Test Answers on CAPSTONE Chapter 4 – Flashcards
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According to the text, for most of the twentieth century, managerial efforts were directed more toward the efficient allocation of labor and capital - the two traditional factors of production.
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TRUE
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The importance of human capital has decreased in recent years. For this reason, many firms have placed greater attention on attracting, but not on developing or retaining talent.
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FALSE
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The more reliance a firm has on intellectual capital, the closer its book value will be to its market value.
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FALSE
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The difference between the market value and book value of a firm is its social capital.
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FALSE
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In today's economy, reliance on the three traditional financial statements: income statement, balance sheet, and statement of cash flow, has increased.
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FALSE
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Firms such as Oracle, Google, and Genentech will tend to have a higher ratio of market value to book value than "industrial companies" such as International Paper and Nucor Steel.
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TRUE
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Creation of new knowledge typically involves the continual interaction of explicit and tacit knowledge.
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TRUE
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Knowledge workers are more loyal to their companies than traditional workers.
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FALSE
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Technical skills are a necessary and sufficient condition for hiring an employee.
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FALSE
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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."
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TRUE
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Companies have found that referrals from their own employees are generally an ineffective approach to recruiting top talent.
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FALSE
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Many leading companies look for creativity and flexibility in problem solving during the interview process. This helps a firm assess a potential employee's social capital.
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FALSE
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In most effective evaluation and reward systems employees only receive evaluation and feedback from their immediate supervisor.
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FALSE
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360-degree evaluation and feedback systems address many of the limitations of traditional approaches of evaluating human capital.
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TRUE
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360-degree evaluation systems are not useful due to the need to integrate large amounts of feedback.
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FALSE
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The most effective method of improving a firm's retention of top talent is to intensify its hiring efforts.
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FALSE
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An internal labor market (to increase an employee's mobility within a firm) is one means of increasing employee retention.
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TRUE
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The text suggests that talented professionals are typically most concerned about financial rewards. Money is the top reason why such employees take and leave jobs.
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FALSE
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Workforces, which reflect demographic changes, will become more homogeneous (or less varied) over the next few decades with regard to gender, race, ethnicity, and nationality
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FALSE
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Social capital is based on the network of relationships within a firm, not in the skills and abilities of an individual employee.
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TRUE
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Social capital is found in the knowledge, skills, and abilities of individual employees.
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FALSE
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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.
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FALSE
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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.
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TRUE
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Developing and protecting social capital requires independence—that is, individuals must spend most of their time working individually.
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FALSE
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In social networks, in bridging relationships, one member is central to the communication flows in a group.
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FALSE
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Closure, in contrast to bridging relationships, stresses the importance of ties connecting heterogeneous people.
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FALSE
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From an individual's perspective, social networks deliver three unique advantages: private information, access to diverse skill sets, and power.
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TRUE
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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.
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FALSE
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The role of technology in the recruitment of human capital has lowered individuals' reliance on the use of social networks.
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FALSE
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The use of e-mail can be distracting to employees. Some firms limit the time that employees spend using e-mail.
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TRUE
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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.
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FALSE
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Once a knowledge asset (e.g., software) is developed and paid for, it can be used many times at very low cost as long as it doesn't have to be substantially modified each time.
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TRUE
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According to the text, effective e-teams identified group members with a proper balance of technical and interpersonal skills.
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TRUE
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Explicit knowledge is generally known to everyone in the firm and is not a critical concern of management.
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FALSE
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Intellectual property rights are easier to define and protect than property rights for physical assets (e.g., plant and equipment).
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FALSE
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The makeup of goods and services in the Gross Domestic Products of developed countries has changed over the last decade. More than 50% of the value of GDP of developed countries is based on A. clothing and apparel. B. capital accumulation. C. financial management. D. knowledge.
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D. knowledge.
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As the competitive environment changes, strategic management must focus on different aspects of the organization. Recently, strategic management has moved from focusing on A. intangible resources to tangible resources. B. tangible resources to intangible resources. C. working capital to fixed capital. D. fixed capital to working capital.
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B. tangible resources to intangible resources.
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Changes in our economy have forced firms to be more concerned with protecting their A. knowledge workers. B. social capital. C. intellectual capital. D. all of these.
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D. all of these.
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In the knowledge economy, if a large portion of a firm's value is in intellectual and human assets, the difference between the company's market value and book value should ___________ a company with mostly physical and financial assets. A. be equal to B. be smaller than C. be larger than D. not be correlated with
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C. be larger than
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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.
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B. attracting and retaining knowledgeable workers.
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Which of the following firms would you expect to have the highest ratio of market value to book value? A. Union Pacific (railroad) B. Google C. International Paper D. Nucor (steel)
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B. Google
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Human capital includes A. an individual's capabilities, knowledge, and skills. B. the relationships between people. C. the output from assembly line employees. D. an improved product.
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A. an individual's capabilities, knowledge, and skills.
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__________ includes creativity and problem solving ability. A. Physical capital B. Human capital C. Social capital D. Emotional capital
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B. Human capital
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__________ can be defined as the "network of relationships that individuals have throughout the organization." A. Human capital B. Social capital C. Intellectual capital D. Tacit knowledge
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B. Social capital
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Tacit knowledge A. is the same as explicit knowledge. B. is found mostly at the lower levels of the organization. C. can be codified but not reproduced. D. can be accessed only with the consent of the employees because it is in the minds of the employees.
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D. can be accessed only with the consent of the employees because it is in the minds of the employees.
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New knowledge involves the continual interaction between __________ and __________ knowledge. A. intellectual; pragmatic B. theoretical; practical C. tacit; explicit D. detailed; tacit
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C. tacit; explicit
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Recently, a knowledge worker's loyalty to his or her employing firm has __________ compared to his or her loyalty to his or her profession and colleagues. A. increased B. decreased C. remained the same D. no correlation when
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B. decreased
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The text discusses three areas a firm must be concerned with in order to keep their best and brightest employees from leaving. These include all of the following EXCEPT A. hiring/selecting. B. sorting/absorbing. C. developing. D. retaining.
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B. sorting/absorbing.
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Managing a knowledge intensive workforce is very challenging. The best way for a firm to manage its workforce is to A. retain knowledge workers. B. attract the brightest employees. C. balance efforts in the attraction, selection, and retention of top talent. D. ensure that it pays higher salaries than its rivals.
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C. balance efforts in the attraction, selection, and retention of top talent.
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Firms must compete for top talent. When attracting and selecting employees, firms must strive to select the best fit for both the employee and the firm. In an effort 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. use a pre-interview quiz or "bozo filter" (e.g., Cooper Software). C. only let lower level employees interview job candidates. D. refrain from hiring by referrals from present employees.
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B. use a pre-interview quiz or "bozo filter" (e.g., Cooper Software).
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Many companies use referrals by current employees as a source for new hiring and even monetarily reward them for the following reasons: A. it is less expensive than the fees paid to headhunters. B. current employees are normally very careful in recommending someone because their credibility is on the line. C. it is a good test of employee loyalty. D. both because current employees are careful in their recommendations because of their credibility and also because it is less expensive than the fees paid to headhunters.
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D. both because current employees are careful in their recommendations because of their credibility and also because it is less expensive than the fees paid to headhunters.
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ABC, Incorporated desires to have the most qualified people in every position throughout its organization. This is an example of a concern for A. developing human capital. B. developing social networks. C. decreasing labor intensive training. D. leveraging organizational structure.
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A. developing human capital.
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Developing human capital is essential to maintaining a competitive advantage in today's knowledge economy. Efforts and initiatives to develop human capital should be directed A. at top managers. B. at human resource departments. C. at the employees themselves. D. throughout the firm at all levels.
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D. throughout the firm at all levels.
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Maintaining a competitive workforce is very challenging in today's economy. The role of evaluating human capital, in recent years, has A. increased. B. decreased. C. become less important. D. remained the same.
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A. increased.
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In a 360-degree evaluation and feedback system, __________ rate a person's skill and performance. A. superiors B. direct reports C. colleagues D. all of these
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D. all of these
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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. make their work environment less stimulating. D. adopt effective retention strategies.
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D. adopt effective retention strategies.
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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. refrain from training individual employees. C. establish practices that will enhance employee retention. D. none of these.
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C. establish practices that will enhance employee retention.
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The least effective way to retain human capital is A. encouraging employee identification with organizational mission and goals. B. requiring employees to sign agreements that prevent them from working for competitors in the future. C. providing employees with a challenging and stimulating work environment. D. providing employees with financial and nonfinancial rewards and incentives.
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B. requiring employees to sign agreements that prevent them from working for competitors in the future.
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Generally, employees are most likely to stay with an organization if A. the employer provides high salaries to technology professionals. B. the organization's mission and values align with the employee's mission and values. C. the firm is in a high tech industry. D. the mission and values of the organization change often.
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B. the organization's mission and values align with the employee's mission and values.
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Many successful firms use internal labor markets. The most important reason they do this is because A. they want to encourage job rotation. B. if an employee is in the same department for too long, he/she would become indispensable. C. they want to keep highly mobile employees motivated and challenged. D. an employee who moves too much can be identified as unreliable and eliminated.
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C. they want to keep highly mobile employees motivated and challenged.
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All of the following are the benefits of diversity in a firm's workforce except: A. Creativity Argument. B. Problem-Solving Argument. C. Resource Acquisition Argument. D. Similarity in Perspectives Argument.
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D. Similarity in Perspectives Argument.
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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 accomplished through 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.
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C. encouraging the sharing of ideas between employees in the firm.
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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. strategically competitive hiring. D. knowledge integration.
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B. the "Pied Piper effect."
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Social capital is a source of strength to many firms. Firms leverage their social capital in an effort to create competitive advantages. A firm's social capital is based on A. an employee's individual abilities. B. the relationships among a firm's employees. C. a firm's allocation of financial resources. D. an individual's knowledge.
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B. the relationships among a firm's employees.
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Social network analysis is helpful because the configuration of group members' social ties within and outside the group affects the extent to which members connect to individuals who do all of the following EXCEPT: A. convey needed resources. B. ensure that everyone has the same perspective on strategic and operational issues. C. have the opportunity to exchange information and support. D. have the motivation to treat each other in positive ways.
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B. ensure that everyone has the same perspective on strategic and operational issues.
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In social network analysis __________ stress(es) the importance of ties connecting heterogeneous people, helping to ensure a wide range of diversity in information and perspective. A. closure B. redundancy C. bridging relationships D. social supports
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C. bridging relationships
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In social network analysis, high levels of __________ often come at a price. For example, groups can become too insular and fail to share what they have learned with people outside the group. A. bridging relationships B. intellect C. closure D. diverse knowledge
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C. closure
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Advantages of effective social networks for career success include all of the following EXCEPT A. access to private information. B. access to diverse skill sets. C. greater power. D. greater redundancy in knowledge sources.
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D. greater redundancy in knowledge sources.
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Among the downsides of social capital is/are: A. high social capital may breed "groupthink," i.e., a tendency not to question shared beliefs. B. socialization processes whereby individuals are socialized into the norms and values of the organization may become expensive. C. individuals may become less willing to collaborate on joint projects. D. social capital may both breed "groupthink" and the socialization processes to create it (orientation, training, etc.) can be expensive
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D. social capital may both breed "groupthink" and the socialization processes to create it (orientation, training, etc.) can be expensive
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Social capital has many potential benefits. However, according to the text, social capital A. is always beneficial to a firm. B. may or may not be beneficial to a firm. C. usually restricts the productivity of employees. D. always hurts firm performance.
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B. may or may not be beneficial to a firm.
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The use of information technology (e.g., e-mail) has increased in recent years in many organizations. This has helped to A. communicate information efficiently. B. make more effective use of time in every situation. C. restrict social network growth. D. create smaller social networks.
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A. communicate information efficiently.
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The creation of knowledge assets is typically characterized by A. high upfront costs and subsequent high variable costs. B. high fixed costs and high variable costs. C. low upfront costs and high variable costs. D. high upfront costs and low variable costs.
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D. high upfront costs and low variable costs.
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Mary Stinson was required to take over a project after the entire team left the company. She was able to reconstruct what the team had accomplished through reading e-mails exchanged by the previous team's members. This is an example of A. using explicit knowledge. B. inefficient use of information management. C. using tacit knowledge. D. all of these.
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A. using explicit knowledge.
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The management of intellectual property involves all of the following EXCEPT A. patents. B. contracts with confidentiality and noncompete clauses. C. converting explicit knowledge to tacit knowledge. D. copyrights and trademarks.
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C. converting explicit knowledge to tacit knowledge.
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Dynamic capabilities include all of the following EXCEPT: A. learning and innovating. B. the ability of an organization to challenge the conventional industry in its industry and market. C. becoming more efficient in operational processes. D. continuously adopting new ways of serving the evolving needs of the market.
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C. becoming more efficient in operational processes.
