Answer & Question : The makeup of goods and services in the Gross Domestic Products of developed countries has changed over the last decade. More than 50 percent of the value of GDP of developed countries is based on ____

37.

The makeup of goods and services in the Gross Domestic Products of developed countries has changed over the last decade. More than 50 percent of the value of GDP of developed countries is based on _____.

A.	clothing and apparel

B.	capital accumulation

knowledge

D.	financial management

Today, more than 50 percent of the gross domestic product (GDP) in developed economies is knowledge-based; it is based on intellectual assets and intangible people skills.

AACSB: Analytic
Blooms: Understand
Learning Objective: 04-01 Why the management of knowledge professionals and knowledge itself are so critical in today's organizations.
Level of Difficulty: 2 Medium
Topic: The Central Role of Knowledge in Today's Economy

38.

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

For most of the 20^th century, managers focused on tangible resources such as land, equipment, and money and intangibles like brands, image, and customer loyalty. Today, more than 50 percent of the GDP in developed economies is knowledge-based; it is based on intellectual assets and intangible people skills.

39.

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

In the knowledge economy, wealth is increasingly created by effective management of knowledge workers instead of by efficient control of physical and financial assets. The growing importance of knowledge, coupled with the move by labor markets to reward knowledge work, tells us that investing in a company is buying a set of talents, capabilities, skills, and ideas (intellectual capital), not physical and financial resources.

40.

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.	be larger than

C.	be smaller than

D.	not be correlated with

In firms where knowledge and the management of knowledge workers are relatively important contributors to developing products and services, and physical resources are less critical, the ratio of market-to-book value tends to be much higher.

41.

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.	decreasing labor costs

C.	attracting and retaining knowledgeable workers

D.	increasing the turnover of employees

Companies create value in the knowledge-intensive economy, and thus intellectual capital, by attracting and leveraging human capital effectively through mechanisms that create products and services of value over time.

42.

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

Apple

Google

C.	Southwest Airlines

D.	Nucor (steel)

As shown in Exhibit 4.1, firms such as Apple, Google, Microsoft, and Oracle have very high market value to book value ratios, because of their high investment in knowledge resources and technological expertise. In contrast, firms in more traditional industry sectors such as Nucor and Southwest Airlines have relatively low market to book ratios.

AACSB: Analytic
Blooms: Apply
Learning Objective: 04-01 Why the management of knowledge professionals and knowledge itself are so critical in today's organizations.
Level of Difficulty: 3 Hard
Topic: The Central Role of Knowledge in Today's Economy

43.

Human capital includes ________________.

A.	the relationships between people

B.	an individual's capabilities, knowledge, and skills

C.	the output from assembly line employees

D.	an improved product

Human capital is the individual capabilities, knowledge, skills, and experience of the company employees and managers. This knowledge is relevant to the task at hand, as well as the capacity to add to this reservoir of knowledge, skills, and experience through learning.

AACSB: Analytic
Blooms: Remember
Learning Objective: 04-01 Why the management of knowledge professionals and knowledge itself are so critical in today's organizations.
Level of Difficulty: 1 Easy
Topic: The Central Role of Knowledge in Today's Economy

44.

Creativity and problem solving ability are considered to be part of ____________.

A.	physical capital

B.	human capital

C.	social capital

D.	emotional capital

45.

The network of relationships that individuals have throughout the organization is known as _____.

A.	human capital

B.	intellectual capital

C.	social capital

D.	tacit knowledge

Social capital is the network of relationships that individuals have throughout the organization. Relationships are critical in sharing and leveraging knowledge and in acquiring resources. Social capital can extend beyond the organizational boundaries to include relationships between the firm and its suppliers, customers, and alliance partners.

46.

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

Tacit knowledge is in the minds of employees and is based on their experiences and backgrounds. It is shared only with the consent and participation of the individual.

47.

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

A.	intellectual; pragmatic

B.	tacit; explicit

C.	theoretical; practical

D.	detailed; tacit

New knowledge is constantly created through the continual interaction of explicit and tacit knowledge. Consider two software engineers working together on a computer code. The computer code is the explicit knowledge.

48.

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.

increased

B.	remained the same

decreased

D.	no correlation when

The rise to prominence of knowledge workers as a vital source of competitive advantage is changing the balance of power in organizations today. Knowledge workers place professional development and personal enrichment (financial and otherwise) above company loyalty.

AACSB: Analytic
Blooms: Understand
Learning Objective: 04-02 The importance of recognizing the interdependence of attracting; developing; and retaining human capital.
Level of Difficulty: 2 Medium
Topic: Human Capital: The Foundation of Intellectual Capital

49.

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.	developing

C.	sorting/absorbing

retaining

Hiring is the first process in which all successful organizations must engage to build and leverage human capital. Firms must also develop employees to fulfill their full potential to maximize joint contributions, and provide the working environment and intrinsic and extrinsic rewards to retain their best and brightest.

AACSB: Analytic
Blooms: Remember
Learning Objective: 04-02 The importance of recognizing the interdependence of attracting; developing; and retaining human capital.
Level of Difficulty: 1 Easy
Topic: Human Capital: The Foundation of Intellectual Capital

50.

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

C.	attract the brightest employees

D.	ensure that it pays higher salaries than its rivals

Attracting, developing, and retaining human capital are highly interrelated activities, like a three-legged stool. If one leg is weak or broken, the stool collapses. To illustrate such interdependence, poor hiring impedes the effectiveness of development and retention processes. In a similar vein, ineffective retention efforts place additional burdens on hiring and development.

51.

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.	only let lower level employees interview job candidates

C.	use a pre-interview quiz

D.	refrain from hiring by referrals from present employees

Alan Cooper, president of Cooper Software, Inc., cleverly uses technology to hone in on the problem-solving ability of his applicants and their attitudes before an interview even takes place. He has devised a Bozo Filter, an online test that can be applied to any industry. Before you spend time on whether job candidates will work out satisfactorily, find out how their minds work.

52.

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.	it is a good test of employee loyalty

D.	current employees are careful in their recommendations and it is less expensive than the fees paid to headhunters

GE Medical Systems offers a monetary reward for referrals, but it is peanuts compared to the fees that it typically pays to headhunters for each person hired. When someone refers a former colleague or friend for a job, his or her credibility is on the line. Thus, employees will be careful in recommending people for employment, unless they are reasonably confident that these people are good candidates.

53.

ABC, Incorporated desires to have the most qualified people in every position throughout its organization. This is an example of a concern for _________.

A.	decreasing labor intensive training

B.	developing social networks

C.	developing human capital

D.	leveraging organizational structure

It is not enough to hire top-level talent and expect that the skills and capabilities of those employees remain current throughout the duration of their employment. Rather, training and development must take place at all levels of the organization, which is considered developing human capital.

AACSB: Analytic
Blooms: Apply
Learning Objective: 04-02 The importance of recognizing the interdependence of attracting; developing; and retaining human capital.
Level of Difficulty: 3 Hard
Topic: Human Capital: The Foundation of Intellectual Capital

54.

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

55.

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

decreased

C.	become less important

increased

In the current environment, collaboration and interdependence are vital to organizational success. Individuals must share their knowledge and work constructively to achieve collective, not just individual, goals. Traditional systems evaluate performance from a single perspective (i.e., top down) and generally do not address the softer dimensions of communications and social skills, values, beliefs, and attitudes.

56.

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

superiors

family

C.	direct reports

D.	colleagues

To address the limitations of the traditional approach, many organizations use 360-degree evaluation and feedback systems. Here, superiors, direct reports, colleagues, and even internal and external customers rate the performance of an employee.

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

Stepped-up recruiting is a poor substitute for weak retention. Leaders can either provide the work environment and incentives to keep productive employees and management from wanting to bail out, or they can use legal means such as employment contracts and noncompete clauses.

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.	refrain from training individual employees

C.	establish practices that will enhance employee retention

D.	keep employees in the same position forever

Since attracting and developing talent represent an investment to a firm, it is necessary to ensure the third step is also done to fully leverage the human capital. A firm must also retain the talent.

59.

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

For retention of talent, greater efforts should be directed at a good work environment and incentives, although employment contracts and noncompete clauses may sometimes have their place.

60.

Generally, employees are most likely to stay with an organization if _____________.

A.	the employer provides high salaries to technology professionals

B.	the firm is in a high tech industry

C.	the organization mission and values align with the employees mission and values

D.	the mission and values of the organization change often

People who identify with and are more committed to the core mission and values of the organization are less likely to stray or bolt to the competition. Paying people more is seldom the most important factor in attracting and retaining human capital.

Answer & Question

Monday, 3 June 2019

The makeup of goods and services in the Gross Domestic Products of developed countries has changed over the last decade. More than 50 percent of the value of GDP of developed countries is based on _____.

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