How much is the brain of Microsoft’s chairman Bill Gates worth? What about the innovative ideas left behind by Apple’s late chairman, Steve Jobs? How might you estimate the value of Geico’s marketing department? These three examples depict highly knowledge-driven organizations that are known for their unique products and ideas. Although many organizations have not seen the meteoric success that these three have, they still make a profit dependent upon the knowledge of their human capital. How might you attempt to put a price tag on the knowledge that stems from the experiences, education, and collaboration among employees?
One method HR professionals may use to estimate the total value of all the knowledge that exists in a target is conducting a knowledge valuation. A knowledge valuation is a subset of the due diligence process and is often one of the hardest aspects of a merger to analyze. It requires HR to comprehensively examine the value of an organization’s intangible assets. Once HR identifies the knowledge and information of a target, it must work with financial experts to make an accurate estimate on the percentage that it contributes to the target’s overall value.
For this week’s Assignment, you first review this week’s articles to explore the importance of researching an organization’s human capital and intangible assets. You then use the premise below and the knowledge valuation documents to apply HR due diligence on a thorough knowledge valuation.
Imagine that you have been placed on the multidisciplinary due diligence team for your present (or future) organization. As the HR professional, you have been specifically tasked with the responsibility of conducting a knowledge valuation on a potential target organization. Using the template provided, you will research an organization where knowledge constitutes a significant percentage of a company’s overall value. These tend to be organizations that you perceive as innovative, creative, and/or have a strong competitive hold on the industry in which they operate.
Real-world connection: The process of knowledge valuations includes HR working with the company’s financial experts to put a quantitative figure on the value of an organization’s knowledge. For this Assignment, you will not be asked to predict this value. You will only be asked to identify and describe the different types of knowledge found within your chosen organization.
To complete this Assignment, complete a knowledge valuation (enclosed) on an organization of your choosing:
· First, choose an organization for which you wish to conduct a knowledge valuation.
o Conduct research to familiarize yourself with the type and the total sum of an organization’s knowledge.
o Review the Knowledge Valuation Exemplar (attached)
o Begin to conduct your knowledge valuation using the questions below as a guide. Note: You do not have to answer these questions in your Assignment. These are meant to guide your understanding of the knowledge valuation process.
§ Human capital
§ What is the total value of knowledge in the organization you chose?
§ For example, identify what types of knowledge it might have about the local community, the knowledge it might have about vendors that it works with as well as the knowledge on its customers or clients.
§ How significant is the knowledge when compared to the overall acquisition price?
§ What is the risk that the acquiring company could lose valuable knowledge, especially via employees leaving post-merger?
§ Intellectual property
§ What products and/or services is the organization known for?
§ What copyrights, patents, and trademarks does the company own?
§ Processes and routines
§ What process-based knowledge might be used to operate the business in such a way that optimizes production quality or quantity, and ultimately maximizes profits?
§ What best practices and optimizing routines might be used?
§ To what extent are these process and procedures documented within the business?
· Then, apply HR due diligence to complete a thorough knowledge valuation on the highly knowledge-driven organization that you have researched.
o Part 1:
§ Download the Knowledge Valuation Template.
§ Finish conducting your knowledge valuation research as outlined in the template directions.
§ Carefully fill in all required pieces found in the Knowledge Valuation Template using the Knowledge Valuation Exemplar document as your guide.
o Part 2: Write a 2-page summary and synthesis that reflects your understanding of the knowledge valuation process:
§ Can all organizations be considered “knowledge driven”?
§ How does the knowledge of an organization directly influence its value?
§ How can knowledge valuations contribute to the due diligence process?
§ What role can and should HR play in the knowledge valuation component of the due diligence process?
|Due By (Pacific Time)||11/05/2014 12:00 am|
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