Are people always an organizations most valuable asset?  Why or why not?  Name other strategic or valuable assets of organizations.   How do they compare?  Explain.

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Ashley Kannan | Middle School Teacher | (Level 3) Distinguished Educator

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A case can be made using statistics that different elements constitute an organization's most valuable asset.  I would suggest that people are the most valuable asset in an organization.  All organizations depend on people being able to execute message, deliver on end performance, and chart a course for an organization's future. People become the most valuable asset in an organization.

The human resource in an organization consists of people who help to create the conditions of success or failure. Employees who are not valued can leave an organization.  There are significant realities for organizations that must acknowledge turnover or constant departure of employees.  From a financial standpoint, turnover hurts organizations: "It costs businesses about one-fifth of a worker’s salary to replace that worker."  Ensuring that skilled workers remain with an organization provides long- term financial assistance to an organization, helping to sustain organizational success and continuity.  This is one example where an organization's most important asset becomes people.  From a psychological point of view, organizations that do not value their employees as the most important asset can find themselves victimized by disengagement of employees.  Estimates indicate that disengagement "costs American business about $300 billion a year."  The culture of disengagement also facilitates the belief that an organization does not validate its employees, an attitude that works against the development of the company and the zeal towards its advancement.  In these realities, people have to be seen as the most important resource in an organization.  When the focus of the organization moves away from its people and ensuring that they are placed in the best position possible for success, success becomes a deferred vision for all.

There are other significant assets within an organization.  Its propensity for developing constant revenue streams and the development of products are critical.  At the same time, the organization's long term vision to develop future revenue streams as well as new and cutting edge products are essential to an organization's well- being.  When these elements are absent, an organization struggles to maintain viable in the marketplace.  Yet, all of these endeavors are accomplished through people.  Being able to gear their efforts though validation and enthusiastic support of the organization is essential.  Organizations that value people or can make people feel validated end up harnessing their most important resource and go farther in ensuring the short and long term success of their particular organizations. 

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caledon | High School Teacher | (Level 3) Senior Educator

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This is a delicate question because it depends entirely upon our perspective;

  • Are we talking about all the people associated with the company, including the owners, board members, stockholders etc?
  • How are we defining the terms "asset" and "value"?

We can get two different answers if we approach the question from two different directions; a macroscopic view, and a microscopic one.

By macroscopic, I mean looking at the big picture of the organization; what is it doing, what are its objectives, and what resources does it have. In this sense, people are definitely the most valuable asset, because they are the ones who initiate all of the action. Nothing about the organization's actions, objectives or resources will change unless a human makes the decision that they will. If the organization is faced with an uncontrollable external change, people will decide how to adapt to it.

On a microscopic scale, I think people are not necessarily as valuable. By microscopic, I mean the specific act of "getting the job done". The nature of the world that we have created often results in interchangeable bodies, performing tasks that many other people could do; think of fast food, for example. At this scale, the individual does have some effect, such as by their honesty and demeanor, but nonhuman assets, such as machinery, are at least equally important. Consider that a manufacturing business is useless if its machines don't work.

On the other hand, the manufacturing business is equally useless if it has no people to operate the machines. Thus, people do still hold significant power at this level; however the extent of their individual actions is dampened by their position. No amount of good work will guarantee that a person at this level will have the same "value" as one working in the macroscopic scale. The market, especially following the recession, has often demonstrated that there is always someone willing to work for a given wage, and that no one is irreplaceable.

The great advantage enjoyed by humans is their flexibility; other forms of assets, such as machines and money, cannot change what they are, and their value is subject to human decision. The floppy drive that was once installed in my computer is now entirely useless to me, and pretty much everyone else. However, the people who designed and built it are surely still working. We have several other differences; our value cannot be manufactured, assessed or preserved in the same way as inhuman assets, and our value is often limited and determined by our position, rather than a purely meritocratic process, in contrast to inhuman assets. For example; if faced with a series of machine parts, the organization would likely choose the one that is least tarnished and most fitting to the original plans. However, when it comes to humans, it is entirely possible that those working in the macroscopic view are completely unsuited for that work, while more worthy people at the microscopic level are invisible to the organization because of their lower position.

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