Final (chap. 6)

Question 1

Black swan events?

Answer 1

Unexpected high magnitude events

Question 2

Turkey problem?

Answer 2

life is good for the first 200 days of their life, positive outlook because entire life has been good

Question 3

Bubble?

Answer 3

An increase in the price of a good, based not on the fundamentals of demand or value, but instead on a belief that the price will keep going up

Question 4

Limitations of HR planning models?

Answer 4

1. past can’t always predict the future

2. problem of induction

Question 5

Problem of induction?

Answer 5

• we cannot guarantee that what we have observed in the past will occur in the future
• therefore we cannot claim that inductive reasoning leads to knowledge

Question 6

Inductive reasoning?

Answer 6

process of beginning with many facts or assumptions in order to reach a general conclusion

Question 7

Complex adaptive systems?

Answer 7

have periods of punctuated equilibrium

Question 8

Edge of chaos?

Answer 8

point between rigidity and resistance to change, and oversensitivity and chaos. companies must stay of the edge of chaos

Question 9

Numerical flexibility?

Answer 9

requires organizations to create multiple structures that enable them to effectively align their workforce needs with fluctuating business needs
-ex: hire more people at christmas time

Question 10

Punctuated equilibrium?

Answer 10

periods of calmness and stability are interrupted by chaos or punctuation points. Punctuated equilibrium is hard for companies because their strategies only work in times of stability. So companies need to adapt

Question 11

Functional flexibility?

Answer 11

requires organizations to have access to multiple sources of talent that enable them to integrate and deploy new resources when needed.
-ex: allowing a cashier to work deli

Question 12

Red queen effect?

Answer 12

regardless of how well a species adapts to its current environment, it must keep evolving to keep up with its competitors and enemies who are also evolving.
Thus, the “Red Queen” effect: do nothing and fall behind, or run hard to stay where you are

Question 13

What is the normal distribution of data?

Answer 13

three standard deviations from the mean

Question 14

The red queen effect and its relationship to how companies perform?

Answer 14

if advantage was sustainable, most companies would be superior forever, however high performers regress to the industry mean after three years, but few companies do create new advantages continuously in order to stay on top

Question 15

Non-employee workers?

Answer 15

hired contract workers, not actually part of the firm

Question 16

New organizational structures that reflect the complexities of doing business today have three characteristics?

Answer 16

1. open
2. flat
3. networked structures

Question 17

Core periphery model?

Answer 17

its like a donut: the core employees that work there all the time are in the middle and the contract workers that they hire on need-be basis are on the outside (numerical flexibility)

Question 18

Organizational adaptability model?

Answer 18

highly skilled contract human capital and strategic partners work together with core workers. non-employees are not just assigned to nonstrategic work.
- A.K.A. contract workers are integrated with core workers (functional flexibility)

Question 19

Organizational adaptability?

Answer 19

companies having numerical and functional flexibility

Question 20

Composition: the human capital architecture?

Answer 20

• Strategic knowledge workers- strategic skills directly linked to company’s strategy (R&D scientists)
• Core employees- with skills to perform a predefined job that are valuable to a company, but not unique or difficult to replace (salespeople)
• Supporting labor- less strategic value and generally available in the market
• Alliance partners- unique skills, but not directly related to a company’s core strategy

Question 21

New model: organizational adaptability?

Answer 21

• inner core: functional flexibility

- outer core: numerical flexibility, contractors, outsourcing, temp employees

Question 22

Derived demand?

Answer 22

demand for business or organizational products caused by demand for consumer goods and services
-ex: labor is a derived demand

Question 23

Reasons for engaging contract human capital? (3)

Answer 23

1. gain new knowledge and skills
2. respond to fluctuations in operational demands
3. reduce human capital cost

Question 24

Types of business activity forecast?

Answer 24

• seasonal
• interest rate
• currency exchange
• competitors
• industry and economic
• others

Question 25

Ratio analysis?

Answer 25

assumes that there is a fixed ration between employees needed and certain business metrics. This can justify the need for new positions or layoffs

Question 26

Possible ratios?

Answer 26

- product to employee - revenue per employee - managers to employees - inventory levels to employees - labor costs to all production costs

Question 27

Work interdependency?

Answer 27

degree that contract human capital must work closely with regular employees or are jointly responsible for tasks

Question 28

Criticality of the work? (human capital)

Answer 28

- value and uniqueness | - work that is low criticality would be managed in a more transactional way

Question 29

The four different types that contract human capital can be hired to perform? (engagement modes)

Answer 29

1. project work 2. knowledge work 3. contract work 4. partnerships

Question 30

Project work?

Answer 30

- criticality: Low | - interdependency: High

Question 31

Knowledge work?

Answer 31

- criticality: High | - interdependency: High

Question 32

Contract work?

Answer 32

- criticality: Low | - interdependency: Low

Question 33

Partnerships?

Answer 33

- criticality: High | - interdependency: Low

Question 34

Transactional HR configurations vs. relational HR practices?

Answer 34

- Transactional: money is exchanged for defined specific contributions by worker - Relational: establishing social exchange that focuses on unspecified, broad and open ended obligations on the part of both parties

Question 35

HR configurations more effective for managing contract human capital are comprised of four HR practices?

Answer 35

1. selection 2. appraisal 3. compensation 4. communication * *not training**

Question 36

HR management for knowledge workers?

Answer 36

high commitment

Question 37

HR management for project workers?

Answer 37

high involvement

Question 38

HR management for contract workers?

Answer 38

transactional

Question 39

HR management for partnerships?

Answer 39

high commitment

Question 40

High commitment HR managing?

Answer 40

focus not on continuous commitment but on affective commitment. Goal is to manage these workers in a relational way so they are engaged

Question 41

High involvement HR management configuration?

Answer 41

these workers have skills that can be found easily so the company doesn't want to invest a lot in them, but they value feeling treated as part of the team

Question 42

Transaction cost theory?

Answer 42

a firm will expand until the cost of adding a new transaction within the firm becomes equal to the cost of carrying out the same transaction in an open market

Question 43

Coordination costs?

Answer 43

the time and energy needed to coordinate the activities of a team to enable it to perform its tasks

Question 44

Motivation costs?

Answer 44

information incompleteness prevent knowing if the terms of an agreement are actually mutually accepted or being carried out

Question 45

Existence of uncertainty?

Answer 45

firms create more certainty than transactions in the marketplace

Question 46

Bureaucracy?

Answer 46

a structure with defined hierarchy, functions, and divisions will add more complexity. Complexity grows more rapidly than number of employees.

Question 47

Bureaucracy costs?

Answer 47

one of the most important sources of diseconomies of scale in firms. What are the costs of a given structure? Loss of creativity, slow decision making

Question 48

Network structures?

Answer 48

hold together global business, are more fluid, less permanent, only work if the managers who interact know and trust each other

Question 49

Workforce planning process?

Answer 49

demand analysis, supply analysis, then balancing supply and demand: labor shortages and surplus

Question 50

What if you have a labor surplus? Labor shortage?

Answer 50

- surplus: reallocation of talent | - shortage: contract human capital

Question 51

Low level of interdependency vs high level?

Answer 51

- Low: work must be coordinated among workers | - High: work must be integrated among team

Question 52

Tulip mania?

Answer 52

the first large economic bubble, tulip demand was high but the bulbs were expensive and then it crashed - Amsterdam

Question 53

Why do we need organizational adaptability?

Answer 53

to manage uncertainly like black swan events or bubbles

Question 54

South sea bubble?

Answer 54

British stock company with monopoly to trade with south america, stock inflated as company grew and then it crashed

Question 55

The railroad boom of the 19th century?

Answer 55

rapid industrialization of the US, or in Britain, shares for railroad company increased dramatically and then crashed. 1/3 of the railroads were never built because the company had bad financial planning

Question 56

Flash crash? (2010)

Answer 56

sent the Dow Jones industrial average down nearly 1,000 points in a mere 300 seconds. The largest single-day drop in history, wiping out nearly $1 trillion of wealth

Question 57

What does sustainable competitive advantage require?

Answer 57

organizational adaptability