Deck 4: Recognizing a Firm's Intellectual Assets Moving beyond a Firm's Tangible Resources

Question 1

Explicit knowledge is generally known to everyone in the firm and is not a critical concern of management.

Answer 1

False

Question 2

Developing social capital is risky for an organization because social capital is specific to individuals and remains with the employee, if he or she leaves the organization.

Answer 2

False

Question 3

Technology can be used successfully to leverage human capital and knowledge within organizations as well as with customers and suppliers beyond their boundaries.

Answer 3

True

Question 4

The importance of human capital has decreased in recent years. For this reason, many firms have placed greater attention on attracting talent but not on developing or retaining it.

Question 5

One potential downside of building social capital in an organization is groupthink. This means everyone in the group thinks on his or her own and comes up with new ideas.

Question 6

Technology can also enable much more sophisticated forms of communication in addition to knowledge sharing.

Question 7

Sharing knowledge and information throughout the organization is important for conserving resources, developing products and services, and thwarting new opportunity creation.

Question 8

Technical skills are a necessary and sufficient condition for hiring an employee.

Question 9

Since electronic teams (e-teams) seldom meet face-to-face, it is not important for them to be concerned with how to combine individual contributions effectively.

Question 10

The more reliance a firm has on intellectual capital, the closer its book value will be to its market value.

Question 11

A hiring agent offers a scientist approximately the same salary, facilities, equipment, and shared laboratory with 10 highly skilled and enthusiastic scientists. Part of the job is to collaborate with these peers and jointly develop promising drug compounds. This structure will create greater firm loyalty than one in which the hiring agent offers only monetary compensation.

Question 12

Once a knowledge asset (e.g., a software code) is developed and paid for, it can be used many times at very low cost as long as it does not have to be substantially modified each time.

Question 13

The development of intellectual capital (that is, the friendships and working relationships among talented individuals) gains importance because it helps tie knowledge workers to a given firm.

Question 14

Knowledge workers are more loyal to their companies than traditional workers.

Question 15

Intellectual property rights are the tangible property owned by a firm.

Question 16

Intellectual property rights are easier to define and protect than property rights for physical assets (e.g., plant and equipment).

Question 17

Social network analysis can be used to help identify groups or clusters of individuals that comprise the network, individuals who link the clusters, and other network members.

Question 18

The difference between the market value and book value of a firm is its social capital.

Question 19

One of the most important elements in a good employee is his or her attitude. Firms should follow the adage: hire for attitude, train for skill.

Question 20

Developing and protecting social capital requires independence, in which individuals must spend most of their time working individually.

Question 21

Which of the following firms would you expect to have the highest ratio of market value to book value?

A) General Motors
B) Intel
C) Microsoft
D) Nucor

Question 22

Intangible assets derived mostly from human capital are on the rise, according to the advisory firm Ocean Tomo. A study of the Standard and Poors' 500 index from 1975 to 2015 demonstrateda 17 percent increase in market value of intangible assets over this time period. Companies such as Stryker get 70 percent of its value from intangibles. Intangible assets are

A) equipment.
B) land.
C) money.
D) non-physical.

Question 23

According to a recent Gallup study, companies with the most engaged workers outperformed those with the least engaged workers on profitability, productivity, and lower turnover. Whichof the following processes is not likely to be an important factor in assuring this result?

A) hiring
B) developing
C) engaging
D) retaining

Question 24

Today, the loyalty of a knowledge worker to his or her employing firm has ________ compared to his or her loyalty to his or her profession and colleagues.

A) increased
B) remained the same
C) decreased
D) no correlation when

Question 25

New knowledge involves the continual interaction between ________ and ________ knowledge.

A) intellectual; pragmatic
B) theoretical; practical
C) tacit; explicit
D) detailed; tacit

Question 26

Many companies use referrals by current employees as a source for new hiring and even monetarily reward them because

A) it is less expensive than the fees paid to headhunters.
B) current employees normally are careful in recommending someone due to their personal credibility.
C) current employees are careful in their recommendations and it is less expensive than paying headhunters.
D) it is a good test of employee loyalty.

Question 27

Tacit knowledge

A) is the same as explicit knowledge.
B) can be accessed only with the consent of the employees.
C) is found mostly at the lower levels of the organization.
D) can be codified but not reproduced.

Question 28

Creativity and problem-solving ability are considered to be part of ________ capital.

A) physical
B) social
C) human
D) emotional

Question 29

Firms must compete for top talent. In attracting and selecting employees, firms must strive to select the best fit for both the employee and the firm. In an attempt to reduce wasted time and effort in interviewing too many candidates while assuring a good candidate pool, a firm should

A) run employment ads in the newspaper.
B) only let lower-level employees interview job candidates.
C) use a pre-interview quiz.
D) refrain from hiring by referrals from present employees.

Question 30

Managing a knowledge intensive workforce is very challenging. The best way for a firm to manage its workforce is to

A) retain knowledge workers by increasing rewards.
B) ensure that it pays higher salaries than its rivals.
C) balance efforts in attraction, selection, and retention of top talent.
D) attract the brightest employees and train them often.

Question 31

The environmental sustainability strategy of a firm might be used to retain high-performing employees because recent college graduates

A) seek to make a social or environmental difference in the world.
B) want a job in a company that is committed to corporate profit.
C) feel that profitability is not important.
D) are loyal to firms that are concerned with employee education.

Question 32

Changes in our economy have forced firms to be ________ concerned with protecting their knowledge workers, social capital, and intellectual capital.

A) less
B) more
C) potentially
D) not

Question 33

As the competitive environment changes, strategic management must focus on different aspects of the organization. Recently, strategic management has moved from focusing on tangible resources to

A) fixed capital.
B) working capital.
C) intangible resources.
D) investment capital.

Question 34

The text discusses three areas a firm must be concerned with to keep their best and brightest employees from leaving. These include all the following except

A) hiring/selecting.
B) developing.
C) sorting/absorbing.
D) retaining.

Question 35

In the knowledge economy, if a large portion of company value is in intellectual and human assets, the difference between the market value and book value of the company should ________a company with mostly physical and financial assets.

A) be equal to
B) not be correlated with
C) be smaller than
D) be larger than

Question 36

According to Exhibit 4.1 in the textbook (Ratio of Market Value to Book Value for Selected Companies), firms with high market value to book value ratios achieve this because of their ________ investment in ________ resources and technological expertise.

A) low; physical
B) low; tangible
C) high; knowledge
D) high; liquid asset

Question 37

Human capital includes

A) the relationships between people.
B) an improved product or service.
C) capabilities, knowledge, and skills of an individual.
D) the output from assembly line employees.

Question 38

According to the text, intellectual capital is the difference between the market value and the book value of a firm. Intellectual capital can be increased by

A) increasing retention of below average workers.
B) attracting and retaining knowledgeable workers.
C) decreasing labor costs.
D) increasing the turnover of employees.

Question 39

Two software engineers working together on a computer code share their ________ knowledge to create new knowledge.

A) explicit
B) theoretical
C) tacit
D) easily reproduced

Question 40

________ is the network of relationships that individuals have throughout the organization.

A) Human capital
B) Social capital
C) Intellectual capital
D) Tacit knowledge

Question 41

Data analytics add new information that helps predict who will leave and who will make the best employee according to Deloitte, the HR consulting company. A key advantage of the new analytics techniques over traditional approaches is that they are ________ rather than ________.

A) reactive; predictive
B) predictive; objective
C) objective; reactive
D) predictive; reactive

Question 42

Another example of social relationships causing human capital mobility is the ________ of talent from an organization to form ________.

A) stability; bail-outs
B) emigration; bail-outs
C) relocation; new business units
D) emigration; start-up ventures

Question 43

Developing human capital is essential to maintaining a competitive advantage in the current knowledge economy. Efforts and initiatives to develop human capital should be directed

A) at top managers.
B) at human resource departments.
C) throughout the firm at all levels.
D) at the employees themselves.

Question 44

The least effective way to retain human capital is to

A) encourage employee identification with organizational mission and goals.
B) provide employees with a challenging and stimulating work environment.
C) require employees to sign agreements that prevent them from working for competitors in the future.
D) provide employees with financial and nonfinancial rewards and incentives.

Question 45

Social capital is a source of strength to many firms. Firms leverage their social capital in an effort to create competitive advantages. The social capital of a firm is based on the

A) individual abilities of employees.
B) relationships among the employees of the firm.
C) allocation of the financial resources of the firm.
D) knowledge of an individual.

Question 46

Boomerang employees, according to a study published in Personnel Psychology, are statistically more likely to leave a firm if they experienced a negative life event or if they

A) received a better alternate job offer.
B) did not feel appreciated in their current job.
C) were inadequately trained for their current position.
D) had friends at the alternate company offering the job.

Question 47

In a 360-degree evaluation and feedback system, which of these does not rate the skills and performance of an individual?

A) superiors
B) family
C) direct reports
D) colleagues

Question 48

If employees are committed to the core ________ and ________ of the organization, they are less likely to leave for the competition.

A) mission; outputs
B) values; structure
C) values; hierarchy
D) mission; values

Question 49

It is anticipated that the worldwide shortage of highly skilled, college-educated workers will increase significantly by 2020, according to research by McKinsey Global Institute. Somecompanies are going as far as to redefine the jobs of their experts and are transferring some of their tasks to lower-skilled people inside and outside of their companies. By redefining these ________ knowledge jobs, they address ________ shortages and ________ costs while enhancing job satisfaction.

A) high-value; skill; lower
B) low-value; monetary; decrease
C) high-value; personnel; increase
D) high-value; skill; increase

Question 50

The effective management of diversity can enhance the social responsibility goals of an organization. Other areas where sound management of diverse workforces can improve the effectivenessof an organization and its competitive advantages include all but one of the following

A) resource acquisition
B) marketing
C) organizational flexibility
D) problem creation

Question 51

Maintaining a competitive workforce is very challenging in the current economy. The role of evaluating human capital, in recent years, has

A) remained the same.
B) increased.
C) become less important.
D) decreased.

Question 52

Employers must provide ________ to attract and retain young workers because otherwise they will be at a competitive ________.

A) training; status-quo
B) rewards; advantage
C) incentives; disadvantage
D) education; advantage

Question 53

Professionals frequently leave Microsoft en masse to form venture capital and technology start-ups, called Baby Bills, built around teams of software developers. This is an example of________ causing human capital mobility.

A) formal relationships
B) social relationships
C) tacit knowledge
D) intellectual capital

Question 54

Human capital and social capital are vital for superior firm performance. If a firm has strong human capital, the firm may exploit this by building social capital. This can be accomplishedby

A) requiring workers to work independently of each other.
B) decreasing the interaction of departments within the firm.
C) encouraging the sharing of ideas between employees in the firm.
D) structuring the firm with rigid departmental and employee divisions.

Question 55

Training and development at all levels of the organization are necessary if employees are to remain current throughout the duration of their employment. Which of the following activities would also be necessary?

A) monitoring and tracking employee development
B) monitoring only key managers
C) tracking only key managers
D) sharing employee tracking information only with key managers

Question 56

In an effort to capture key employees from competitors, firms may attract the symbolic leader of a group within a competing firm and hope others will follow. This has been termed

A) the Columbus effect.
B) the Pied Piper effect.
C) knowledge integration.
D) strategically competitive hiring.

Question 57

Attracting and retaining human capital is a challenge for many firms today. Firms experiencing high turnover should

A) focus on increased recruiting.
B) decrease money spent on human capital.
C) adopt effective retention strategies.
D) make their work environment less stimulating.

Question 58

In order to take advantage of investment in human capital, a firm should

A) rotate workers through functions in the company as quickly as possible.
B) keep employees in the same position forever.
C) refrain from training individual employees.
D) establish practices that will enhance employee retention.

Question 59

Companies that take hiring seriously must also take ________ seriously because having the right job candidates is important.

A) training
B) recruiting
C) development
D) profitability

Question 60

According to the resource-based view of the firm, competitive advantages are ________ for competitors to copy, if they are based on unique bundles of resources.

A) easier
B) faster
C) harder
D) more reliable

Question 61

In social network analysis, groups can become too insular and fail to share what they have learned with people outside the group. This is a result of

A) intellect.
B) closure.
C) bridging relationships.
D) diverse knowledge.

Question 62

In social network analysis, the importance of ties connecting heterogeneous people that help to ensure a wide range of diversity in information and perspective is known as

A) closure.
B) social supports.
C) redundancy.
D) bridging relationships.

Question 63

One of the important limitations of social capital is that it can lead to ________ whereby people do not question shared beliefs.

A) skunkworks
B) think tanks
C) isolation
D) groupthink

Question 64

Top executives can use email effectively for all of the following except

A) updates on company strategy.
B) executive perspectives on key issues.
C) overview of the executive work for the month.
D) updates on corporate intelligence.

Question 65

The ________, ________, and ________ talent is a necessary but not sufficient condition for creating competitive advantages.

A) attraction; laissez-faire; retention of
B) observance; laissez-faire; regard for
C) attraction; development; retention of
D) observance; development; hands-off approach to

Question 66

Knowledge-based resources tend to be more ________ in nature and therefore they are ________ difficult to protect against loss (i.e., the individual quitting the organization) than other types of capital, such as equipment, machinery, and land.

A) explicit; less
B) explicitly; more
C) tacit; more
D) tacit; less

Question 67

Structural holes, according to Ron Burt of the University of Chicago, are the ________ gap between two groups and are common in organizations.

A) economic
B) social
C) interpersonal
D) relational

Question 68

If employees are working effectively in teams and sharing their knowledge and learning from each other, they will be ________ to add value to the firm and they also will be ________ toleave the organization because of the loyalties and social ties that they develop over time.

A) more likely; more likely
B) less likely; more likely
C) less likely; less likely
D) more likely; less likely

Question 69

The use of sophisticated information sharing platforms has increased in recent years in many organizations. This has helped to

A) facilitate internal and external collaboration.
B) keep employees satisfied with social networks.
C) override the need for email.
D) increase paperwork.

Question 70

Social networks can assist with career success. One of the advantages of having a large social network is

A) it can help provide more complete and unbiased perspectives on issues.
B) it creates ways to guard secrets.
C) it can create ways to solve problems alone.
D) it organizes ways to isolate problems from solutions.

Question 71

Social capital has downsides. Which of the following is a downside?

A) High social capital may breed groupthink.
B) Socialization processes are inexpensive.
C) Individuals may be more willing to collaborate on joint projects.
D) Management commitment is easy to obtain.

Question 72

Advantages of effective social networks for career success include all the following except

A) access to private information.
B) greater redundancy in knowledge sources.
C) access to diverse skill sets.
D) greater power.

Question 73

The Cisco Integrated Workforce Experience (IWE) platform is a social business platform designed to facilitate ________ and ________ collaboration and decentralize decision making.

A) internal; network-side
B) external; personal
C) external; individual
D) internal; external

Question 74

Social network analysis is helpful because the configuration of the group member social ties within and outside the group affects the extent to which members connect to individuals whodoall of the following except

A) convey needed resources.
B) have the opportunity to exchange information and support.
C) ensure that everyone has the same perspective on strategic and operational issues.
D) have the motivation to treat each other in positive ways.

Question 75

Tying knowledge workers to a firm is part of the objective of the development of

A) intellectual capital.
B) explicit knowledge.
C) human capital.
D) social capital.

Question 76

An advantage of effective social networks that might help in career success is

A) public information from personal contacts.
B) private information from personal contacts.
C) trustworthy public information.
D) untrustworthy private information.

Question 77

Which of the following reasons explains why painter Vincent van Gogh died penniless, while painter Pablo Picasso left a 740 million USD estate upon his death?

A) Van Gogh had a wider range of social connections.
B) Picasso had a wider range of social connections and bridging relationships.
C) Picasso was a solitary node with few connections.
D) Van Gogh was a hub who embedded himself in a vast network that stretched across various social lines.

Question 78

The use of information technology (e.g., email) has increased in recent years in many organizations. This has helped to

A) make more effective use of time in every situation.
B) communicate information efficiently.
C) restrict social network growth.
D) create smaller social networks.

Question 79

Knowledge workers often exhibit ________ loyalties to their colleagues and their profession relative to their employing organization.

A) fewer
B) less favorable
C) no
D) greater

Question 80

The power of a manager, traditionally, was embedded in the hierarchy of the firm. As organizational structures flatten, this power is repositioned in the ________ of the network. Thesepeople are not necessarily at the top of the hierarchy or even experts in their fields.

A) clients
B) brokers
C) employees
D) suppliers