Recognizing a

Firms
Intellectual
Assets: Moving
beyond a Firms
Tangible
Resources

Chapter Four

McGraw-Hill/Irwin

Copyright 2012 by The McGraw-Hill Companies, Inc. All rights

Learning Objectives
After reading this chapter, you should have a
good understanding of:

LO4.1 Why the management of knowledge

professionals and knowledge itself are so
critical in todays organizations.
LO4.2 The importance of recognizing the
interdependence of attracting, developing
and retaining human capital.
LO4.3 The key role of social capital in leveraging
human capital within and across the firm.
LO4.4 The importance of social networks in
knowledge management and in promoting
career success.
4-2

Learning Objectives (cont.)

LO4.5 The vital role of technology in leveraging
knowledge and human capital.
LO4.6 Why electronic or virtual teams are
critical in combining and leveraging
knowledge in organizations and how they
can be made more effective.
LO4.7 The challenge of protecting intellectual
property and the importance of a firms
dynamic capabilities.
4-3

The Central Role of Knowledge

in Todays Economy

Knowledge economy
wealth is increasingly created by effective
management of knowledge workers instead
of by the efficient control of physical and
financial assets.

4-4

The Central Role of Knowledge

in Todays Economy
Intellectual capital also includes
assets such as reputation, employee
loyalty and commitment, customer
relationships, company values, brand
names, and the experience and skills
of employees

4-5

Ratio of Market Value to Book Value for

Selected Companies

Exhibit 4.1

4-6

Human Capital: Three

Interdependent Activities

Exhibit 4.2
4-7

Attracting Human Capital

Sound recruiting approaches
Firms must take recruiting seriously
Challenge becomes having the right job
candidates, not the greatest number of them

4-8

An Excerpt from General Electrics

360-Degree Leadership
Assessment Chart

Exhibit 4.4

4-9

Retaining Human Capital

Challenging work and a stimulating
environment
opportunities that lower barriers to an
employees mobility
within a company

4-10

How Three Companies Are Keeping

Their Best During Tough Times

Exhibit 4.5

4-11

The Vital Role of Social

Capital
Attraction, development and retention of
talent is a necessary but not sufficient
condition for creating competitive
advantage
Knowledge workers often are more loyal
to their colleagues and profession than to
their employer

4-12

Social Networks: Implications

Social network analysis
depicts the pattern of interactions among
individuals and helps to diagnose effective
and ineffective patterns
helps identify groups or clusters of individuals
that comprise the network, individuals who
link the clusters, and other network members.
helps diagnose communication patterns and
communication effectiveness
4-13

A Simplified Social Network

Exhibit 4.6

4-14

Protecting the Intellectual

Assets of the Organization
Dynamic capabilities
a firms capacity to build and protect a
competitive advantage, which rests on
knowledge, assets, competencies,
complementary assets, and technologies.

4-15