leveraging human capital e((ectively through mechanisms that create proucts an services o( value over time%


4$% (p. 123) 7hich o( the (ollo"ing (irms "oul you e&pect to have the highest ratio o( mar,et value to boo, valueH A% 5nion 9aci(ic railroa. B. >oogle C% International 9aper % ?ucor steel. As sho"n in +&hibit 4%$ (irms such as Apple >oogle Microso(t an =racle have very high mar,et value to boo, value ratios because o( their high investment in ,no"lege resources an technological e&pertise% In contrast (irms in more traitional inustry sectors such as International 9aper ?ucor an outh"est Airlines have relatively lo" mar,et to boo, ratios%

AACSB: Analytic Blooms: Apply Learning !"ecti#e: $4-$1 %&y t&e management o' noledge pro'essionals and noledge itsel' are so critical in today*s organi+ations. Le#el o' ,i''iclty:  6ard /opic: /&e Central 0ole o' noledge in /oday*s conomy

4-$


4)% (p. 123) 6uman capital inclues A. an iniviual's capabilities ,no"lege an s,ills% E% the relationships bet"een people% C% the output (rom assembly line employees% % an improve prouct% 6uman capital is the iniviual capabilities ,no"lege s,ills an e&perience o( the company's employees an managers% !his ,no"lege is relevant to the tas, at han as "ell as the capacity to a to this reservoir o( ,no"lege s,ills an e&perience through learning%

AACSB: Analytic Blooms: 0emem!er Learning !"ecti#e: $4-$1 %&y t&e management o' noledge pro'essionals and noledge itsel' are so critical in today*s organi+ations. Le#el o' ,i''iclty: 1 asy /opic: /&e Central 0ole o' noledge in /oday*s conomy

4/% (p. 123) GGGGGGGGGG inclues creativity an problem solving ability% A% 9hysical capital B. 6uman capital C% ocial capital % +motional capital 6uman capital is the iniviual capabilities ,no"lege s,ills an e&perience o( the company's employees an managers% !his ,no"lege is relevant to the tas, at han as "ell as the capacity to a to this reservoir o( ,no"lege s,ills an e&perience through learning%


4-$2


44% (p. 123) GGGGGGGGGG can be e(ine as the net"or, o( relationships that iniviuals have throughout the organization% A% 6uman capital B. ocial capital C% Intellectual capital % !acit ,no"lege ocial capital is the net"or, o( relationships that iniviuals have throughout the organization% Relationships are critical in sharing an leveraging ,no"lege an in ac*uiring resources% ocial capital can e&ten beyon the organizational bounaries to inclue relationships bet"een the (irm an its suppliers customers an alliance partners%


41% (p. 12) !acit ,no"lege A% is the same as e&plicit ,no"lege% E% is (oun mostly at the lo"er levels o( the organization% C% can be coi(ie but not reprouce% D. can be accesse only "ith the consent o( the employees because it is in the mins o( the employees% !acit ,no"lege is in the mins o( employees an is base on their e&periences an bac,grouns% It is share only "ith the consent an participation o( the iniviual%


4-)0


4<% (p. 12) ?e" ,no"lege involves the continual interaction bet"een GGGGGGGGGG an GGGGGGGGGG ,no"lege% A% intellectual@ pragmatic E% theoretical@ practical C. tacit@ e&plicit % etaile@ tacit ?e" ,no"lege is constantly create through the continual interaction o( e&plicit an tacit ,no"lege% Consier t"o so(t"are engineers "or,ing together on a computer coe% !he computer coe is the e&plicit ,no"lege% Ey sharing ieas base on each iniviual's e&perience their tacit ,no"lege they create ne" ,no"lege "hen they moi(y the coe%


43% (p. 12) Recently a ,no"lege "or,er's loyalty to his or her employing (irm has GGGGGGGGGG compare to his or her loyalty to his or her pro(ession an colleagues% A% increase B. ecrease C% remaine the same % no correlation "hen !he rise to prominence o( ,no"lege "or,ers as a vital source o( competitive avantage is changing the balance o( po"er in toay's organization% #no"lege "or,ers place pro(essional evelopment an personal enrichment (inancial an other"ise. above company loyalty%


4-)$


4% (p. 12) !he te&t iscusses three areas a (irm must be concerne "ith in orer to ,eep their best an brightest employees (rom leaving% !hese inclue all o( the (ollo"ing +C+9! A% hiringJselecting% B. sortingJabsorbing% C% eveloping% % retaining% 6iring is the (irst process in "hich all success(ul organizations must engage to buil an leverage human capital% Firms must also evelop employees to (ul(ill their (ull potential to ma&imize oint contributions an provie the "or,ing e nvironment an intrinsic an e&trinsic re"ars to retain their best an brightest%

AACSB: Analytic Blooms: 0emem!er Learning !"ecti#e: $4-$2 /&e importance o' recogni+ing t&e interdependence o' attracting de#eloping and retaining &man capital. Le#el o' ,i''iclty: 1 asy /opic: 6man Capital: /&e 7ondation o' 8ntellectal Capital

42% (p. 12<) Managing a ,no"lege intensive "or,(orce is very challenging% !he best "ay (or a (irm to manage its "or,(orce is to A% retain ,no"lege "or,ers% E% attract the brightest employees% C. balance e((orts in the attraction selection an retention o( top talent% % ensure that it pays higher salaries than its rivals% Attracting eveloping an retaining human capital are highly interrelate activities li,e a three-legge stool see +&hibit 4%).% I( one leg is "ea, or bro,en the stool collapses% !o illustrate such interepenence poor hiring impees the e((ectiveness o( evelopment a n retention processes% In a similar vein ine((ective retention e((orts place aitional burens on hiring an evelopment%


4-))


10% (p. 129-1$) Firms must compete (or top talent% 7hen attracting an selecting employees (irms must strive to select the best (it (or both the employee an the (irm% In an e((ort to reuce "aste time an e((ort in intervie"ing too many caniates "hile assuring a goo caniate pool a (irm shoul A% run employment as in the ne"spaper% B. use a pre-intervie" *uiz or bozo (ilter e%g% Cooper o(t"are.% C% only let lo"er level employees intervie" ob caniates% % re(rain (rom hiring by re(errals (rom present employees% Alan Cooper presient o( Cooper o(t"are Inc% cleverly uses technology to hone in on the problem-solving ability o( his applicants an their attitues be(ore an intervie" even ta,es place% 6e has evise a bozo (ilter an online test that can be applie to any inustry% Ee(ore you spen time on "hether ob caniates "ill "or, out satis(actorily (in out ho" their mins "or,%


1$% (p. 1$) Many companies use re(errals by current employees as a source (or ne" hiring an even monetarily re"ar them (or the (ollo"ing reasons: A% it is less e&pensive than the (ees pai to heahunters% E% current employees are normally very care(ul in recommening someone because their creibility is on the line% C% it is a goo test o( employee loyalty% D. both because current employees are care(ul in their recommenations because o( their creibility an also because it is less e&pensive than the (ees pai to heahunters% >+ Meical ystems o((ers a monetary re"ar (or re(errals but it is peanuts compare to the (ees that it typically pays to heahunters (or each person hire% Also "hen someone re(ers a (ormer colleague or (rien (or a ob his or her creibility is on the line% !hus employees "ill be care(ul in recommening people (or employment unless they are reasonably con(ient that these people are goo caniates%


4-)/


1)% (p. 1$) AEC Incorporate esires to have the most *uali(ie people in every position throughout its organization% !his is an e&le o( a concern (or A. eveloping human capital% E% eveloping social net"or,s% C% ecreasing labor intensive training% % leveraging organizational structure% It is not enough to hire top-level talent an e&pect that the s,ills an capabilities o( those employees remain current throughout the uration o( their employment% Rather training an evelopment must ta,e place at all levels o( the organization "hich is consiere eveloping human capital%

AACSB: Analytic Blooms: Apply Learning !"ecti#e: $4-$2 /&e importance o' recogni+ing t&e interdependence o' attracting de#eloping and retaining &man capital. Le#el o' ,i''iclty:  6ard /opic: 6man Capital: /&e 7ondation o' 8ntellectal Capital

1/% (p. 1$) eveloping human capital is essential to maintaining a competitive avantage in toay's ,no"lege economy% +((orts an initiatives to evelop human capital shoul be irecte A% at top managers% E% at human resource epartments% C% at the employees themselves% D. throughout the (irm at all levels% It is not enough to hire top-level talent an e&pect that the s,ills an capabilities o( those employees remain current throughout the uration o( their employment% Rather training an evelopment must ta,e place at all levels o( the organization "hich is consiere eveloping human capital%


4-)4


14% (p. 12) Maintaining a competitive "or,(orce is very challenging in toay's economy% !he role o( evaluating human capital in recent years has A. increase% E% ecrease% C% become less important% % remaine the same% In toay's environment collaboration an interepenenc e are vital to organizational success% Iniviuals must share their ,no"lege an "or, con structively to achieve collective not ust iniviual goals% !raitional systems evaluate per(ormance (rom a single perspective i%e% top-o"n. an generally on't aress the so(ter imensions o( communications an social s,ills values belie(s an attitues%


11% (p. 1) In a /<0-egree evaluation an (eebac, system GGGGGGGGGG rate a person's s,ill an per(ormance% A% superiors E% irect reports C% colleagues D. all o( these !o aress the limitations o( the traitional approach many organizations use /<0-egree evaluation an (eebac, systems% 6ere superiors irect reports colleagues an even internal an e&ternal customers rate a person's per(ormance%


4-)1


1<% (p. 1) Attracting an retaining human capital is a challenge (or many (irms toay% Firms e&periencing high turnover shoul A% (ocus on increase recruiting% E% ecrease money spent on human capital% C% ma,e their "or, environment less stimulating% D. aopt e((ective retention strategies% teppe-up recruiting is a poor substitute (or "ea, retention% !oay's leaers can either provie the "or, environment an incentives to ,eep prouctive employees an management (rom "anting to bail out or they can use legal means such as employment contracts an noncompete clauses%


13% (p. 1) In orer to ta,e avantage o( investment in human capital a (irm shoul A% rotate "or,ers through (unctions in the company as *uic,ly as possible% E% re(rain (rom training iniviual employees% C. establish practices that "ill enhance employee retention% % none o( these% ince attracting an eveloping talent represent an investment to a (irm it is necessary to ensure the thir step is also one to (ully leverage the human capital% A (irm must also retain the talent%


4-)<


1% (p. 1) !he least e((ective "ay to retain human capital is A% encouraging employee ienti(ication "ith organizational mission an goals% B. re*uiring employees to sign agreements that prevent them (rom "or,ing (or competitors in the (uture% C% proviing employees "ith a challenging an stimulating "or, environment% % proviing employees "ith (inancial an non(inancial re"ars an incentives% For retention o( talent greater e((orts shoul be irecte at a goo "or, environment an incentives although employment contracts an noncompete clauses may sometimes have their place%


12% (p. 14) >enerally employees are most li,ely to stay "ith an organization i( A% the employer provies high salaries to technology pro(essionals% B. the organization's mission an values align "ith the employee's mission an values% C% the (irm is in a high tech inustry% % the mission an values o( the organization change o(ten% 9eople "ho ienti(y "ith an are more committe to the core mission an values o( the organization are less li,ely to stray or bolt to the competition% 9 aying people more is selom the most important (actor in attracting an retaining human capital%


4-)3


<0% (p. 15) Many success(ul (irms use internal labor mar,ets% !he most important reason they o this is because A% they "ant to encourage ob rotation% E% i( an employee is in the same epartment (or too long heJshe "oul become inispensable% C. they "ant to ,eep highly mobile employees motivate an challenge% % an employee "ho moves too much can be ienti(ie as unreliable an eliminate% =ne "ay (irms ,eep highly mobile employees motivate an challenge is through opportunities that lo"er barriers to an employee's mobility "ithin a company% For e&le hell =il Company has create an open sourcing moel (or talent% Bobs are liste on hell's intranet an "ith a t"o-month notice employees can go to "or, on anything that interests them%


<$% (p. 13) All o( the (ollo"ing are the bene(its o( iversity in a (irm's "or,(orce e&cept: A% Creativity Argument% E% 9roblem-olving Argument% C% Resource Ac*uisition Argument% D. imilarity in 9erspectives Argument% i& areas "here soun management o( iverse "or,(orces can improve an organization's e((ectiveness an competitive avantages are: $. cost ). resource ac*uisition /. mar,eting 4. creativity 1. problem-solving an <. organizational (le&ibility%


4-)


<)% (p. 1) 6uman capital an social capital are vital (or superior (irm per(ormance% I( a (irm has strong human capital the (irm may e&ploit this by builing social capital% !his can be accomplishe through A% re*uiring "or,ers to "or, inepenently o( each other% E% ecreasing the interaction o( epartments "ithin the (irm% C. encouraging the sharing o( ieas bet"een employees in the (irm% % structuring the (irm "ith rigi epartmental an employee ivisions% In the ,no"lege economy the evelopment o( social capital that is the (rienships an "or,ing relationships among talente iniviuals. gains importance because it he lps tie ,no"lege "or,ers to a given (irm% !he interaction sharing an collaboration "ill create a situation in "hich a "or,er "ill evelop (irm-speci(ic ties an be less li,ely to bolt (or a higher salary o((er%



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<4% (p. 1) ocial capital is a source o( strength to many (irms% Firms leverage their social capital in an e((ort to create competitive avantages% A (irm's social capital is base on A% an employee's iniviual abilities% B. the relationships among a (irm's employees% C% a (irm's allocation o( (inancial resources% % an iniviual's ,no"lege% In the ,no"lege economy the evelopment o( social capital that is the (rienships an "or,ing relationships among talente iniviuals. gains importance because it he lps tie ,no"lege "or,ers to a given (irm%


<1% (p. 1<) ocial net"or, analysis is help(ul because the con(iguration o( group members' social ties "ithin an outsie the group a((ects the e&tent to "hich members connect to iniviuals "ho o all o( the (ollo"ing +C+9!: A% convey neee resources% B. ensure that everyone has the same perspective on strategic an operational issues% C% have the opportunity to e&change in(ormation an support% % have the motivation to treat each other in positive "ays% !he con(iguration o( group members' social ties "ithin an outsie the group a((ects the e&tent to "hich members connect to iniviuals "ho convey neee resources have the opportunity to e&change in(ormation an support have the motivation to treat each other in positive "ays an have the time to evelop trusting relationships that might improve the groups' e((ectiveness%


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<<% (p. 14$) In social net"or, analysis GGGGGGGGGG stresses. the importance o( ties connecting heterogeneous people helping to ensure a "ie range o( iversity in in(ormation an perspective% A% closure E% reunancy C. briging relationships % social supports Eriging relationships in contrast to closure stresses the importance o( ties connecting people% +mployees "ho brige isconnecte people ten to receive timely iverse in(ormation because o( their access to a "ie range o( heterogeneous in(ormation (lo"s% uch briging relationships span a number o( i((erent types o( bounaries%


<3% (p. 14$) In social net"or, analysis high levels o( GGGGGGGGGG o(ten come at a price% For e&le groups can become too insular an (ail to share "hat they have learne "ith people outsie the group% A% briging relationships E% intellect C. closure % iverse ,no"lege >roups that become too close can become insular% !hey cut themselves o(( (rom the rest o( the organization an (ail to share "hat they are learning (rom people outsie their group% Research sho"s that "hile managers nee to encourage closure up to a point i( there is too much closure they nee to encourage people to open up their groups an in(use ne" ieas through briging relationships%


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<% (p. 142) Avantages o( e((ective social net"or,s (or career success inclue all o( the (ollo"ing +C+9! A% access to private in(ormation% E% access to iverse s,ill sets% C% greater po"er% D. greater reunancy in ,no"lege sources% +((ective social net"or,s can play a ,ey role in an iniviual's career avancement an success% =ne's social net"or, potentially can provie three uni*ue avantages: private in(ormation access to iverse s,ill sets an po"er%


<2% (p. 14-144) Among the o"nsies o( social capital isJare: A% high social capital may bree groupthin, i%e% a tenency not to *uestion share belie(s% E% socialization processes "hereby iniviuals are socialize into the norms an values o( the organization may become e&pensive% C% iniviuals may become less "illing to collaborate on oint proects% D. social capital may both bree groupthin, an the socialization processes to create it orientation training etc%. can be e&pensive% !here are several o"nsies to social capital% o me (irms have been aversely a((ecte by very high levels o( social capital because it may bree groupthin, a tenency not to *uestion share belie(s% Aitionally the socialization processes orientation training etc%. can be e&pensive in terms o( both (inancial resources an managerial commitment%


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30% (p. 14-144) ocial capital has many potential bene(its% 6o"ever accoring to the te&t social capital A% is al"ays bene(icial to a (irm% B. may or may not be bene(icial to a (irm% C% usually restricts the prouctivity o( employees% % al"ays hurts (irm per(ormance% ocial capital is not al"ays bene(icial% For e&le in (irms "ith eep-roote minsets they may continue to hire re"ar an promote li,e-mine people "ho ten to (urther intensi(y organizational inertia an eroe innovation% uch homogeneity "oul increase over time an ecrease the e((ectiveness o( ecision-ma,ing processes%


3$% (p. 145) !he use o( in(ormation technology e%g% e-mail. has increase in recent years in many organizations% !his has helpe to A. communicate in(ormation e((iciently% E% ma,e more e((ective use o( time in every situation% C% restrict social net"or, gro"th% % create smaller social net"or,s% +-mail is an e((ective means o( communicating a "ie variety o( in(ormation% It is *uic, easy an almost costless% haring ,no"lege an  in(ormation throughout the organization can be a means o( conserving resources eveloping proucts an services an creating ne" opportunities%

AACSB: Analytic Blooms: Understand Learning !"ecti#e: $4-$5 /&e #ital role o' tec&nology in le#eraging noledge and &man capital. Le#el o' ,i''iclty: 2 edim /opic: Using /ec&nology to Le#erage 6man Capital and noledge

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3)% (p. 14) !he creation o( ,no"lege assets is typically characterize by A% high up(ront costs an subse*uent high variable costs% E% high (i&e costs an high variable costs% C% lo" up(ront costs an high variable costs% D. high up(ront costs an lo" variable costs% =ne o( the challenges o( ,no"lege-intensive organizations is to capture an coi(y the ,no"lege an e&perience that in e((ect resies in the heas o( its employees% =nce a ,no"lege asset e%g% a so(t"are coe or processes. is evelope an pai (or it can be reuse many times at very lo" cost assuming that it oesn't have to be substantially moi(ie each time%


3/% (p. 14) Mary tinson "as re*uire to ta,e over a proect a(ter the entire team le(t the company% he "as able to reconstruct "hat the team ha acco mplishe through reaing emails e&change by the previous team's members% !his is an e&le o( A. using e&plicit ,no"lege% E% ine((icient use o( in(ormation management% C% using tacit ,no"lege% % all o( these% +&plicit or coi(ie. ,no"lege on the other han is ,no"lege that can be ocumente "iely istribute an easily replicate% 6ere Mary "as able to use ,no"lege assets create by previous employees to complete the "or,%

AACSB: Analytic Blooms: Apply Learning !"ecti#e: $4-$3 %&y =electronic= or =#irtal= teams are critical in com!ining and le#eraging noledge in organi+ations and &o t&ey can !e made more e''ecti#e. Le#el o' ,i''iclty:  6ard /opic: Using /ec&nology to Le#erage 6man Capital and noledge

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34% (p. 149) !he management o( intellectual property involves all o( the (ollo"ing +C+9! A% patents% E% contracts "ith con(ientiality an noncompete clauses% C. converting e&plicit ,no"lege to tacit ,no"lege% % copyrights an traemar,s% !he management o( intellectual property I9. involves besies patents contracts "ith con(ientiality an noncompete clauses copyrights an the evelopment o( traemar,s% Moreover eveloping ynamic capabilities is the only avenue proviing (irms "ith the ability to recon(igure their ,no"lege an activities to a chieve a sustainable competitive avantage%

AACSB: Analytic Blooms: 0emem!er Learning !"ecti#e: $4-$ /&e c&allenge o' protecting intellectal property and t&e importance o' a 'irm*s dynamic capa!ilities. Le#el o' ,i''iclty: 1 asy /opic: ?rotecting t&e 8ntellec tal Assets o' t&e rgani+ation: 8ntellectal ?roperty and ,ynamic Capa!ilities

31% (p. 151) ynamic capabilities inclue all o( the (ollo"ing +C+9!: A% learning an innovating% E% the ability o( an organization to challenge the conventional inustry in its inustry an mar,et% C. becoming more e((icient in operational processes% % continuously aopting ne" "ays o( serving the evolving nees o( the mar,et% ynamic capabilities are about the ability o( an organization to challenge the conventional "isom "ithin its inustry an mar,et learn an innovate aapt to the changing "orl an continuously aopt ne" "ays to serve the evolving nees o( the mar,et%

AACSB: Analytic Blooms: 0emem!er Learning !"ecti#e: $4-$ /&e c&allenge o' protecting intellectal property and t&e importance o' a 'irm*s dynamic capa!ilities. Le#el o' ,i''iclty: 1 asy /opic: ?rotecting t&e 8ntellec tal Assets o' t&e rgani+ation: 8ntellectal ?roperty and ,ynamic Capa!ilities

Essay Questions

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3<% (p. 125-123) 7hat is intellectual capital an "hat is its e((ect on the ratio o( a (irm's mar,et value to boo, valueH Ans"ers "ill vary%


33% (p. 12-1) +((ective human capital is a bene(it to any organization% 7hat are some challenges (irms (ace "hen attempting to attract an evelop top talentH Ans"ers "ill vary%


3% (p. 129-1$) iscuss the aage hire (or attitue train (or s,ill% 7hat are its implications (or the attraction training an retention o( top talentH Ans"ers "ill vary%


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32% (p. 1-15) In an e((ort to attract an retain top talent (irms provie (inancial an non(inancial re"ars to their employees% >ive e&les o( each an escribe ho" the incentives you have chosen may impact iniviual employees% Ans"ers "ill vary%


0% (p. 13) !he "or,(orce in the 5nite tates "ill become increasingly iverse over the ne&t (e" ecaes% 7hat strategies shoul (irms unergo to ta,e (ull avantage o( this emerging trenH Ans"ers "ill vary%


$% (p. 1-14) escribe social capital% 7here oes it come (rom an ho" can a (irm attempt to buil itH Ans"ers "ill vary%


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Chap 004

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