BUSI 400 Homework 2 Strategic Analysis with Financial Ratios Assignment solutions complete answers

BUSI 400 Homework 2 Strategic Analysis with Financial Ratios Assignment solutions complete answers 

 

Value-chain analysis assumes that the basic economic purpose of a firm is to create value, and it is a useful framework for analyzing the strengths and weaknesses of the firm.

 

In value-chain analysis, value is measured by the market value of the total stock outstanding of the company.

 

Primary activities contribute to the physical creation of a product or service, its sale and transfer to the buyer, and its service after the sale.

 

The value-chain concept assumes that both primary and support activities can produce value for customers.

 

Managers should focus their attention on interrelationships among value-chain activities within the firm, not on relationships among activities within the firm and other organizations (such as suppliers and customers).

 

Value-chain analysis can only be applied to manufacturing operations.

 

Information technology (IT) can also play a key role in enhancing the value that a company can provide its customers and, in turn, increasing its own revenues and profits. IT is an activity within the support activities of general administration.

 

Campbell Soup uses electronic networks to improve the efficiency of outbound logistics. This is an example of relationships among activities within the firm and with other stakeholders that are part of the company expanded value chain.

 

Some firms find great value by not incorporating their customers into the value creation process.

 

The resource-based view of the firm focuses solely on the internal analysis of the operations of the firm.

 

Tangible resources are assets that are relatively easy to identify such as financial and physical assets.

 

Intangible resources of a firm refer to its capacity to deploy tangible resources over time and leverage those resources effectively.

 

Financial resources such as cash and cash equivalents are intangible resources.

 

Human resources and reputation resources are examples of intangible resources.

 

Products and services that are difficult to imitate help firms sustain their profitability.

 

Path dependency has no impact on the inimitability of resources.

 

Capabilities that exhibit causal ambiguity are difficult to imitate.

 

Financial analysis provides an accurate way to assess the relative strengths of firms and can be used as a complete guide to study companies.

 

A primary benefit of the balanced scorecard is that it complements financial indicators with operational measures of customer satisfaction, internal processes, and the innovation and improvement activities of the organization.

 

Assessing the performance of a firm is less useful if it is evaluated in terms of how it changes over time.

 

According to the balanced scorecard, even though the interests of various stakeholders can be interrelated, improving firm performance necessarily needs to involve making trade-offs among different stakeholders.

 

A key limitation of the balanced scorecard is that it is a quick fix that can be installed easily.

 

The value of the balanced scorecard is recognizing how the interests of a variety of stakeholders cannot be interrelated.

 

Because business leaders face strong pressures to produce financial results, it is best to ignore all other areas of the firm and concentrate only on financial results and stockholder satisfaction.

 

Business software such as Hana by SAP are developing AI (artificial intelligence) tools to create sustainable competitive advantage by leveraging data to better understand customer preferences, use of products, and the operations of the firm.

 

According to Michael Porter in his book, Competitive Advantage, a key concept used in analyzing the competitive position of a firm is creating value for

A) buyers that exceeds the costs of production (i.e., margin).

B) suppliers that exceeds the costs of production (i.e., margin).

C) government that exceeds the costs of production (i.e., margin).

D) employees that exceeds the costs of production (i.e., margin).

 

Inbound logistics include which of the following?

A) machining and packaging

B) repair and parts supply

C) promotion and packaging

D) warehousing and inventory control

 

In assessing its primary activities, an airline would examine

A) employee training programs.

B) baggage handling.

C) criteria for lease versus purchase decisions.

D) the effectiveness of its lobbying activities.

 

Advertising is a ________ activity. Supply of replacement parts is a ________ activity.

A) support; primary

B) primary; primary

C) primary; support

D) support; secondary

 

Which of the following examples demonstrates how successful organizations manage their primary activities?

A) Motorola has revised its compensation system to reward employees who learn a variety of skills.

B) Wal-Mart implemented a sophisticated information system that resulted in reduced

inventory carrying costs and shortened customer response times.

C) National Steel improved its efficiency by reducing the number of job classifications.

D) JIT inventory systems are vital in order for Dell to fulfill orders in a few days.

 

Mercedes-Benz aggressively pushed for product placement in Hollywood movies. This is an example of which value chain primary or support activity?

A) support activity: general administration

B) primary activity: service

C) support activity: procurement

D) primary activity: marketing and sales

 

________ is/are associated with collecting, storing, and distributing the product or service to buyers. They consist of warehousing, material handling, delivery operation, order processing, and scheduling.

A) Services

B) Inbound logistics

C) Outbound logistics

D) Operations

 

When Nordstrom, the Seattle-based department store chain, aids customers with after-sales support, it exemplifies which primary value-chain activity?

A) operations

B) outbound logistics

C) inbound logistics

D) service

 

Which of the following is a support activity?

A) inbound logistics

B) customer service

C) technology development

D) operations

 

Which of the following lists consists of support activities?

A) human resource management, technology development, customer service, and procurement

B) human resource management, customer service, marketing and sales, and operations

C) customer service, information systems, technology development, and procurement

D) human resource management, technology development, procurement, and general administration

 

Human resource management consists of activities involved in the recruiting, hiring, training, development, and compensation of all types of personnel. It supports

A) only individual primary activities.

B) mostly support activities but does have some impact on primary activities.

C) only individual support activities.

D) both individual primary and support activities and the entire value chain.

 

According to value-chain analysis, which of the following would be considered part of the general administration in a firm?

A) information systems

B) technology development

C) human resource management

D) procurement

 

Coca-Cola has developed data analytic technologies to produce orange juice that meets the taste demands of a global customer base. This is an example of using which value chain support activity?

A) marketing and sales

B) technology development

C) human resource management

D) procurement

 

Facebook, Intuit, AB InBev, and others empower their recruiters to make offers on the spot when they interview college students, without knowing what specific position they will fill. These firms search for candidates with attributes such as being a self-starter and a problemsolver and make quick offers to preempt the market. This is an example of which value chain support activity?

A) operations

B) technology development

C) human resource management

D) procurement

 

In a telephone operating company, negotiating and maintaining ongoing relations with regulatory bodies can be among the most important activities for competitive advantage. What type of value-chain support activity is this?

A) service

B) technology development

C) human resource management

D) general administration

 

The Germany truck and trailer manufacturer, Schmitz Cargobull, mainly serves customers who are operators of truck or trailer fleets. What sets the company apart is its expertise in telematics (the integrated application of telecommunications data) to monitor the current state of any Schmitz Cargobull-produced trailer. What type of a value-chain support activity is this?

A) service

B) technology development

C) human resource management

D) general administration

 

A marketing department that promises delivery faster than the ability of the production department to produce is an example of a lack of understanding of the

A) interrelationships among value-creating activities within a firm.

B) organizational culture and leadership.

C) need to maintain the reputation of the company.

D) synergy of the business units.

 

Campbell Soup uses electronic networks to improve the efficiency of outbound logistics. These networks also helped Campbell Soup manage the ordering of raw materials more efficiently, improve its production scheduling, and help its customers better manage their inbound logistics operations. This is an example of

A) interrelationships among activities within the firm.

B) relationships among activities within the firm and with other stakeholders that are part of the expanded value chain of the firm.

C) relationships among activities outside of the firm.

D) interrelationships among activities outside of the firm.

 

In terms of value-chain analysis, a telephone operating company would find that negotiating and maintaining ongoing relations with regulatory bodies are important activities for achieving

A) inbound logistics.

B) customer awareness.

C) competitive advantage.

D) better employees.

 

General administration is sometimes viewed as only ________, but it can be a powerful source of competitive advantage.

A) income

B) value

C) overhead

D) unimportant

 

German truck and trailer manufacturer, Schmitz Cargobull, mainly serves customers that are operators of truck or trailer fleets. What sets the company apart is its expertise in telematics (the integrated application of telecommunications data) to monitor the current state of any Schmitz Cargobull-produced trailer. This is an example of using ________ to enhance customer value and increase ________ position.

A) sales; competitive

B) operations; marketing

C) information technology; competitive

D) human resources; marketing

 

An executive states that HR must be a true partner of the business, with a deep and up-todate understanding of business realities and objectives and must ensure HR initiatives fully support them at all points of the value chain. This is an example of

A) relationships among activities within the firm and with other stakeholders.

B) relationships between firms.

C) interrelationships among activities within the firm.

D) interrelationships among firms.

 

Regarding the value-chain concept, the most important interrelationship is between the organization and its

A) board of directors.

B) employees.

C) customers.

D) management.

 

Accounting is a sort of transformation process that converts daily records of individual transactions into monthly financial reports. The ________ are the inputs, accounting is the operation that adds value, and ________ are the outputs.

A) transaction records; financial statements

B) financial statements; transaction records

C) employee records; transaction records

D) health records; transaction statements

 

A travel agent adds value by creating an itinerary that includes transportation, accommodations, and activities that are customized to your budget and travel dates. In terms of the value-chain analysis, this is an example of a ________ organization.

A) retail

B) service

C) manufacturing

D) travel

 

For an engineering services firm, ________ provides inputs, the transformation process is the engineering itself, and innovative designs and practical solutions are the outputs.

A) experimentation

B) customer support

C) research and development

D) human resource management

 

For a firm such as Nordstrom that has no manufacturing operations, value is added by developing expertise in the procurement of finished goods and by displaying them in its stores in a way that enhances sales. In the value chain, procurement activities become the primary activity. This begins with ________ and ends with ________.

A) purchasing goods; operating stores

B) managing and distributing inventory; marketing and selling

C) partnering with vendors; marketing and selling

D) partnering with vendors; operating stores

 

The resource-based view (RBV) of the firm combines the following two perspectives:

A) the primary and support activities of the firm.

B) the interrelationships among the primary activities of the firm and corporate management.

C) the internal analysis of the firm and the external analysis of the industry and competitive environment.

D) the industry and the competitive environment.

 

The three key types of resources that are central to the resource-based view of the firm are

A) tangible resources, intangible resources, and organizational structure.

B) culture, tangible resources, intangible resources.

C) tangible resources, intangible resources, and organizational capabilities.

D) tangible resources, intangible resources, and top management.

 

In the resource-based view of the firm, examples of tangible resources include

A) financial resources, human resources, and firm competencies.

B) financial resources, physical resources, and technological resources.

C) financial resources, physical resources, and the capacity to combine intangible resources.

D) outstanding customer service, innovativeness of products, and reputation.

 

Many firms are finding that high-tech, computerized training has dual benefits. It develops employees who are more effective and reduces costs at the same time. Employees at FedEx take computer-based job competency tests every 6 to 12 months. This is an example of a(n) ________ tangible resource.

A) financial

B) organizational

C) physical

D) technological

 

________ are typically embedded in unique routines and practices that have evolved and accumulated over time such as effective work teams.

A) Tangible resources

B) Intangible resources

C) Reputational resources

D) Organizational capabilities

 

Harley-Davidson markets motorcycles, clothes, toys, and restaurants. It uses its strong ________, which is ________.

A) financial position; an intangible resource

B) brand image; an intangible resource

C) brand image; a tangible resource

D) technological resources; an intangible resource

 

Apple combines and packages proven technology in new and innovative ways. This is an example of its use of

A) tangible resources.

B) intangible resources.

C) organizational capabilities.

D) strong primary activities.

 

________ are the competencies or skills that a firm employs to transform inputs into outputs.

A) Tangible resources

B) Reputational resources

C) Organizational capabilities

D) Intangible resources

 

Which of the following is not an example of organizational capabilities?

A) outstanding customer service

B) reputation with customers for quality and reliability

C) innovativeness of products and services

D) ability to hire, motivate, and retain human capital

 

The ability to hire, motivate, and retain human capital is an example of ________ capabilities in the resource-based view of the firm.

A) tangible

B) organizational

C) management

D) design

 

To be considered strategic resources that contribute competitive advantage, they must have several characteristics. Which of the following is not one of these?

A) rare

B) valuable

C) inexpensive to imitate

D) costly to substitute

 

Which of the following is not a tangible resource?

A) technical and scientific skills

B) trade secrets, patents, copyrights

C) state-of-the art machinery

D) company borrowing capacity

 

Intangible resources are typically embedded in ________ routines and practices that have evolved and accumulated over time.

A) common

B) standard

C) unique

D) obvious

 

The culture of a firm also may be a resource that provides competitive advantage. Which of these companies might be a good example of this intangible resource?

A) Google

B) Kmart

C) Wells Fargo

D) Walmart

 

For a resource to provide a firm with the potential for a sustainable competitive advantage, it must have four attributes. Which of the following is not one of these attributes?

A) rare

B) valuable

C) easy for competitors to substitute

D) difficult for competitors to imitate

 

A competitive advantage based on inimitability can be sustained for at least some time, if it has the following characteristics:

A) psychographic uniqueness, path dependency, causal ambiguity, and substitutability.

B) physical uniqueness, path dependency, causal ambiguity, and social complexity.

C) rarity, path dependency, causal ambiguity, and social substitutability.

D) geographic uniqueness, cause dependency, social ambiguity, and path complexity.

 

Groupon offers online coupons for bargains at local shops and restaurants. Which of the following is a reason that rivals are limiting its growth?

A) Its core capability is not easily imitated.

B) Its core capability is easily imitated.

C) Not many firms possess the same capability.

D) There are few equivalent capabilities.

 

A crash R&D program by one firm cannot replicate a successful technology developed by another firm, when research findings cumulate. This is an example of

A) social complexity.

B) physical uniqueness.

C) path dependency.

D) causal ambiguity.

 

Gerber Products Co. brands their baby food which gives them a resource that is potentially intimitable because re-creating brand loyalty is likely to be a time-consuming process competitors would find difficult to expedite. This is an example of using ________ conditions to build protection in the baby food market.

A) social complex

B) physical uniqueness

C) path dependent

D) causal ambiguity

 

Ashley Furniture controls all steps of its distribution systems, developing specific competencies that are difficult to match. They are using ________ to build sustainable advantage.

A) path dependency

B) social complexity

C) physical uniqueness

D) tangible resources

 

The root of the 3M innovation process is complex, hard to understand, and difficult to imitate. This is a competitive advantage based on

A) path dependency.

B) social complexity.

C) casual ambiguity.

D) availability.

 

A wide variety of firm resources that are costly to imitate due to the social engineering that is required being beyond the capability of competitors include interpersonal relations among managers in the firm, its culture, and its reputation with its suppliers and customers. Such competitive advantages are based upon

A) path dependency.

B) social complexity.

C) physical uniqueness.

D) tangible resources.

 

All of the following are examples of socially complex organizational phenomena except

A) the culture of a firm.

B) complex physical technology.

C) interpersonal relations among managers of a firm.

D) leadership and trust.

 

A resource is valuable and rare but neither difficult to imitate nor without substitutes. This should enable the firm to attain

A) no competitive advantage.

B) a temporary competitive advantage.

C) competitive parity.

D) a sustainable competitive advantage.

 

Employees will be able to obtain a proportionately high level of profits they generate (relative to the firm) if

A) suppliers are loyal to the firm.

B) their expertise is firm-specific.

C) the cost to the firm of replacing them is high.

D) the firm's resources are path dependent.

 

Which of the following is not a factor that helps to explain the extent to which employees and managers will be able to obtain a proportionately high level of the profits that they generate?

A) Employees have high bargaining power.

B) The cost of employee replacement is high.

C) The cost of exit is high for an employee.

D) Managers have low bargaining power.

 

Many competitors find it difficult to compete with Google and its ability to innovate and launch new products. While they believe this is tied to the Google trend to hire good talent and thus build the culture of creativity within the firm, they are not able to easily identify the specific set of actions Google takes to build its image and culture and then to replicate it. This competitive advantage is known as

A) causal ambiguity.

B) product rarity.

C) service validity.

D) substitutability.

 

Four factors help explain the extent to which employees and managers will be able to obtain a proportionately high level of the profits that they generate. Which is not one of these factors?

A) employee bargaining power

B) employee replacement cost

C) employee exit costs

D) competitor bargaining power

 

Which of the following groups generally is charged with creating value through the process of organizing, coordinating, and leveraging employees as well as other forms of capital such as plant, equipment, and financial capital?

A) unions

B) boards of directors

C) managers

D) stakeholders

 

Raymond Ozzie, the software designer who was critical in the development of Lotus Notes, was able to dictate the terms under which IBM acquired Lotus. This illustrates that he had ________ bargaining power based on the ________ cost required by the firm to replace him.

A) low; low

B) low; high

C) high; low

D) high; high

 

Historical comparisons provide information to managers about changes in the competitive position of a firm. Historical comparisons often are misleading

A) if the overall strategy of the firm is the same.

B) if the firm shows constant growth.

C) in periods of recession or economic boom.

D) if the stock of the firm is publicly traded.

 

The best measure of company ability to meet imminent financial obligations is known as the 

A) debt ratio.

B) profit margin.

C) total asset turnover.

D) current ratio.

 

Which of the following would be most difficult to assess?

A) the liquidity position of a firm

B) market share growth

C) the legitimacy and reputation of a firm

D) the efficiency with which a firm utilizes its assets

 

Which of these categories of financial ratios is used to measure the ability of a firm to meet its short-term financial obligations?

A) liquidity ratios

B) profitability ratios

C) activity ratios

D) leverage ratios

 

________ ratios reflect whether a firm is efficiently using its resources.

A) Turnover

B) Leverage

C) Liquidity

D) Profitability

 

Which of the following is a profitability ratio?

A) current ratio

B) total debt ratio

C) total asset turnover

D) return on equity

 

Financial ratio analysis measures the performance of the firm based on all but which of the following?

A) balance sheet

B) market valuation

C) income statement

D) industry comparison

 

Comparing your firm with all other firms in your industry assesses ________ performance.

A) excessive

B) consistent

C) relative

D) non-comparable

 

Making comparisons between a firm and its most direct rivals is useful because firms within

the same strategic industry group have ________ strategies.

A) different

B) the same

C) similar

D) relative

 

In making the decision to enter the pharmaceutical industry, a company would not need to consider which of the following?

A) historical comparisons

B) comparisons with industry norms

C) comparisons with key competitors

D) comparisons with non-competitors

 

A firm that takes on too much long-term debt to finance operations will see an immediate impact on its indicators of ________ financial leverage.

A) short-term

B) long-term

C) relative

D) comparable

 

Apple Inc. reported revenues of 234 billion USD and net income of 53 billion USD in 2015. These figures represent a stunning annual growth in revenue and net income of 28 percent and 33 percent, respectively, for 2014. This information indicates the importance of using ________ to evaluate company financial performance.

A) financial ratios

B) industry norms

C) historical comparisons

D) competitor analysis

 

The balanced scorecard provides top managers with a ________ view of the business.

A) detailed and complex

B) simple and routine

C) fast but comprehensive

D) long-term financial

 

The balanced scorecard, developed by Kaplan and Norton, helps to integrate

A) financial analysis and the reputation of a firm.

B) intangible resources and operational measures.

C) financial analysis and stakeholder perspectives.

D) short-term perspectives and strategic positioning.

 

The balanced scorecard enables managers to consider their business from all the following perspectives except

A) customer perspective.

B) internal perspective.

C) innovation and learning perspective.

D) ethical perspective.

 

An important implication of the balanced scorecard approach is that

A) managers need to recognize that satisfaction of stockholder demands is their primary job.

B) the emphasis on customer satisfaction and financial goals are only a means to that end.

C) managers should not look at their job as primarily balancing stakeholder demands.

D) gains in financial performance must come at a cost of employee satisfaction.

 

The financial perspective of the balanced scorecard answers which of the following questions?

A) How do customers see us?

B) What must we excel at?

C) How do we look to shareholders?

D) Can we continue to improve and create value?

 

The innovation and learning perspective of the balanced scorecard answers which of the following questions?

A) How do customers see us?

B) What must we excel at?

C) How do we look to shareholders?

D) Can we continue to improve and create value?

 

The customer perspective of the balanced scorecard answers which of the following questions?

A) How do customers see us?

B) What must we excel at?

C) How do we look to shareholders?

D) Can we continue to improve and create value?

 

The internal business perspective of the balanced scorecard answers which of the following questions?

A) How do customers see us?

B) What must we excel at?

C) How do we look to shareholders?

D) Can we continue to improve and create value?

 

The internal measures should reflect business processes that have ________ impact on customer satisfaction. These include factors that affect cycle time, quality, employee skills, and productivity.

A) the least

B) variable

C) the most

D) potential

 

From the innovation and learning perspective, survival is dependent upon managers making ________ changes to existing products and services as well as introduce entirely new products with expanded capabilities.

A) few

B) no

C) frequent

D) rare

 

If managers do not recognize from the beginning that the balanced scorecard is not a ________ and fail to commit to it long term, the organization will be disappointed.

A) panacea

B) quick fix

C) marketing ploy

D) cheap solution

 

Managers must commit to a ________ use of the balanced scorecard if they expect sustained performance.

A) short-term

B) long-term

C) interim

D) rapid

 

Assessing the performance of a firm is more useful if it is evaluated in terms of how it changes over time, ________ with industry norms, and ________ with competitors.

A) compares, contrasts

B) disagrees, disagrees

C) agrees, agrees

D) compares, compares

 

Financial ratio analysis involves identifying how a firm is performing according to all but which of the following?

A) balance sheet

B) income statement

C) market valuation

D) innovation

 

Which of the following is not a common measure assessed in financial ratio analysis?

A) short and long-term solvency

B) asset utilization

C) profitability

D) market devaluation

 

Which of the following is not one of the four perspectives addressed by the balanced scorecard?

A) customer

B) external business

C) innovation and learning

D) financial factors

 

According to the Drucker Institute study of 693 large, publicly traded companies from 2012 to 2017, which of the following is not a key area of performance for firms to focus on?

A) customer satisfaction

B) innovation

C) social responsibility

D) crisis management

 

Firms that use AI to produce improved predictions and evaluations with the direct intervention of a human programmer or statistician have a high degree of sustainability because the combine aspects of ________ and ________ that make it difficult to imitate their resource bases.

A) path dependence, efficient procedures

B) casual ambiguity, efficient procedures

C) path dependence, social complexity

D) casual ambiguity, equivalent strategic capabilities

 

When building sustainability into business operations, companies look at all activities in the value chain. Which of the following is not a direct value chain activity that would be considered?

A) research and development

B) government relations

C) procurement

D) marketing

 

 

 

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.

 

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

 

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

 

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

 

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

 

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.

 

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.

 

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.

 

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.

 

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.

 

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

 

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.

 

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

 

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

 

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

 

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.

 

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.

 

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

 

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

 

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

 

Functional and operational routines that drive competitive success in stable conditions such as supply chain management and access to distribution channels can become obsolete rapidly.

 

One of the differences between physical assets and intellectual property is that the later can be stolen by simply broadcasting it.

 

The reason women have more difficulty networking than men is that it is difficult for women to find sponsors to make introductions and referrals because there are relatively few women in leadership positions.

 

The “likes -attract-like” principle means that men have to work harder to build relationships with decision makers and influential stakeholders than women because many organization senior ranks are heavily populated by women.

 

In order to diversify its candidate pool for early-career roles that can be a fast track to management, Unilever PLC, decided to partner with digital HR service providers to digitize the first steps in campus recruiting, thus eliminating traditional campus recruiting.

 

The main reason Toyota Motor Corporation opened the Toyota Research Institute in Los Altos, California; Cambridge, Massachusetts; and Ann Arbor, Michigan is because the pleasant weather experienced by all of these cities tends to attract Millennials.

 

Understanding why employees leave an organization is not essential information for company recruiting strategies.

 

Employers face many challenges when searching for talent. Which of the following is not one of those challenges?

A) Cutting-edge skills are evolving faster than universities can train people.

B) The supply of talented young professionals in software is saturated.

C) The willingness of talent to be mobile has declined.

D) Young professionals in advanced technologies are limited.

 

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

A) fixed capital.

B) working capital.

C) intangible resources.

D) investment capital.

 

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

 

Intangible assets derived mostly from human capital are on the rise, according to the advisory firm Ocean Tomo. A study of the Standard and Poors' 500 index from 1975 to 2015 demonstrated a 17 percent increase in market value of intangible assets over this time period. Companies such as Stryker get 70 percent of its value from intangibles. Intangible assets are

A) equipment.

B) land.

C) money.

D) non-physical.

 

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

 

According to Exhibit 4.1 in the textbook (Ratio of Market Value to Book Value for Selected Companies), firms with high market value to book value ratios achieve this because of their ________ investment in ________ resources and technological expertise.

A) low; physical

B) low; tangible

C) high; knowledge

D) high; liquid asset

 

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.

 

Which of the following firms would you expect to have the highest ratio of market value to book value?

A) General Motors

B) Intel

C) Microsoft

D) Nucor

 

Human capital includes

A) the relationships between people.

B) an improved product or service.

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

D) the output from assembly line employees.

 

Creativity and problem-solving ability are considered to be part of ________ capital.

A) physical

B) social

C) human

D) emotional

 

________ is the network of relationships that individuals have throughout the organization.

A) Human capital

B) Social capital

C) Intellectual capital

D) Tacit knowledge

 

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.

 

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

A) intellectual; pragmatic

B) theoretical; practical

C) tacit; explicit

D) detailed; tacit

 

Two software engineers working together on a computer code share their ________ knowledge to create new knowledge.

A) explicit

B) theoretical

C) tacit

D) easily reproduced

 

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

 

The text discusses three areas a firm must be concerned with to keep their best and brightest employees from leaving. These include all the following except

A) hiring/selecting.

B) developing.

C) sorting/absorbing.

D) retaining.

 

According to a recent Gallup study, companies with the most engaged workers outperformed those with the least engaged workers on profitability, productivity, and lower turnover. Which of the following processes is not likely to be an important factor in assuring this result?

A) hiring

B) developing

C) engaging

D) retaining

 

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

A) retain knowledge workers by increasing rewards.

B) ensure that it pays higher salaries than its rivals.

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

D) attract the brightest employees and train them often.

 

Firms must compete for top talent. In attracting and selecting employees, firms must strive to select the best fit for both the employee and the firm. In an attempt to reduce wasted time and effort in interviewing too many candidates while assuring a good candidate pool, a firm should

A) run employment ads in the newspaper.

B) only let lower-level employees interview job candidates.

C) use a pre-interview quiz.

D) refrain from hiring by referrals from present employees.

 

Companies that want to attract top talent often receive thousands of applications each year. Today, ________ and ________ ________ are used increasingly to improve talent selection.

A) HR specialists; motivational interviews

B) onboarding techniques; consultants

C) technology; data analytics

D) newspaper ads; television commercials.

 

The environmental sustainability strategy of a firm might be used to retain high-performing employees because recent college graduates

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

B) want a job in a company that is committed to corporate profit.

C) feel that profitability is not important.

D) are loyal to firms that are concerned with employee education.

 

Toyota Research Institute (TRI) wants to innovate in areas such as robotics and autonomous driving. They have locations in three locations because

A) young professionals like to switch jobs and move locations frequently.

B) coveted candidates prefer to stay in their current location closer to their research universities.

C) there are too many potential candidates for one location only.

D) they are not tied down by local government constraints.

 

Employers must provide ________ to attract and retain young workers because otherwise they will be at a competitive ________.

A) training; status-quo

B) rewards; advantage

C) incentives; disadvantage

D) education; advantage

 

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.

 

Boomerang employees, according to a study published in Personnel Psychology, are statistically more likely to leave a firm if they experienced a negative life event or if they

A) received a better alternate job offer.

B) did not feel appreciated in their current job.

C) were inadequately trained for their current position.

D) had friends at the alternate company offering the job.

 

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.

 

Training and development at all levels of the organization are necessary if employees are to remain current throughout the duration of their employment. Which of the following activities would also be necessary?

A) monitoring and tracking employee development

B) monitoring only key managers

C) tracking only key managers

D) sharing employee tracking information only with key managers

 

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

 

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.

 

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.

 

If employees are committed to the core ________ and ________ of the organization, they are less likely to leave for the competition.

A) mission; outputs

B) values; structure

C) values; hierarchy

D) mission; values

 

Data analytics add new information that helps predict who will leave and who will make the best employee according to Deloitte, the HR consulting company. A key advantage of the new analytics techniques over traditional approaches is that they are ________ rather than ________.

A) reactive; predictive

B) predictive; objective

C) objective; reactive

D) predictive; reactive

 

It is anticipated that the worldwide shortage of highly skilled, college-educated workers will increase significantly by 2020, according to research by McKinsey Global Institute. Some companies are going as far as to redefine the jobs of their experts and are transferring some of their tasks to lower-skilled people inside and outside of their companies. By redefining these ________ knowledge jobs, they address ________ shortages and ________ costs while enhancing job satisfaction.

A) high-value; skill; lower

B) low-value; monetary; decrease

C) high-value; personnel; increase

D) high-value; skill; increase

 

The effective management of diversity can enhance the social responsibility goals of an organization. Other areas where sound management of diverse workforces can improve the effectiveness of an organization and its competitive advantages include all but one of the following

A) resource acquisition

B) marketing

C) organizational flexibility

D) problem creation

 

Human capital and social capital are vital for superior firm performance. If a firm has strong human capital, the firm may exploit this by building social capital. This can be accomplished by

A) requiring workers to work independently of each other.

B) decreasing the interaction of departments within the firm.

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

D) structuring the firm with rigid departmental and employee divisions.

 

In an effort to capture key employees from competitors, firms may attract the symbolic leader of a group within a competing firm and hope others will follow. This has been termed

A) the Columbus effect.

B) the Pied Piper effect.

C) knowledge integration.

D) strategically competitive hiring.

 

Social capital is a source of strength to many firms. Firms leverage their social capital in an effort to create competitive advantages. The social capital of a firm is based on the

A) individual abilities of employees.

B) relationships among the employees of the firm.

C) allocation of the financial resources of the firm.

D) knowledge of an individual.

 

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

 

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

 

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

 

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

 

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

A) explicit; less

B) explicitly; more

C) tacit; more

D) tacit; less

 

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

 

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

 

Tying knowledge workers to a firm is part of the objective of the development of

A) intellectual capital.

B) explicit knowledge.

C) human capital.

D) social capital.

 

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.

 

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.

 

In social network analysis, groups can become too insular and fail to share what they have learned with people outside the group. This is a result of

A) intellect.

B) closure.

C) bridging relationships.

D) diverse knowledge.

 

Advantages of effective social networks for career success include all the following except

A) access to private information.

B) greater redundancy in knowledge sources.

C) access to diverse skill sets.

D) greater power.

 

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.

 

The power of a manager, traditionally, was embedded in the hierarchy of the firm. As organizational structures flatten, this power is repositioned in the ________ of the network. These people are not necessarily at the top of the hierarchy or even experts in their fields.

A) clients

B) brokers

C) employees

D) suppliers

 

Social networks can assist with career success. One of the advantages of having a large social network is

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

B) it creates ways to guard secrets.

C) it can create ways to solve problems alone.

D) it organizes ways to isolate problems from solutions.

 

Structural holes, according to Ron Burt of the University of Chicago, are the ________ gap between two groups and are common in organizations.

A) economic

B) social

C) interpersonal

D) relational

 

An advantage of effective social networks that might help in career success is

A) public information from personal contacts.

B) private information from personal contacts.

C) trustworthy public information.

D) untrustworthy private information.

 

One of the important limitations of social capital is that it can lead to ________ whereby people do not question shared beliefs.

A) skunkworks

B) think tanks

C) isolation

D) groupthink

 

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.

 

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.

 

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.

 

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

 

The Cisco Integrated Workforce Experience (IWE) platform makes recommendations based on all the following except

A) what you are doing.

B) the role you are in.

C) the choices of people like you.

D) competitor choices.

 

The dangers of email include all of the following except

A) spreading of rumors.

B) almost costless.

C) uncontrollable distribution.

D) personal time waster.

 

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.

 

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

 

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

 

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.

 

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.

 

Which of the following is not a characteristic of e-teams?

A) E-team members either work in geographically separated workplaces or may work in the same space but at different times.

B) E-teams may have members working in different spaces and time zones.

C) Most of the interactions among members of e-teams occur through electronic communication channels.

D) E-teams generally perform simple tasks.

 

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.

 

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.

 

The potential for ________ tends to be more prevalent in e-teams than in traditional teams because the geographic dispersion of members increases the complexity of establishing effective interaction and exchanges.

A) team harmony

B) trust

C) process losses

D) profit gains

 

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

 

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.

 

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

 

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

 

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

 

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

 

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.

 

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.

 

Which of the following is not an example of an IP-related litigation?

A) IBM sues Groupon for patent violation.

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.

 

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.

 

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

 

IP is characterized by ________ development costs and very ________ marginal costs.

A) insignificant; low

B) expensive; high

C) significant; low

D) insignificant; high

 

Unlike ________ assets, intellectual property can be stolen by simply broadcasting it.

A) intangible

B) hidden

C) physical

D) expensive

 

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

 

Which of the following is an IP-heavy industry?

A) automobile sales

B) telecommunications

C) contract manufacturing

D) retailing

 

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

 

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.

 

The dynamic capabilities view maintains that success in ________ industries requires capabilities that enable companies to anticipate, shape, and adapt to shifting competitive landscapes.

A) stable

B) declining

C) volatile

D) baseline

 

Dynamic capabilities, therefore, define the ability of the firm to innovate, adapt, and foster change that is favorable to ________ and unfavorable to ________.

A) competitors; customers

B) customers; suppliers

C) customers; competitors

D) suppliers; customers

 

Which of the following is not one of the primary activities included in dynamic capabilities?

A) sensing

B) monitoring

C) transforming

D) seizing

 

IP is characterized by significant ________ costs and very low ________ costs.

A) development; development

B) marginal; actual

C) development; marginal

D) marginal; developmental

 

By using AI in its hiring process, Unilever has improved its hiring process for many reasons except which one of the following?

A) AI is fast and accurate.

B) 80 percent of applicants who make it to job interviews are not offered jobs.

C) AI permitted Unilever to hire a diverse class of employees.

D) Recruiters spent less time reviewing applicants.

 

Dynamic ________ helps to explain competitive advantage in ________ industries.

A) disturbances; evolving

B) capabilities; volatile

C) changes; declining

D) possibilities; growing

 

According to Herminia Ibarra, a leading scholar, the three tactics women can use to be more successfully engaged in networking activities does not include

A) being a bridge across diverse circles in their network.

B) doing it your way by investing in extracurricular activities.

C) joining a professional network of women.

D) joining a professional network of men.