MOS 4410 - Chapter 4 Textbook/Exam Notes.docx

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Management and Organizational Studies
Management and Organizational Studies 4410A/B
Raymond Leduc

Chapter 4: Assessing the Intellectual Assets of the Firm Case Study - Cervelo bicycles  compete in mature industry with little growth from year to year, most bikes come from China and are sold for a few hundred dollars at Canadian Tire or Wal-Mart - Main concerns around operational efficiencies, scale, logistics, and sourcing inexpensive components - Reason for success = Innovation and design - They have little marketing or advertising  in Beijing Olympics they won 3 golds, 5 silvers, 2 bronze Peter Drucker  Knowledge workers and the knowledge they possess are the primary resource of the economy overall Individuals often have more loyalty to their peers than to their current employer The Central Role of Intellectual Capital in Today’s Economy - Today more than 50% of GSP in developed economies is knowledge based (intellectual assets and intangible people skills) - Growing importance of knowledge paired with the move by labour markets to reward knowledge work tells us that investors are paying for talents, capabilities, sills and ideas (intellectual capital) NOT physical resources - Intellectual capital = firm’s market value – book value - Intellectual Capital  intellectual property, human capital, social capital, brands o Managing intellectual assets is a whole life cycle of creation, codification, valuation, protection and leveraging of such assets - Human Capital  individual capabilities, knowledge (tacit and explicit)< skills and experiences - Social Capital  network of relationships that individuals have throughout the organization o Formal, informal, personal, professional, organizational - Explicit Knowledge  cofidied, documented, easily reproduced, widely distributed (software code, patents) - Tacit Knowledge  in the minds of the employees; based on experiences and backgrounds - Intellectual Property  copyrights, trademarks and patents - Socially Complex Processes include leadership, culture and trust  represent the glue that hold the organization together - People are less likely to leave an organization if there are structures to promote teamwork and information sharing, strong leaders to encourage innovation, and cultures that demand excellence and ethical behaviour Human Capital: The Foundation of Intellectual Property - Employees must recruit talented people and their skills/attitudes must be continually developed, strengthened and enforced - Attracting, hiring and recruiting is the first step in building intellectual capital - Developing human capital at all levels and specialties so they fulfill their potential is the second step - Must provide working environment and intrinsic and extrinsic rewards to retain the best and brightest employees (without employee retention the above two steps are meaningless) is the final step 1. Attracting Human Capital Input control: attracting and selecting the right person - Many argue firms can identify top performers by focusing on mindsets, attitudes social skills and general orientations of employees - “Hire for Attitude, Train for Skill” o Southwest airlines ask employees to make 5 min presentations about themselves. Those who listen and encourage peers are favoured over those who focus on polishing up their presentations - “the single best predictor of future behaviour is past behaviour” - Sound Recruiting Approaches and Networking o Current employees are the best source for new ones because their reputation is on the line 2. Developing Human Capital - Most experts believe training is essential - Encouraging Widespread Involvement - Monitoring Progress and Tracking Development o Citibank tracks 10,000 employees worldwide  how they are doing, what skills they need to work on, where else in the company they might thrive - Evaluating Human Capital o Individuals must share knowledge and work together constructively to achieve collective goals o 360-degree evaluation, and feedback systems are implemented (superiors, direct reports, colleagues and internal/external customers rate an employee) o Evaluating systems must ensure manager’s success does not come at the cost of compromising the organization’s core values 3. Retaining Human Capital - Talented employees are like “frogs in a wheelbarrow” they can jump out at anytime - Individual’s identification with organization’s missions and values, challenging work, stimulating environment, financial and non-financial rewards and incentives play a critical role in retaining human capital - Identifying with an Organization’s Missions and Values o those who identify are less likely to leave and work for competitors o BC Biomedical Laboratories – named best employer third year running – a flat organization allows every employee to be direct contact with patients and have a clear image of where
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