Question 1

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.

Accepted Answer

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.

Question 2

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.

Accepted Answer

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.

Question 3

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.

Accepted Answer

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.

Question 4

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

Accepted Answer

Explicit (or codified) knowledge is knowledge that can be documented, widely distributed, and easily replicated. 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. Otherwise, they will have to constantly reinvent the wheel, which is both expensive and inefficient.

Question 5

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.

Accepted Answer

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.

Question 6

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

Accepted Answer

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

Question 7

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

Accepted Answer

Intellectual property rights are the intangible property owned by a firm in the forms of patents, copyrights, trademarks, or trade secrets.

Question 8

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

Accepted Answer

Social capital is the network of relationships that individuals have throughout the organization.

Question 9

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

Accepted Answer

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.

Question 10

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

Accepted Answer

Sharing knowledge and information throughout the organization can be a means of conserving resources, developing products and services, and creating new opportunities.

Question 11

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

Accepted Answer

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.

Question 12

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.

Accepted Answer

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.

Question 13

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

Accepted Answer

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.

Question 14

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.

Accepted Answer

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.

Question 15

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.

Accepted Answer

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.

Question 16

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

Accepted Answer

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.

Question 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.

Accepted Answer

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.

Question 18

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.

Accepted Answer

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.

Question 19

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

Accepted Answer

Knowledge workers place professional development and personal enrichment (financial and otherwise) above company loyalty.

Question 20

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

Accepted Answer

Intellectual property rights are more difficult to define and protect than property rights for physical assets (e.g., plant, equipment, and land). If, however, intellectual property rights are not reliably protected by the state, there will be no incentive to develop new products and services.

Quiz 4: Recognizing a Firm's Intellectual Assets: Moving Beyond a Firm's Tangible Resources