Question 1

Human capital includes

Accepted Answer

Human capital refers to the attributes that individuals bring to the job market, including their education, experience, abilities, and skills, which can enhance their productivity and value in the workforce.

Question 2

Intellectual capital is the difference between the market value and the book value of a firm. Intellectual capital can be increased by

Accepted Answer

Intellectual capital is primarily enhanced through the knowledge, skills, and abilities of a firm's workforce. Attracting and retaining knowledgeable workers directly contributes to the accumulation and application of intellectual capital within an organization, thereby potentially increasing its market value beyond its book value.

Question 3

Many companies use referrals by current employees as a source for new hiring because

Accepted Answer

Current employees tend to be cautious in recommending someone for a position within their company because their own reputation and credibility are at stake if the referral does not perform well. This can lead to higher quality candidates being referred.

Question 4

BC Biomedical Laboratories, which has been named one of Canada's 'Best Employers' attributes their success to having a

Accepted Answer

BC Biomedical Laboratories attributes their success to having a flat organization, which typically means there are fewer hierarchical levels, promoting better communication and faster decision-making among employees.

Question 5

To take advantage of investment in human capital a firm should

Accepted Answer

Establishing practices that enhance employee retention is crucial for a firm to take advantage of its investment in human capital. Retaining employees allows the firm to benefit from their experience, skills, and knowledge over a longer period, maximizing the return on investment in training and development.

Question 6

Managing a knowledge-intensive workforce is very challenging. The best way for a firm to manage their workforce is to

Accepted Answer

The most effective strategy for managing a knowledge-intensive workforce involves a balanced approach to attracting, selecting, and retaining top talent. This ensures the firm not only brings in the best employees but also maintains a high-quality workforce over time.

Question 7

Tacit knowledge

Accepted Answer

Tacit knowledge is knowledge that is difficult to transfer to another person by writing it down or verbalizing it. It is inherently personal and often context-specific, residing in the minds of employees, making it accessible primarily through direct interaction with the individuals who possess it.

Question 8

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

Accepted Answer

Adopting effective retention strategies is crucial for firms experiencing high turnover as it directly addresses the issue of keeping employees engaged and satisfied, thereby reducing the need for constant recruitment.

Question 9

As the competitive environment changes, strategic management must focus on different aspects of the organization. Recently strategic management has moved from focusing on

Accepted Answer

Strategic management has shifted its focus from tangible resources, such as physical assets, to intangible resources, such as brand reputation, intellectual property, and organizational culture. This is because intangible assets have become more critical in gaining competitive advantage in the knowledge-based economy.

Question 10

In terms of retaining human capital, Magna's strategy is to

Accepted Answer

Magna's strategy for retaining human capital involves cultivating the creative potential of its workforce and distributing 6 percent of profits to senior managers, in addition to allocating 10 percent of pre-tax profits to employees.

Question 11

Many firms try to protect their human capital and diversify the ownership of their vital knowledge through the following means, except

Accepted Answer

Recruiting talented individuals from the best research institutions focuses on acquiring human capital rather than protecting or diversifying the ownership of vital knowledge within the firm.

Question 12

Firms must compete for top talent. Whirlpool Canada dealt with conflicting demands of family and work by

Accepted Answer

Whirlpool Canada addressed the conflicting demands of family and work by offering additional work/life balance days to each employee, which is a direct approach to help employees manage their personal and professional responsibilities more effectively.

Question 13

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

Accepted Answer

Tacit knowledge refers to knowledge that is difficult to articulate, such as intuition or practical skills, while explicit knowledge can be easily explained and communicated through language or symbols. New knowledge is often created through the dynamic interplay between these two types of knowledge, as individuals draw on their existing tacit knowledge to develop and refine explicit models or theories, and then use these models to further explore and expand their tacit understanding. Therefore, the interaction between tacit and explicit knowledge is essential for the creation of new knowledge.

Question 14

According to Alan Davidson, an industrial psychologist, the single best predictor of an employee's future behaviour is

Accepted Answer

Past behaviour is considered the best predictor of future behaviour because it provides concrete examples of how an individual has acted in similar situations before.

Question 15

At Citibank, a talent inventory program keeps track of 10,000 employees worldwide in order to

Accepted Answer

Talent inventory programs are typically used by organizations to identify the skills and competencies of their employees, helping to understand what areas they need to develop or improve. This aids in planning for training, development, and future staffing needs.

Question 16

Maintaining a competitive workforce is very challenging in today's economy. The role of evaluating human capital, in recent years, has

Accepted Answer

The role of evaluating human capital has increased in recent years due to the growing recognition of the importance of talent management, skills development, and employee engagement in maintaining a competitive workforce.

Question 17

Changes in our economy have forced firms to be more concerned with protecting their

Accepted Answer

Knowledge workers are crucial in today's economy because they possess specialized skills, expertise, and knowledge that are essential for innovation, competitiveness, and productivity in a rapidly changing business environment. Protecting these workers ensures a firm can maintain its intellectual capital and adapt to economic changes.

Question 18

_________ capital includes creativity and problem-solving ability.

Accepted Answer

Human capital includes intangible assets such as creativity and problem-solving ability, which are skills and knowledge that individuals possess.

Question 19

Recently, in developed countries, a knowledge worker's loyalty to his or her employer has __________ compared to his or her loyalty to his or her profession and colleagues.

Accepted Answer

In recent years, there has been a noticeable shift in the loyalty of knowledge workers in developed countries. They tend to show more loyalty to their profession and colleagues rather than to their employers. This change reflects broader trends in the workforce, including greater mobility among jobs, the rise of networking, and the value placed on professional development and peer connections over traditional corporate loyalty.

Question 20

In the knowledge economy, if a large portion of a firm's value is in intellectual and human assets, the difference between the company's market value and book value should ___________ a company with mostly physical and financial assets.

Accepted Answer

The difference between a company's market value and book value tends to be larger for firms with significant intellectual and human assets compared to those with mostly physical and financial assets. This is because intellectual and human assets often have a high value that is not fully captured on the balance sheet, leading to a greater disparity between market and book values.

Quiz 4: Assessing the Intellectual Assets of the Firm