Answer & Question : According to the text, for most of the 20th century, managerial efforts were directed more toward the efficient allocation of labor and capital, which are the two traditional factors of production.

According to the text, for most of the 20^th century, managerial efforts were directed more toward the efficient allocation of labor and capital, which are the two traditional factors of production.

TRUE

For most of the 20^th century, managers focused on tangible resources such as land, equipment, and money as well as intangibles such as brands, image, and customer loyalty. Efforts were directed more toward the efficient allocation of labor and capital, which are the two traditional factors of production.

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

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

In the knowledge economy, wealth is increasingly created by effective management of knowledge workers, instead 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, in essence, buying a set of talents, capabilities, skills, and ideas (intellectual capital) not physical and financial resources.

3.	The more reliance a firm has on intellectual capital, the closer its book value will be to its market value. FALSE The gap between the market value and book value of a firm is far greater for knowledge-intensive corporations than for firms with strategies based primarily on tangible assets.

4.	The difference between the market value and book value of a firm is its social capital. FALSE Social capital is the network of relationships that individuals have throughout the organization.

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

In the current economy, reliance on the three traditional financial statements (income statement, balance sheet, and statement of cash flow) has increased.

FALSE

In 1978 the book value for U.S. companies was 95 percent of market value. However, market values and book values have diverged significantly. Within 20 years, the S&P industrials were, on average, trading at 2.2 times book value. Robert A. Howell, an expert on the changing role of finance and accounting, suggests that the big three financial statements are about as useful as an 80-year-old Los Angeles road map.

Firms such as Apple and Google will tend to have a higher ratio of market value to book value than industrial companies such as Nucor Steel.

TRUE

As shown in Exhibit 4.1, firms such as Apple and Google 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, have relatively low market to book ratios.

Creation of new knowledge typically involves the continual interaction of explicit and tacit knowledge.

TRUE

New knowledge is constantly created through the continual interaction of explicit knowledge (knowledge that is codified, documented, easily reproduced, and widely distributed, such as engineering drawings, software code, and patents) and tacit knowledge (knowledge that is in the minds of employees and is based on their experiences and backgrounds).

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

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

FALSE

Firms can identify top performers by focusing on key employee mind-sets, attitudes, social skills, and general orientations. If they get these elements right, the task-specific skills can be learned quickly. This does not imply that task-specific skills are unimportant; rather, it suggests that the requisite skill sets must be viewed as a necessary but not a sufficient condition.

10.

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

11.

Companies have found that referrals from their own employees are generally an effective approach to recruiting top talent.

TRUE

Companies like GE Medical Systems have found that current employees are the best source for new ones. When someone refers a former colleague or friend for a job, his or her credibility is on the line. Employees are careful recommending people unless they are reasonably confident they are good candidates.

12.

The Millennial generation expects employers to provide incentives to attract and retain them. A company that does this will have a competitive advantage.

TRUE

This generation has also been termed Generation Y or Echo Boom and includes people that were born after 1982. Many call them impatient, demanding, or entitled. However, if employers do not provide incentives to attract and retain young workers, somebody else will. Thus, they will be at a competitive disadvantage.

13.

Millennials value hard work and will rarely use vacation time.

FALSE

Millennials strive for more work-life balance, so liberal vacations become very important. They also want assurances that they can use it. At KPMG, 80 percent of employees used 40 hours of paid time off in the first six months of a recent year.

14.

In most effective evaluation and reward systems employees only receive evaluation and feedback from their immediate supervisor.

FALSE

As organizations continue to push responsibility downward, traditional top-down appraisal systems become insufficient. 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 a person.

15.

360-degree evaluation and feedback systems address many of the limitations of traditional approaches of evaluating human capital.

TRUE

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 a person's performance. The 360-degree feedback system complements teamwork, employee involvement, and organizational flattening.

16.

360-degree evaluation systems are not useful due to the need to integrate large amounts of feedback.

FALSE

The 360-degree feedback system complements teamwork, employee involvement, and organizational flattening. As organizations continue to push responsibility downward, traditional top-down appraisal systems become insufficient.

17.

The most effective method of improving retention of top talent at a firm is to intensify its hiring efforts.

FALSE

Stepped-up recruiting is a poor substitute for weak retention. Today, 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.

18.

An internal work opportunity market for employees is one means of increasing employee retention.

TRUE

One way firms keep highly mobile employees motivated and challenged is through opportunities that lower barriers to employee mobility within a company. For example, Shell Oil Company has created an open sourcing model for talent. Jobs are listed on the Shell intranet; with a two-month notice, employees can go to work on anything that interests them.

19.

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.

FALSE

Paying people more is seldom the most important factor in attracting and retaining human capital. Most surveys show that money is not the most important reason why people take or leave jobs, and that money, in some surveys, is not even in the top 10.

20.

Workforces that reflect demographic changes will become more homogeneous over the next few decades with regard to gender, race, ethnicity, and nationality.

FALSE

Demographic trends and accelerating globalization of business make management of cultural differences a critical issue. Workforces that reflect demographic changes in the overall population will be increasingly heterogeneous along dimensions such as gender, race, ethnicity, and nationality.

Answer & Question

Monday 3 June 2019

According to the text, for most of the 20th century, managerial efforts were directed more toward the efficient allocation of labor and capital, which are the two traditional factors of production.

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