Valley Technology Inc Organisation Structure

Valley Technology Inc. is a part of the computer storage industry that initially offered a tape drive portfolio of products, which provides backup and recovery capabilities, and it has recently introduced a network attached product which is dedicated to file sharing only. The company encountered dilemmas regarding the most appropriate alternative that would be best to resolve their plan of reducing the company's overall cost, specifically with the tape storage division. The top management has decided to conduct a reduction in force (RIF), which would constitute an involuntary turnover. Before deciding on the final list of the employees who would be laid off, the division's managers assured that they followed the selection criteria, and the list was subject to a legal review before implementing the lay-off. This strategy is beneficial for the company to continue with its operations efficiently and effectively which would enable it to attain profitability; however the company needed to practice open communication with regards to such matter in order for the retained employees to perform well and to move forward from such issue.

Human capital refers to the stock of competences, knowledge and personality attributes embodied in the ability to perform labor so as to produce economic value. It is the attributes gained by a worker through education and experience. Many early economic theories refer to it simply as workforce, which is one of the three factors of production, and consider it to be a fungible resource -- homogeneous and easily interchangeable.

According to Adam Smith, human capital is the acquired and useful abilities of all the inhabitants or members of the society. He further explained that the acquisition of such talents, by the maintenance of the acquirer during his education, study, or apprenticeship, always costs a real expense, which is a capital, fixed and realized, as it were, in his person. These talents, as they make a part of his fortune, so do the talents likewise that of the society to which he belongs. Moreover, human capital is an intangible asset as it is not owned by the firm that employs it. It is basically a way of defining and categorizing people's skills and abilities as used in employment and otherwise contributes to the economy.