Student name:__________

TRUE/FALSE - Write 'T' if the statement is true and 'F' if the statement is false.
1) 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.

⊚ false

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

⊚ false

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

⊚ false

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

⊚ false

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

⊚ false

6) 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.

⊚ true

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7) 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.

⊚ false

8) 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.

⊚ false

9) 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.

⊚ true

10) 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.

⊚ true

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

⊚ false

12) 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.

⊚ false

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

⊚ false

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

⊚ true

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

⊚ true

16) 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.

⊚ false

17) 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.

⊚ true

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

⊚ false

19) 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

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

⊚ false

21) Functional and operational routines that drive competitive success in stable conditions
such as supply chain management and access to distribution channels can become obsolete
rapidly.

⊚ true

22) One of the differences between physical assets and intellectual property is that the later
can be stolen by simply broadcasting it.

⊚ true

23) The reason women have more difficulty networking than men is that it is difficult for
women to find sponsors to make introductions and referrals because there are relatively few
women in leadership positions.

⊚ true

24) The “likes -attract-like” principle means that men have to work harder to build
relationships with decision makers and influential stakeholders than women because many
organization senior ranks are heavily populated by women.

⊚ false

25) In order to diversify its candidate pool for early-career roles that can be a fast track to
management, Unilever PLC, decided to partner with digital HR service providers to digitize the
first steps in campus recruiting, thus eliminating traditional campus recruiting.

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 ⊚ true

26) The main reason Toyota Motor Corporation opened the Toyota Research Institute in Los
Altos, California; Cambridge, Massachusetts; and Ann Arbor, Michigan is because the pleasant
weather experienced by all of these cities tends to attract Millennials.

⊚ false

27) Understanding why employees leave an organization is not essential information for
company recruiting strategies.

⊚ false

MULTIPLE CHOICE - Choose the one alternative that best completes the statement or
answers the question.
28) Employers face many challenges when searching for talent. Which of the following is
not one of those challenges?

B) The supply of talented young professionals in software is saturated.

29) 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

C) intangible resources.

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

B) more

31) 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
demonstrated a 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

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 D) non-physical.

32) 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.

D) be larger than

33) 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.

C) high; knowledge

34) 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

B) attracting and retaining knowledgeable workers.

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

C) Microsoft

36) Human capital includes

C) capabilities, knowledge, and skills of an individual.

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

C) human

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

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B) Social capital

39) Tacit knowledge

B) can be accessed only with the consent of the employees.

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

C) tacit; explicit

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

C) tacit

42) 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.

C) decreased

43) 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

C) sorting/absorbing.

44) 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. Which of the following processes is not likely to be an important factor in assuring
this result?

D) retaining

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

C) balance efforts in attraction, selection, and retention of top talent.

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46) 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

C) use a pre-interview quiz.

47) Companies that want to attract top talent often receive thousands of applications each
year. Today, ________ and ________ ________ are used increasingly to improve talent
selection.

C) technology; data analytics

48) 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.

49) Toyota Research Institute (TRI) wants to innovate in areas such as robotics and
autonomous driving. They have locations in three locations because

B) coveted candidates prefer to stay in their current location closer to their research
universities.

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

C) incentives; disadvantage

51) 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

C) throughout the firm at all levels.

52) 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.

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

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B) increased.

54) 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

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

B) family

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

C) adopt effective retention strategies.

57) The least effective way to retain human capital is to

C) require employees to sign agreements that prevent them from working for competitors in
the future.

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

D) mission; values

59) 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
________.

D) predictive; reactive

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60) 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. Some
companies 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

61) 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
effectiveness of an organization and its competitive advantages include all but one of the
following

D) problem creation

62) 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 by

C) encouraging the sharing of ideas between employees in the firm.

63) 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

B) the Pied Piper effect.

64) 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

B) relationships among the employees of the firm.

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

D) emigration; start-up ventures

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66) 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.

B) social relationships

67) 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.

C) harder

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 ________
to leave the organization because of the loyalties and social ties that they develop over time.

D) more likely; less likely

69) 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.

C) tacit; more

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

D) greater

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

C) attraction; development; retention of

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

D) social capital.

73) 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 who
do all of the following except

C) ensure that everyone has the same perspective on strategic and operational issues.

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74) 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

D) bridging relationships.

75) 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

B) closure.

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

B) greater redundancy in knowledge sources.

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

A) High social capital may breed groupthink.

78) 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.
These people are not necessarily at the top of the hierarchy or even experts in their fields.

B) brokers

79) 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.

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

B) social

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

B) private information from personal contacts.

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

D) groupthink

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

B) communicate information efficiently.

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

D) updates on corporate intelligence.

85) 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.

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

D) internal; external

87) The Cisco Integrated Workforce Experience (IWE) platform makes recommendations
based on all the following except

D) competitor choices.

88) The dangers of email include all of the following except

B) almost costless.

89) Sharing knowledge and information throughout the organization can be a means of

C) conserving resources.

90) Technology can be used to leverage ________ and ________ within organizations as
well as with customers and suppliers beyond their boundaries.

B) human capital; knowledge

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91) Technology can be used to leverage human capital and knowledge within organizations
as well as with ________ and ________ beyond their boundaries.

C) customers; suppliers

92) The creation of knowledge assets is typically characterized by

C) high upfront costs and low variable costs.

93) 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 emails exchanged
by the members of the team. This is an example of

B) using explicit knowledge.

94) Which of the following is not a characteristic of e-teams?

D) E-teams generally perform simple tasks.

95) There are multiple advantages of e-teams. Which of the following is not an advantage?

C) Process losses result from identification and combination activities.

96) There are multiple challenges associated with making effective e-teams. Which of the
following is not a challenge?

B) E-teams can be effective in generating social capital.

97) The potential for ________ tends to be more prevalent in e-teams than in traditional
teams because the geographic dispersion of members increases the complexity of establishing
effective interaction and exchanges.

C) process losses

98) In general, teams suffer process loss because of ________ cohesion, ________ trust
among members, a lack of appropriate norms or standard operating procedures, or a lack of
shared understanding among team members about their tasks.

D) low; low

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99) Access Health, a call-in medical center, uses technology to capture and share knowledge.
When someone calls the center, a registered nurse uses the company clinical decision
architecture to assess the caller symptoms, rule out possible conditions, and recommend a home
remedy, doctor visit, or trip to the emergency room. This is an example of using

B) a knowledge asset.

100) When an organization tries to improve cycle times in a manufacturing process, it finds far
more value in problem solving shaped by the diverse experiences, perspectives, and learning of a
tightly knit team than in a training manual alone. SAP uses these ________ flows to gain
competitive advantage.

C) knowledge

101) SAP uses ________ to leverage the expertise and involvement of its users in developing
new knowledge and then transmitting it to the entire SAP user community.

B) crowdsourcing

102) Software algorithms are a form of ________ that, once developed and paid for, can be
reused many times at a very low cost.

C) knowledge asset

103) When a firm develops a knowledge asset, such as a process, pays for it and reuses it over
and over at a very low cost, this adds ________ for the firm.

C) a competitive advantage

104) The management of intellectual property involves all of the following except

C) converting explicit knowledge to tacit knowledge.

105) Dynamic capabilities include all of the following except

B) becoming more efficient in operational processes.

106) Which of the following is not an example of an IP-related litigation?

D) The United States sues to get access to physical plant assets in China.

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107) Protecting company intellectual property can be difficult because employees become
disgruntled and patents

C) expire.

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

C) more difficult

109) IP is characterized by ________ development costs and very ________ marginal costs.

C) significant; low

110) Unlike ________ assets, intellectual property can be stolen by simply broadcasting it.

C) physical

111) Using an idea does not prevent others from simultaneously using it for their own benefit.
Typically, this is impossible with ________ assets.

C) physical

112) Which of the following is an IP-heavy industry?

B) telecommunications

113) Which of the following is not a dynamic capability?

D) the ability to submit to conventional industry and market wisdom

114) The best protection for intellectual property in the long run is likely to be the
development of

C) dynamic capabilities.

115) The dynamic capabilities view maintains that success in ________ industries requires
capabilities that enable companies to anticipate, shape, and adapt to shifting competitive
landscapes.

C) volatile

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116) Dynamic capabilities, therefore, define the ability of the firm to innovate, adapt, and
foster change that is favorable to ________ and unfavorable to ________.

C) customers; competitors

117) Which of the following is not one of the primary activities included in dynamic
capabilities?

B) monitoring

118) IP is characterized by significant ________ costs and very low ________ costs.

C) development; marginal

119) By using AI in its hiring process, Unilever has improved its hiring process for many
reasons except which one of the following?

B) 80 percent of applicants who make it to job interviews are not offered jobs.

120) Dynamic ________ helps to explain competitive advantage in ________ industries.

B) capabilities; volatile

121) According to Herminia Ibarra, a leading scholar, the three tactics women can use to be
more successfully engaged in networking activities does not include

D) joining a professional network of men.

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