Test bank for strategic management creating competitive advantages 8th edition by myrtle.flores105

Test Bank for Strategic Management: Creating Competitive Advantages 8th Edition

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Chapter 04 Recognizing a Firm's Intellectual Assets: Moving beyond a Firm's Tangible Resources

True / False Questions 1.

According to the text, for most of the 20 th century, managerial efforts were directed more toward the efficient allocation of labor and capital. True

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. True

False

Social capital does not extend beyond the organizational boundaries to include relationships between the firm and its suppliers, customers, and alliance partners. True

False

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

False

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

False

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

False

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

False

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

False

Explicit knowledge is in the mind of employees and is based upon their experiences and backgrounds. True

False

10. The gap between company market value and book value is far greater for knowledge-intensive corporations than for firms with strategies based primarily on intangible assets. True

False

11. 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 lower. True

False

12. Firms in more traditional industry sectors such as Nucor and General Motors have relatively low market-tobook ratios. This reflects their greater investment in knowledge resources and lower investment in physical resources. True

False

13. A firm like Intel has a market-to-book value ratio that falls between Apple-Microsoft and Nucor-General Motors. This is because its low level of investment in knowledge resources is matched by a correspondingly huge investment in plant and equipment. True

False

14. Knowledge workers are more loyal to their companies than traditional workers. True

False

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

False

16. 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

False

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

False

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

False

19. Millennials value hard work and will rarely use vacation time. True

False

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

False

21. The 360-degree evaluation and feedback system addresses many of the limitations of traditional approaches to evaluating human capital. True

False

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

False

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

False

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

False

25. 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. True

False

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

False

27. Social capital is found in the knowledge, skills, and abilities of individual employees. True

False

28. 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. True

False

29. 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. True

False

30. 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

False

31. Knowledge-based resources tend to be more explicit in nature. True

False

32. If employees are working effectively in teams and sharing their knowledge and learning from each other, not only will they be less likely to add value to the firm, but they also will be more likely to leave the organization, because of the loyalties and social ties that they develop over time. True

False

33. Hiring via personal networks is a trend in which job recruiters look for candidates at the crux of social relationships in organizations because they have the potential to bring valuable colleagues with them. True

False

34. Human capital mobility caused by social relationships occurs when talent emigrates from an organization to form start-up ventures. True

False

35. When Michael Reene left Andersen Consulting, eventually he joined Third Millennium as CEO with a small salary and 20 percent ownership position. He brought others with him, who brought others with them. This was possible because of the Pied Piper effect. True

False

36. Start-up ventures often are formed by mobile human capital talent. True

False

37. Unique bundles of resources can contribute to employee competitive advantages. True

False

38. Hiring organizations can be amorphous, distant and threatening entities and therefore detractors for knowledge workers. True

False

39. Social capital helps organizations leverage human capital within and across the firm. True

False

40. 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

False

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

False

42. In bridging relationships in social networks, one member is central to the communication flows in a group. True

False

43. Closure, in contrast to bridging relationships, stresses the importance of ties connecting heterogeneous people. True

False

44. From the individual perspective, social networks deliver three unique advantages: private information, access to diverse skill sets, and power. True

False

45. 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. True

False

46. The role of technology in the recruitment of human capital has lowered individual reliance on the use of social networks. True

False

47. Connectors are people to have a unique ability to link people, ideas and resources and are rarely useful for business because they maintain only personal connections that are not transferable. True

False

48. John wanted to set up a nurse-led preoperative assessment service intended to free up time for the doctors who previously led the assessments, reduce cancelled operations (and costs), and improve patient care. Carol, a well-respected nurse, had less seniority than John, but many colleagues relied on her advice about navigating hospital politics. She knew many of the people whose support John needed and she eventually converted them to the change. This is an example of a connector. True

False

49. Social networks such as Facebook do not facilitate increased interactions between members in a social network via Internet-based communications. True

False

50. In social network analysis, a person who has no linkages to others in the network is labeled a conformist. True

False

51. Burt studied several hundred managers in the Raytheon supply chain group and asked them to write down ideas to improve the company supply chain management. Then he asked two Raytheon executives to rate the ideas. The conclusion: The best suggestions consistently came from managers who discussed ideas outside their regular work group. This is an example of a structural hole. True

False

52. Effective collaboration requires overcoming four barriers: the not-invented-here barrier, the hoarding barrier, the search barrier, and the place-setter barrier. True

False

53. The use of email can be distracting to employees. Some firms limit the time that employees spend using email. True

False

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

False

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

False

56. Email can cause embarrassment, as explained by Marshall Goldsmith, executive coach. True

False

57. Deliberate actions to reduce email output consist of forwarding all messages, but limiting the number of recipients. True

False

58. Phone calls can be better than emails for providing real-time feedback on whether a message is being understood. True

False

59. Facial expressions and body language make in-person meetings a rich method of communication, but not significantly better than email in most cases. True

False

60. Top executives should use email for monthly blasts to employees to discuss company health and other specific issues. True

False

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

False

62. Cisco launched Integrated Workforce Experience (IWE) in 2010. It is a social business platform designed to facilitate internal and external collaboration and decentralize decision making. It functions much like a Facebook wall in that a real-time news feed provides updates on employee status and activities as well as information about relevant communities, business projects, and customer and partner interactions. This is a reason to totally eliminate email. True

False

63. The use of communication platforms such as the Cisco Integrated Workforce Experience (IWE) permits companies to push out information where it is needed. True

False

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

False

65. One should only rely on communication platforms and never on email for communicating information. True

False

66. 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. True

False

67. 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

False

68. According to the text, effective e-teams identify group members with a proper balance of technical and interpersonal skills. True

False

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

False

70. Most of the interactions among members of e-teams occur through electronic communication channels such as fax machines and groupware tools such as email, bulletin boards, chat, and videoconferencing. True

False

71. E-teams do not have the potential to acquire a broader range of human capital or the skills and capacities that are necessary to complete complex assignments. True

False

72. Given the narrower boundaries associated with e-teams, members and leaders generally have limited access to a wider range of social contacts than would be typically available in more traditional face-to-face teams. True

False

73. Process losses prevent teams from reaching high levels of performance because of inefficient interaction dynamics among team members. True

False

74. The potential for process losses tends to be less prevalent in e-teams than in traditional teams because the geographic dispersion of members increases the complexity of establishing effective interaction and exchanges. True

False

75. Generally, teams suffer process loss because of low cohesion, low trust among members, a lack of appropriate norms or standard operating procedures, or a lack of shared understanding among team members about their tasks. True

False

76. One of the challenges of knowledge-intensive organizations is to capture and codify the knowledge and experience that, in effect, resides in the heads of its employees. This is known as explicit knowledge. True

False

77. At Accenture, the knowledge of its consultants has been codified and stored in electronic repositories and, therefore, cannot be employed in many jobs by their huge number of consultants. True

False

78. 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 (shared through knowledge flows) than in a training manual (knowledge stocks) alone. True

False

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

False

80. The management of intellectual property (IP) involves, besides patents, contracts with confidentiality and non-compete clauses, copyrights, and the development of trademarks. True

False

81. Intellectual property rights are the tangible property owned by a firm. True

False

82. Developing dynamic capabilities is not the only avenue providing firms with the ability to reconfigure their knowledge and activities to achieve a sustainable competitive advantage. True

False

83. The state must protect intellectual property rights reliably for companies to continue developing new products and services. True

False

84. IP is characterized by significant development costs and very high marginal costs. It may take a substantial investment to develop a software program, an idea, or a digital music tune. True

False

85. Dynamic capabilities include the ability to sense and seize new opportunities, generate new knowledge, and reconfigure existing assets and capabilities. True

False

86. Dynamic capabilities are about the ability of an organization to challenge the non-conventional wisdom within its industry and market. True

False

87. Examples of dynamic capabilities include product development, strategic decision making, alliances, and acquisitions. True

False

88. Cisco Systems has made numerous acquisitions over the years. The combination of the resources of the acquired companies and their reconfiguration that Cisco has already achieved reduces its competitive advantage. True

False

89. As markets become increasingly dynamic, traditional sources of long-term competitive advantage become more relevant. True

False

90. Dynamic capabilities do not allow a firm to create a series of temporary advantages through new resource configurations. True

False

91. Unlike physical assets, intellectual property cannot be stolen by simply broadcasting it. True

False

Multiple Choice Questions 92. 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. C. knowledge. D. financial management. 93. 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. investment capital. D. intangible resources.

94. 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 95. 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 96. 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. 97. Which of the following firms would you expect to have the highest ratio of market value to book value?

A. Apple B. General Motors C. Intel D. Nucor 98. Human capital includes

A. the relationships between people. B. an improved product. C. the output from assembly line employees. D. capabilities, knowledge, and skills of an individual. 99. Creativity and problem solving ability are considered to be part of _________ capital.

A. physical B. human C. social D. emotional

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

A. human capital. B. social capital. C. intellectual capital. D. tacit knowledge. 101. 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. 102. New knowledge involves the continual interaction between __________ and __________ knowledge.

A. intellectual; pragmatic B. tacit; explicit C. theoretical; practical D. detailed; tacit 103. Two software engineers working together on a computer code share their _______ knowledge in order to create new knowledge.

A. explicit B. theoretical C. tacit D. easily reproduced 104. 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 105. 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. D. retaining.

106. 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. 107. 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 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. C. only let lower level employees interview job candidates. D. refrain from hiring by referrals from present employees. 108. 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; it is less expensive than the fees paid to headhunters. 109. QFQ, 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. leveraging organizational structure. D. developing human capital. 110. 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.

111. 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. 112. 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 113. 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. 114. 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. 115. 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. 116. 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. structuring the firm with rigid departmental and employee divisions. D. encouraging the sharing of ideas between employees in the firm.

117. 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. knowledge integration. C. the Pied Piper effect. D. strategically competitive hiring. 118. What is a major reason for Nokia to lose its competitive edge in the cell phone business?

A. The team consisted of scientists from around the world. B. The team consisted of only Finnish scientists. C. All of the work required diverse skill sets. D. Each scientist worked alone, separate from colleagues. 119. 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. allocation of the financial resources of the firm. C. knowledge of an individual. D. relationships among the employees of the firm. 120. 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 121. 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 122. 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 4-14 Copyright © 2016 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education.

123. 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 124. 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; less D. tacit; more 125. 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 126. 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 127. Tying knowledge workers to a firm is part of the objective of the development of

A. intellectual capital. B. explicit knowledge. C. social capital. D. human capital.

128. 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. 129. 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. 130. 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. closure. B. intellect. C. bridging relationships. D. diverse knowledge. 131. Advantages of effective social networks for career success include all of the following except

A. access to private information. B. greater redundancy in knowledge sources. C. access to diverse skill sets. D. greater power. 132. 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. 133. 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.

134. 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. 135. A recent study of over 300 companies explored how management teams can understand and capitalize on the formal and informal social networks of their employees. Six common types of managers who get stuck in three types of network traps were identified. Which of the following is not one of these network traps?

A. the wrong structure B. the wrong relationships C. the wrong behavior D. the wrong business 136. By using the ___________ lever, leaders can build nimble interpersonal networks across the company so that employees are better able to collaborate.

A. unification B. people C. network D. social 137. With the _________ lever, the emphasis is on getting the right people to collaborate on the right projects.

A. network B. unification C. social D. people 138. Effective leaders can choose a mix of three levers. When motivation is the problem, they can use the ___________ lever, wherein they craft compelling common goals, articulate a strong value of crosscompany teamwork, and encourage collaboration in order to send strong signals to lift individual sights beyond their narrow interests toward a common goal.

A. T-shaped management B. people C. network D. unification

139. 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 140. London-based International Power increased firm efficiency by using all but which of the following?

A. forwarding email messages only when strictly necessary B. limiting the email message recipient list C. using the telephone D. eliminating email communication 141. 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. 142. 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. 143. 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 144. The Cisco Integrated Workforce Experience (IWE) platform makes recommendations based on all of the following except

A. what you are doing. B. the role you are in. C. the choices of people like you. D. competitor choices.

145. To increase productivity, several key lessons were learned by top management at London-based International Power concerning email. Which is not in that list of lessons?

A. Executives need to be taught to be more deliberate in their use of email. B. Executives need to set goals for reducing the number of messages sent. C. Executives need to provide weekly feedback. D. Executives need to eliminate email completely. 146. Efficiency killers that London-based International Power identified in their communication using tools from lean manufacturing included

A. overproduction and messages. B. underproduction and defects. C. underproduction and ineffective messages. D. overproduction and defects in messages. 147. The dangers of email include all of the following except

A. spreading of rumors. B. almost costless. C. uncontrollable distribution. D. personal time waster. 148. 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. 149. 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 150. 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

151. 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. 152. 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. 153. Characteristics of e-teams include all of the following except:

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. 154. 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. 155. 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. 156. 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. profit losses D. profit gains 4-20 Copyright © 2016 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education.

157. 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 158. 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. 159. 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 160. 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 161. 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

162. 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 163. 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. 164. 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. 165. 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. 166. 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. 167. 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

168. IP is characterized by __________ development costs and very ______ marginal costs.

A. insignificant; low B. expensive; high C. significant; low D. insignificant; high 169. Unlike ______ assets, intellectual property can be stolen by simply broadcasting it.

A. intangible B. hidden C. physical D. expensive 170. 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 171. Which of the following is an IP-heavy industry?

A. automobile sales B. telecommunications C. contract manufacturing D. retailing 172. 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 173. Dynamic capabilities include ______ development, alliances, and acquisitions.

A. after-market B. product C. idea D. company

174. 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.

Chapter 04 Recognizing a Firm's Intellectual Assets: Moving beyond a Firm's Tangible Resources Answer Key

True / False Questions 1.

According to the text, for most of the 20 th century, managerial efforts were directed more toward the efficient allocation of labor and capital. TRUE For most of the 20th 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: Analytical Thinking Accessibility: Keyboard Navigation 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.

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.

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.

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 Microsoft 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 Microsoft 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 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).

AACSB: Analytical Thinking Accessibility: Keyboard Navigation Blooms: Understand Learning Objective: 04-01 Why the management of knowledge professionals and knowledge itself are so critical in today's organizations. 4-26 Copyright © 2016 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education.

Level of Difficulty: 2 Medium Topic: The Central Role of Knowledge in Today's Economy

Social capital does not extend beyond the organizational boundaries to include relationships between the firm and its suppliers, customers, and alliance partners. FALSE 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.

Explicit knowledge is in the mind of employees and is based upon their experiences and backgrounds. FALSE Tacit knowledge is knowledge that is in the minds of employees and is based on their experiences and backgrounds. Tacit knowledge is shared only with the consent and participation of the individual.

10.

The gap between company market value and book value is far greater for knowledge-intensive corporations than for firms with strategies based primarily on intangible assets. FALSE The gap between company market value and book value is far greater for knowledge-intensive corporations than for firms with strategies based primarily on tangible assets.

11.

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 lower. FALSE 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.

Accessibility: Keyboard Navigation 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

12.

Firms in more traditional industry sectors such as Nucor and General Motors have relatively low market-to-book ratios. This reflects their greater investment in knowledge resources and lower investment in physical resources. FALSE Firms in more traditional industry sectors such as Nucor and General Motors have relatively low market-to-book ratios. This reflects their greater investment in physical resources and lower investment in knowledge resources.

13.

A firm like Intel has a market-to-book value ratio that falls between Apple-Microsoft and NucorGeneral Motors. This is because its low level of investment in knowledge resources is matched by a correspondingly huge investment in plant and equipment. FALSE A firm like Intel has a market-to-book value ratio that falls between Apple-Microsoft and NucorGeneral Motors. This is because its high level of investment in knowledge resources is matched by a correspondingly huge investment in plant and equipment.

14.

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: Analytical Thinking Accessibility: Keyboard Navigation 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

15.

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.

16.

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 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 sufficient condition.

17.

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 about recommending people unless they are reasonably confident they are good candidates.

18.

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.

19.

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.

20.

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 360degree evaluation and feedback systems. Here, superiors, direct reports, colleagues, and even internal and external customers rate the performance of a person.

21.

The 360-degree evaluation and feedback system addresses many of the limitations of traditional approaches to 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 individual performance. The 360-degree feedback system complements teamwork, employee involvement, and organizational flattening.

Accessibility: Keyboard Navigation 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

22.

The 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.

23.

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 non-compete clauses.

24.

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.

25.

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.

26.

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.

27.

Social capital is found in the knowledge, skills, and abilities of individual employees. FALSE Social capital development (the friendships and working relationships among talented individuals) gains importance when key players are free agents, because it helps tie knowledge workers to a given firm.

AACSB: Analytical Thinking Accessibility: Keyboard Navigation Blooms: Understand Learning Objective: 04-03 The key role of social capital in leveraging human capital within and across the firm. Level of Difficulty: 2 Medium Topic: The Vital Role of Social Capital

28.

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 Social capital development (the friendships and working relationships among talented individuals) gains importance when key players are free agents, because it helps tie knowledge workers to a given firm.

29.

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 The development of social capital (that is, the friendships and working relationships among talented individuals) gains importance, because it helps tie knowledge workers to a given firm.

30.

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 In this case, the scientist is offered approximately the same salary, facilities, and equipment plus one additional ingredient: working in a laboratory with 10 highly skilled and enthusiastic scientists. Part of the job is to collaborate with these peers and jointly develop promising drug compounds. There is little doubt as to which scenario will lead to a higher probability of retaining the scientist. The interaction, sharing, and collaboration will create a situation in which the scientist will develop firm-specific ties and be less likely to bolt for a higher salary offer.

31.

Knowledge-based resources tend to be more explicit in nature. FALSE Knowledge-based resources tend to be more tacit in nature. Therefore, they are much more difficult to protect against loss (i.e., the individual quitting the organization) than other types of capital, such as equipment, machinery, and land.

32.

If employees are working effectively in teams and sharing their knowledge and learning from each other, not only will they be less likely to add value to the firm, but they also will be more likely to leave the organization, because of the loyalties and social ties that they develop over time. FALSE If employees are working effectively in teams and sharing their knowledge and learning from each other, not only will they be more likely to add value to the firm, but they also will be less likely to leave the organization, because of the loyalties and social ties that they develop over time.

33.

Hiring via personal networks is a trend in which job recruiters look for candidates at the crux of social relationships in organizations because they have the potential to bring valuable colleagues with them. TRUE In The Wall Street Journal, Bernard Wysocki described the increase in a type of Pied Piper effect, in which teams or networks of people are leaving one company for another. The trend is to recruit job candidates at the crux of social relationships in organizations, particularly if they are seen as having the potential to bring with them valuable colleagues. This is a process that is referred to as hiring via personal networks.

34.

Human capital mobility caused by social relationships occurs when talent emigrates from an organization to form start-up ventures. TRUE Another example of social relationships causing human capital mobility is the emigration of talent from an organization to form start-up ventures. Microsoft is perhaps the best-known example of this phenomenon.

35.

When Michael Reene left Andersen Consulting, eventually he joined Third Millennium as CEO with a small salary and 20 percent ownership position. He brought others with him, who brought others with them. This was possible because of the Pied Piper effect. TRUE Mr. Reene was a star at Andersen Consulting in the 1980s and at IBM in the 1990s. He built his businesses and kept turning down overtures from Mr. Eickhoff. However, in early 2000, he joined Third Millennium as chief executive officer, with a salary of just 120,000 USD but with a 20 percent stake in the firm. Since then, he has brought in a raft of former IBM colleagues and Andersen subordinates. One new hire from his time at Andersen, Mary Goode, was brought on board as executive vice president. She promptly tapped her own network and brought along former colleagues.

36.

Start-up ventures often are formed by mobile human capital talent. TRUE Another example of social relationships causing human capital mobility is the emigration of talent from an organization to form start-up ventures. Microsoft is perhaps the best-known example of this phenomenon.

37.

Unique bundles of resources can contribute to employee competitive advantages. TRUE Competitive advantages tend to be harder for competitors to copy if they are based on unique bundles of resources.

38.

Hiring organizations can be amorphous, distant and threatening entities and therefore detractors for knowledge workers. TRUE Knowledge workers often exhibit greater loyalties to their colleagues and their profession than their employing organization, which may be an amorphous, distant, and sometimes threatening entity.

AACSB: Analytical Thinking Accessibility: Keyboard Navigation Blooms: Understand 4-35 Copyright © 2016 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education.

Learning Objective: 04-03 The key role of social capital in leveraging human capital within and across the firm. Level of Difficulty: 2 Medium Topic: The Vital Role of Social Capital

39.

Social capital helps organizations leverage human capital within and across the firm. TRUE The key role of social capital is in leveraging human capital within and across the firm.

40.

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 Social network analysis depicts the pattern of interactions among individuals and helps to diagnose effective and ineffective patterns. It helps identify groups or clusters of individuals that comprise the network, individuals who link the clusters, and other network members. It helps diagnose communication patterns and, consequently, communication effectiveness.

AACSB: Analytical Thinking Accessibility: Keyboard Navigation Blooms: Understand Learning Objective: 04-04 The importance of social networks in knowledge management and in promoting career success. Level of Difficulty: 2 Medium Topic: The Vital Role of Social Capital

41.

Developing and protecting social capital requires independence, in which individuals must spend most of their time working individually. FALSE Developing social capital requires interdependence among group members. Social capital erodes when people in the network become independent. Increased interaction between members aids in the development and maintenance of mutual obligations in a social network.

42.

In bridging relationships in social networks, one member is central to the communication flows in a group. FALSE In closure relationships one member is central to the communication flows in a group. In bridging relationships, one person bridges or brings together groups that would have been otherwise unconnected.

AACSB: Analytical Thinking Accessibility: Keyboard Navigation 4-36 Copyright © 2016 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education.

Blooms: Understand Learning Objective: 04-04 The importance of social networks in knowledge management and in promoting career success. Level of Difficulty: 2 Medium Topic: The Vital Role of Social Capital

43.

Closure, in contrast to bridging relationships, stresses the importance of ties connecting heterogeneous people. FALSE Bridging relationships, in contrast to closure, stresses the importance of ties connecting people. Employees who bridge disconnected people tend to receive timely, diverse information because of their access to a wide range of heterogeneous information flows.

44.

From the individual perspective, social networks deliver three unique advantages: private information, access to diverse skill sets, and power. TRUE Effective social networks provide many advantages for the firm. They can play a key role in the career advancement and success of an individual. A social network potentially can provide three unique advantages: private information, access to diverse skill sets, and power.

45.

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 Some firms have been adversely affected by very high levels of social capital because it may breed groupthink, a tendency not to question shared beliefs. In effect, too many warm and fuzzy feelings among group members prevent people from rigorously challenging each other.

46.

The role of technology in the recruitment of human capital has lowered individual reliance on the use of social networks. FALSE Technology can be used to leverage human capital and knowledge within organizations as well as with customers and suppliers beyond their boundaries, but social networks are still important for sharing information.

47.

Connectors are people to have a unique ability to link people, ideas and resources and are rarely useful for business because they maintain only personal connections that are not transferable. FALSE Connectors are people who have the ability to link people, ideas, and resources that would not normally bump into one another. In business, connectors are critical facilitators for collaboration and integration.

48.

John wanted to set up a nurse-led preoperative assessment service intended to free up time for the doctors who previously led the assessments, reduce cancelled operations (and costs), and improve patient care. Carol, a well-respected nurse, had less seniority than John, but many colleagues relied on her advice about navigating hospital politics. She knew many of the people whose support John needed and she eventually converted them to the change. This is an example of a connector. TRUE A connector is a person who has used many ties to different social worlds. It is not the number of people that connectors know that makes them significant. Rather, it is their ability to link people, ideas, and resources that would not normally bump into one another.

49.

Social networks such as Facebook do not facilitate increased interactions between members in a social network via Internet-based communications. FALSE Social networks such as Facebook may facilitate increased interactions between members in a social network via Internet-based communications.

AACSB: Analytical Thinking Accessibility: Keyboard Navigation 4-38 Copyright © 2016 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education.

50.

In social network analysis, a person who has no linkages to others in the network is labeled a conformist. FALSE There may be some individuals with literally no linkages, such as Fred. These individuals are typically labeled isolates.

51.

Burt studied several hundred managers in the Raytheon supply chain group and asked them to write down ideas to improve the company supply chain management. Then he asked two Raytheon executives to rate the ideas. The conclusion: The best suggestions consistently came from managers who discussed ideas outside their regular work group. This is an example of a structural hole. FALSE Bridging relationships, in contrast to closure, stress the importance of ties connecting people. Employees who bridge disconnected people tend to receive timely, diverse information because of their access to a wide range of heterogeneous information flows. Such bridging relationships span a number of different types of boundaries.

52.

Effective collaboration requires overcoming four barriers: the not-invented-here barrier, the hoarding barrier, the search barrier, and the place-setter barrier. FALSE Effective collaboration requires overcoming four barriers: the not-invented-here barrier (people are not willing to provide help); the hoarding barrier (people are not willing to provide help); the search barrier (people are unable to find what they are looking for); the transfer barrier (people are unable to work with the people they do not know well).

53.

The use of email can be distracting to employees. Some firms limit the time that employees spend using email. TRUE Email is an effective means of communicating a wide variety of information. It is quick, easy, and almost costless. Of course, it can become a problem when employees use it extensively for personal reasons.

AACSB: Analytical Thinking Accessibility: Keyboard Navigation Blooms: Understand Learning Objective: 04-05 The vital role of technology in leveraging knowledge and human capital. Level of Difficulty: 2 Medium Topic: Using Technology to Leverage Human Capital and Knowledge

54.

Sharing knowledge and information throughout the organization is important for conserving resources, developing products and services, and thwarting new opportunity creation. FALSE Sharing knowledge and information throughout the organization can be a means of conserving resources, developing products and services, and creating new opportunities.

55.

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

56.

Email can cause embarrassment, as explained by Marshall Goldsmith, executive coach. TRUE Email can also cause embarrassment, or worse, if one is not careful. Consider the plight of a potential CEO, as recalled by Marshall Goldsmith, a well-known executive coach: He witnessed a series of emails between a potential CEO and a friend inside the company. The first email to the friend provided an elaborate description of why the current CEO is an idiot. The friend sent a reply. Several rounds of emails followed. Then the friend sent an e-mail containing a funny joke. The potential CEO decided that the current CEO would love this joke and forwarded it to him. The CEO scrolled down the email chain and found the idiot message. The heir apparent was gone in a week.

AACSB: Analytical Thinking Accessibility: Keyboard Navigation 4-40 Copyright © 2016 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education.

Blooms: Understand Learning Objective: 04-05 The vital role of technology in leveraging knowledge and human capital. Level of Difficulty: 2 Medium Topic: Using Technology to Leverage Human Capital and Knowledge

57.

Deliberate actions to reduce email output consist of forwarding all messages, but limiting the number of recipients. FALSE Despite a few misgivings, the executives at London-based International Power underwent training to reduce their email output by taking more deliberate actions. These included not forwarding messages unless strictly necessary, limiting message recipients, and choosing the most efficient form of communication to accomplish the task at hand.

58.

Phone calls can be better than emails for providing real-time feedback on whether a message is being understood. TRUE A phone call provides real-time feedback on whether a message is being understood. This is something that is missing with low-bandwidth email channel.

59.

Facial expressions and body language make in-person meetings a rich method of communication, but not significantly better than email in most cases. FALSE Executives at London-based International Power underwent training to reduce their email output by taking more deliberate actions. These included making more in-person meetings in order to capture facial expressions and body language that are a richer method of communication than email.

60.

Top executives should use email for monthly blasts to employees to discuss company health and other specific issues. TRUE Email can be a means for top executives to communicate information efficiently. For example, Martin Sorrell, chairman of WPP Group PLC, the huge 17 billion USD advertising and public relations firm, is a strong believer in the use of email. He emails all of his employees once a month to discuss how the company is doing, address specific issues, and offer his perspectives on hot issues, such as new business models for the Internet.

61.

Technology can also enable much more sophisticated forms of communication in addition to knowledge sharing. TRUE Technology can also enable much more sophisticated forms of communication in addition to knowledge sharing. Cisco, for example, launched Integrated Workforce Experience (IWE) in 2010. It is a social business platform designed to facilitate internal and external collaboration and decentralize decision making.

62.

Cisco launched Integrated Workforce Experience (IWE) in 2010. It is a social business platform designed to facilitate internal and external collaboration and decentralize decision making. It functions much like a Facebook wall in that a real-time news feed provides updates on employee status and activities as well as information about relevant communities, business projects, and customer and partner interactions. This is a reason to totally eliminate email. FALSE Technology can also enable much more sophisticated forms of communication in addition to knowledge sharing. Cisco launched Integrated Workforce Experience (IWE) in 2010. It is a social business platform designed to facilitate internal and external collaboration and decentralize decision making. It functions much like a Facebook wall in that a real-time news feed provides updates on employee status and activities as well as information about relevant communities, business projects, and customer and partner interactions. This is a different function from email and therefore does not replace it entirely.

63.

The use of communication platforms such as the Cisco Integrated Workforce Experience (IWE) permits companies to push out information where it is needed. TRUE Cisco launched Integrated Workforce Experience (IWE) in 2010. It is a social business platform designed to facilitate internal and external collaboration and decentralize decision making. A Cisco manager suggests that it makes recommendations based on what you are doing, the role you are in and the choices of other people like you. He claims that they are taking that to the enterprise level and basically allowing appropriate information to find you.

64.

Technology can be used to leverage human capital and knowledge within organizations as well as with customers and suppliers beyond their boundaries. TRUE Technology can be used to leverage human capital and knowledge within organizations as well as with customers and suppliers beyond their boundaries. Two means for sharing knowledge include emails and knowledge-sharing platforms.

65.

One should only rely on communication platforms and never on email for communicating information. FALSE Sharing knowledge and information throughout the organization can be a means of conserving resources, developing products and services, and creating new opportunities. We discuss how technology can be used to leverage human capital and knowledge within organizations as well as with customers and suppliers beyond their boundaries. This includes the use of email and communication platforms.

66.

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 Successful action by both traditional teams and e-teams requires that e-team leaders and key members know how to combine individual contributions in the most effective manner for a coordinated and appropriate response.

AACSB: Analytical Thinking Accessibility: Keyboard Navigation Blooms: Understand Learning Objective: 04-06 Why "electronic" or "virtual" teams are critical in combining and leveraging knowledge in organizations and how they can be made more effective. Level of Difficulty: 2 Medium Topic: Using Technology to Leverage Human Capital and Knowledge

67.

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 One of the challenges of knowledge-intensive organizations is to capture and codify the knowledge and experience that, in effect, resides in the heads of its employees. Once a knowledge asset (e.g., a software code or processes) is developed and paid for, it can be reused many times at very low cost, assuming that it does not have to be substantially modified each time.

68.

According to the text, effective e-teams identify group members with a proper balance of technical and interpersonal skills. TRUE The potential for process losses tends to be more prevalent in e-teams than in traditional teams, because the geographical dispersion of members increases the complexity of establishing effective interaction and exchanges. Such problems can be exacerbated when team members have less than ideal competencies and social skills. This can erode problem-solving capabilities as well as the effective functioning of the group as a social unit.