E2.2

70) 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.

A) High social capital may breed groupthink.

79) 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.

A) facilitate internal and external collaboration.

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

A) high-value; skill; lower

73) 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.

A) it can help provide more complete and unbiased perspectives on issues.

46) 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

A) monitoring and tracking employee development

44) 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.

A) received a better alternate job offer.

40) 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.

A) seek to make a social or environmental difference in the world.

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.

Answer: FALSE

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

Answer: 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.

Answer: FALSE

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

Answer: FALSE

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.

Answer: FALSE

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

Answer: FALSE

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

Answer: FALSE

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

Answer: FALSE

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

Answer: FALSE

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

Answer: FALSE

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

Answer: FALSE

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

Answer: FALSE

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.

Answer: 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.

Answer: FALSE

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.

Answer: TRUE

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

Answer: TRUE

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

Answer: TRUE

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.

Answer: TRUE

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.

Answer: TRUE

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.

Answer: TRUE

90) There are multiple challenges associated with making effective e-teams. Which of the following is not a challenge? A) Process losses result from identification and combination activities. B) E-teams can be effective in generating social capital. C) The physically dispersed team is susceptible to the risk factors that can create process loss. D) Some collective energy, time, and effort must be devoted to dealing with team inefficiencies.

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

72) 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.

B) Picasso had a wider range of social connections and bridging relationships.

30) ________ is the network of relationships that individuals have throughout the organization. A) Human capital B) Social capital C) Intellectual capital D) Tacit knowledge

B) Social capital

93) 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 A) tacit knowledge. B) a knowledge asset. C) a non-codified asset. D) groupthink.

B) a knowledge asset.

82) The dangers of email include all of the following except A) spreading of rumors. B) almost costless. C) uncontrollable distribution. D) personal time waster.

B) almost costless.

26) 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.

B) attracting and retaining knowledgeable workers.

99) Dynamic capabilities include all of the following except A) learning and innovating. B) becoming more efficient in operational processes. C) the ability of an organization to challenge the conventional industry in its industry and market. D) continuously adopting new ways of serving the evolving needs of the market.

B) becoming more efficient in operational processes.

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

B) brokers

31) 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.

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

68) 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.

B) closure.

77) 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.

B) communicate information efficiently.

95) 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. A) tacit knowledge B) crowdsourcing C) algorithms D) intellectual capital

B) crowdsourcing

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

B) family

69) 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.

B) greater redundancy in knowledge sources.

84) Technology can be used to leverage ________ and ________ within organizations as well as with customers and suppliers beyond their boundaries. A) human capital; intellectual capital B) human capital; knowledge C) knowledge; social capital D) communication; social capital

B) human capital; knowledge

45) 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.

B) increased.

22) 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

B) more

75) 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.

B) private information from personal contacts.

108) Dynamic capabilities include ________ development, alliances, and acquisitions. A) after-market B) product C) idea D) company

B) product

41) 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

B) recruiting

57) 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.

B) relationships among the employees of the firm.

74) 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

B) social

59) 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

B) social relationships

106) Which of the following is an IP-heavy industry? A) automobile sales B) telecommunications C) contract manufacturing D) retailing

B) telecommunications

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.

B) the Pied Piper effect.

87) 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 A) inefficient use of information management. B) using explicit knowledge. C) using tacit knowledge. D) using replicated knowledge.

B) using explicit knowledge.

27) 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

C) Microsoft

89) There are multiple advantages of e-teams. Which of the following is not an advantage? A) E-teams are less restricted by the geographic constraints that are placed on face-to-face teams. B) E-teams can be more flexible in responding to unanticipated work challenges and opportunities. C) Process losses result from identification and combination activities. D) E-teams can be effective in generating social capital.

C) Process losses result from identification and combination activities.

97) 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. A) tacit knowledge B) little value C) a competitive advantage D) a recoverable loss

C) a competitive advantage

48) 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.

C) adopt effective retention strategies.

64) 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

C) attraction; development; retention of

37) 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.

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

28) 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.

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

83) Sharing knowledge and information throughout the organization can be a means of A) conserving products and services. B) continuing with outdated products. C) conserving resources. D) overusing email.

C) conserving resources.

98) The management of intellectual property involves all of the following except A) copyrights and trademark. B) contracts with confidentiality and non-compete clauses. C) converting explicit knowledge to tacit knowledge. D) patents.

C) converting explicit knowledge to tacit knowledge.

39) 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.

C) current employees are careful in their recommendations and it is less expensive than paying headhunters.

85) Technology can be used to leverage human capital and knowledge within organizations as well as with ________ and ________ beyond their boundaries. A) employees; clients B) customers; employees C) customers; suppliers D) employees; suppliers

C) customers; suppliers

34) 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

C) decreased

109) The best protection for intellectual property in the long run is likely to be the development of A) new products. B) stronger patents. C) dynamic capabilities. D) international patents.

C) dynamic capabilities.

55) 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 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.

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

66) 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 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.

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

101) Protecting company intellectual property can be difficult because employees become disgruntled and patents A) are expensive. B) cannot be protected. C) expire. D) roll over.

C) expire.

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

C) harder

86) 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) high upfront costs and low variable costs. D) low upfront costs and high variable costs.

C) high upfront costs and low variable costs.

25) 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

C) high; knowledge

29) Creativity and problem-solving ability are considered to be part of ________ capital. A) physical B) social C) human D) emotional

C) human

42) 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

C) incentives; disadvantage

21) 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.

C) intangible resources.

94) 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. A) knowledge stocks B) knowledge assessments C) knowledge D) tacit

C) knowledge

96) Software algorithms are a form of ________ that, once developed and paid for, can be reused many times at a very low cost. A) tacit asset B) intangible asset C) knowledge asset D) social asset

C) knowledge asset

102) Intellectual property rights are ________ to define and protect than property rights for physical assets (e.g., plant, equipment, and land). A) easier B) more costly C) more difficult D) less difficult

C) more difficult

104) Unlike ________ assets, intellectual property can be stolen by simply broadcasting it. A) intangible B) hidden C) physical D) expensive

C) physical

105) Using an idea does not prevent others from simultaneously using it for their own benefit. Typically, this is impossible with ________ assets. A) intangible B) strong C) physical D) flimsy

C) physical

91) 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. A) team harmony B) trust C) process losses D) profit gains

C) process losses

50) 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.

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

103) IP is characterized by ________ development costs and very ________ marginal costs. A) insignificant; low B) expensive; high C) significant; low D) insignificant; high

C) significant; low

35) 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.

C) sorting/absorbing.

33) 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

C) tacit

32) New knowledge involves the continual interaction between ________ and ________ knowledge. A) intellectual; pragmatic B) theoretical; practical C) tacit; explicit D) detailed; tacit

C) tacit; explicit

62) 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

C) tacit; more

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.

C) throughout the firm at all levels.

38) 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.

C) use a pre-interview quiz.

88) Which of the following is not a characteristic of e-teams? A) E-team members either work in geographically separated workplaces or may work in the same space but at different times. B) E-teams may have members working in different spaces and time zones. C) Most of the interactions among members of e-teams occur through electronic communication channels. D) E-teams generally perform simple tasks.

D) E-teams generally perform simple tasks.

100) Which of the following is not an example of an IP-related litigation? A) Apple and HTC sue each other based on patent infringement. B) Apple sues smartphone makers running Android, the Google mobile operating system. C) China is sued by U.S. manufacturers of video games. D) The United States sues to get access to physical plant assets in China.

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

24) 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

D) be larger than

67) 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.

D) bridging relationships.

81) The Cisco Integrated Workforce Experience (IWE) platform makes recommendations based on all the following except A) what you are doing. B) the role you are in. C) the choices of people like you. D) competitor choices.

D) competitor choices.

58) 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

D) emigration; start-up ventures

49) 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.

D) establish practices that will enhance employee retention.

63) 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

D) greater

76) 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

D) groupthink

80) 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

D) internal; external

92) 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. A) high; high B) low; high C) high; low D) low; low

D) low; low

51) 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

D) mission; values

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

D) more likely; less likely

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

D) non-physical.

52) 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

D) predictive; reactive

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

D) problem creation

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

D) retaining

65) 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.

D) social capital.

107) Which of the following is not a dynamic capability? A) the ability to sense and seize new opportunities B) the ability to generate new knowledge C) the ability to reconfigure existing assets D) the ability to submit to conventional industry and market wisdom

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

78) 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.

D) updates on corporate intelligence.