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The competitive factor: training and development as a strategic management task

Peter Mhlemeyer and Maxine Clarke

Introduction: training and development as an incomplete management task


The political and economic changes in eastern European countries and the increasing attraction of cheap labour countries as production locations for western European companies give rise to the notion that western Europe as a production location and therefore employment in western Europe can be secured on the one hand through a constant increase in production and on the other hand better quality in goods and services. This, however, requires a highly competent, skilled workforce. Indeed, There is widespread consensus among commentators and politicians alike that training should be encouraged, since it has a desirable effect on productivity and improves national economic performance (Ashton and Felstead, 1995). Perhaps as a consequence of the above, companies in Germany have shown a yearly increase in expenditure on training and development of approximately 83 billion marks (Institut der Deutschen Wirtschaft, 1994). This gure is from 1992 and shows an increase of almost 30 billion marks over 1987. The gure for expenditure in Britain is somewhat nebulous; the estimated annual expenditure of 14.4bn given by the Training Agency (1989) is disputed. Nevertheless, what is clear is that companies are investing in training and development. Almost half of the amount spent in Germany (40 billion marks) has been nanced by the companies themselves. A survey investigating the future of training and development showed that only 6 per cent of those companies questioned felt that there would be a decrease in training activities within their organization, whereas approximately 30 per cent stated that the importance of training and development would rise and the remaining felt that training and development would continue to play an important role (Institut der Deutschen Wirtschaft, 1994). The human potential within an organization is a major competitive factor: in global competitiveness, where shorter product life cycles, benchmarking and faster information transfer are the keys to success, human resources (whose skills are often company-specic) provide a mid- to long-term advantage for companies. They play a strategic role: todays investment in the workforce secures the 4

The authors Peter Mhlemeyer is a Professor at Fachhochschule Worms, European Business Management. Maxine Clarke is Senior Lecturer at HEAO Arnhem, The Netherlands. Abstract The political and economic changes in eastern European countries and the increasing attraction of cheap labour countries as production locations for western European companies give rise to the notion that western European employment can only be secured by a constant increase in production coupled with better quality in goods and services. This requires a highly skilled workforce; indeed the human potential within an organization is a major competitive factor. In global competitiveness, where shorter life cycles, benchmarking and faster information transfer are the keys to success, human resources provide a mid- to long-term advantage for companies. They play a strategic role: todays investment in the workforce secures the innovation and competitiveness of tomorrow. Therefore, company training and development should be viewed as an important management task. Discusses the management tasks for company training: analysing training requirements, preparation and implementation, knowhow transfer within a company and controlling training and development, while highlighting the importance of training and development within the overall strategic planning process.

Journal of Workplace Learning Volume 9 Number 1 1997 pp. 411 MCB University Press ISSN 1366-5626

The competitive factor

Journal of Workplace Learning Volume 9 Number 1 1997 411

Peter Mhlemeyer and Maxine Clarke

innovation and competitiveness of tomorrow. Therefore, company training and development should be viewed as an important management task (Thom and Blunck, 1992). Many companies are aware of this importance (otherwise how can the increasing expenditure on training and development, even in times of economic crisis, be explained?). Nevertheless, in many companies, the intra-organizational management of this strategic resource leaves much to be desired. Planning for training and development in response to specic requirements of the organization and its development (cf. Staudt, 1995) is not always a deliberate measure; rather it often occurs only as a result of problems (e.g. with the realization that new technology cannot be introduced competently without a corresponding increase in investment in labour). Results of a recently published empirical study on strategic training (University of Chemnitz, 1995) show that only 18 per cent of those companies questioned strategically plan their training and development requirements. The majority of companies stated that planning for training and development occurred only as a result of problems arising at the workplace. An example of problem-directed versus strategicallyoriented planning for training and development is shown in Figure 1. On the surface it appears that companies are prepared to provide the resources required for a training and development programme; nevertheless the planning and
Figure 1 Planning for training and development: problem-directed versus strategically-oriented Example Problem directed Strategically oriented Analysis of skill structure and potential Planning for new technology and analysis of training needs Investment in technology plus training from supplier/manufacturer Introduction of technology

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management appear to take the form of ordering from a travel brochure, i.e. the training arrives pre-packaged. The most that can be expected in the way of preparation is a map showing the route to the seminar location and, in terms of monitoring the success of the training, this often extends only as far as asking if the trainer was good, the participants friendly, the accommodation and food okay? With this attitude, every investment in training, whatever it costs, is a waste of money. Employees take time off work in order to attend seminars and are therefore missing from their workplace. Often, on their return to the workplace, instead of a feeling of success, employees can end up frustrated, as the connection between the information learned and that required for work is not clear, with the result that new know-how is not effectively implemented at the workplace. Training is an extremely complicated management task, when one considers the objectives that it should full (for example, strengthening company competitiveness through the development of personnel). The success of training is dependent on whether the many varied tasks implicit within the training process are recognized and competently managed. In order to understand the complexity of the training process it should be structured in its ideal form (Staudt et al., 1993). Four stages of the process can be identied and these provide the core of standard procedures for training planning. Once understood, they also provide the requirements for successfully managing the process. The four stages are: 1 analysing the company training requirements; 2 preparation and implementation of the training; 3 securing success: know-how transfer within the workplace; and 4 controlling training and development.

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Planning and investment in new technology Introduction of technology Lack of know-how leads to problems with technology Training of employees

Management tasks for company training


Analysing the company training requirements Delayed reactions to technical developments, changes in the market, under-utilized plant and machinery capacity and problems with recruitment in a company are often a result of a decit in skills, the root cause of which is the lack of planning for the necessary training 5

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Peter Mhlemeyer and Maxine Clarke

and development. This can create costs for a company as well as prevent the company from gaining/maintaining competitive advantage. The rst task within a managementguided training and development programme, therefore, must be systematically to analyse and pinpoint the training needs of the employees. Specically, changes in the following structural factors may require a rethinking with respect to training (Staudt et al., 1994): At market level: that is through changes in the market (for example changes in customer behaviour because of environmental awareness, changes in values, competitive pressure, changes in legislation). This can lead to new product preferences or even to a demand for totally new products and services. It may be necessary to nd new markets and/or new niches for new products and to prepare employees for such changes, to integrate them and upskill them for the change process. For example, the new EU Environmental Audit legislation will necessitate training and/or retraining if the company operates in markets that will be affected (Mhlemeyer, 1995). Technology: that is the introduction of new technology in the organization (for example multimedia, environmental production processes, new methods of production) requires training employees in the use of the technology. It should not be the case that such training rst occurs when the new technology is already in place; an early recognition of the potential problems that can arise and then measures to ensure that employees are fully informed and properly trained can lead to a reduction in the friction caused by the introduction of such technology. Human resources: that is the recruitment of new employees or the development of new tasks implies the need to train it may be necessary to train new employees (in, for example, electronic data processing, language skills, management tasks), or employees who, because of new tasks within the company, need to be retrained or trained to work in teams or groups (the concepts of teams, team leadership, group objectives, etc., that is personnel development is to be considered alongside training requirements (cf. Hofmann, 1992)). 6

When the above structural factors are taken into consideration, a concrete analysis of training requirements can be carried out. However, this implies that management is aware of the need for a training analysis and that the results of this analysis are integrated within the overall planning process, so that there is a correlation between the development of the organization and the training needs of the organization. Preparation and implementation of the training Another important task within the process is the preparation and implementation of training. Once the training needs have been analysed, strategies must be developed as to the structure, time and place of the training (see Figure 2). These must be developed in line with the set objectives for employee training. The following points should be considered here: Individual training Is it the task of each individual employee to take the training initiative (self-directed learning), that is to decide what help is required from the organization and what resources are available for his/her training (for example time off work, information from line managers, reimbursement of course fees, travel expenses, etc.)? Questions that should be asked include: Should he/she carry out this training during working hours on-the-job, for example learning using a PC training programme interactive learning at work? Should the training take place out of working hours, at home near-the-job, for
Figure 2 Training strategies Individual initiative

External

Training

Co-operation/ joint

Internal

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Journal of Workplace Learning Volume 9 Number 1 1997 411

Peter Mhlemeyer and Maxine Clarke

example working through pre-prepared practice material, etc? Should the training be carried out by external bodies off-the-job, for example at a language school, evening classes, etc.? For explanations of on-the-job, near-the-job and off-the-job, see Scholz (1991). Internal training Should the training be carried out within and by the organization? What preparation is required and what resources should be provided? (Compare recent developments by large businesses, for example Volkswagen AGs outsourcing methods, that is when a training department becomes independent but continues to carry out projects mainly for that company.) Questions that should be asked include: Is the training to be integrated into the normal routines of the workplace on-thejob, for example training at the workplace by line managers or colleagues? Is the training to be carried out by an internal training department or within a project group-near-the-job, for example learning through discussion groups with various participants, such as quality circles, innovation groups or Kaizen groups? Can individual training requirements be satised through internal company seminars off-the-job, for example are special seminars held for management and/or highly skilled employees? Co-operation/joint training Does training take place jointly with subsidiaries or with other companies, for example with suppliers or customers? How much a possibility/reality is joint training, for example through: short-term exchange of employees from different subsidiaries on-the-job; joint training rooms and premises nearthe-job; or joint internal seminars and information exchange off-the-job? The use of such methods is particularly interesting for small to medium-sized enterprises (SMEs) which need to pay attention to costs (cf. Weimar, 1991). External training Should training be organized and carried out by external people/institutions? Because of a lack of organizational and/or technical 7

resources, training is carried out by external bodies, for example: when new technology is introduced, the supplier carries out the product introduction wholly or partly at the workplace on-the-job; courses are carried out at intervals by the supplier at his/her premises near-the-job; employees are sent to seminars offered by external companies (e.g. software seminars) and these are paid for by the company off-the-job. The preparation for training needs is therefore an extremely complicated management task. Many factors need to be regarded as strategic tasks by the management. The clarication and understanding of these factors are a prerequisite for successful implementation of training. Securing success: know-how transfer at the workplace It could be argued that for many companies the training process ends once the employee has completed the actual training programme. Ensuring that know-how transfer takes place and that the training is then put into practice in a working situation is often neglected: more probable is the assumption that the new knowledge can be used somehow and sometime. The fact that such neglect can lead to the loss of a potential advantage is recognized rarely, but it is actually this particular part of the training process, the transfer and subsequent use of know-how, that can be the key to success. With regard to how training should be implemented and how its success can be ensured two questions need to be answered: 1 What impediments and difculties can arise for the participant when new knowhow has to be transferred to the workplace? 2 How can know-how be transferred to other employees in the company? With regard to the rst question, changes within the organization and the subsequent need for new abilities and skills can lead to the development of resistance to change in the employees. This resistance can be structured into three categories: personnel, organization and technical (Staudt and Mhlemeyer, 1995). It is therefore necessary, from a strategic point of view, to identify these resistances and, where possible, to minimize and/or

The competitive factor

Journal of Workplace Learning Volume 9 Number 1 1997 411

Peter Mhlemeyer and Maxine Clarke

remove them. Such resistance may take the form of: Colleagues, line managers and employees from other departments may have reservations about the introduction of know-how gained by participants of training courses (for example because the colleague feels disadvantaged, the line manager does not possess the know-how or because more work is created for employees in other departments personnel resistance). Organizational problems may arise through the introduction of new techniques and know-how, because the introduction of such new methods may impact on other processes and other departments which are still operating under old methods, for example networking PCs can lead to changes in all departments organizational resistance. Technical problems can arise through the mismatch of new knowledge and old technology within the workplace, for example the know-how to use new software in an organization in which the current computers do not have enough capacity technical resistance. The second question looks at trying to achieve the maximum possible from the training. As part of the planning process for any training programme, it is essential to ensure that the individual participant(s) achieve their objectives. It is, however, equally important to ensure that the know-how is then passed on to other, relevant employees within the company, i.e. the snowball effect. It may be said that one of the consequences of direct training of employees should be the transfer of knowhow to other employees within the company. This indirect training also has certain requirements at different levels: The direct participant level The strategic task here is to identify the role of the participant as a type of internal trainer, to prepare him/her for this role and to motivate him/her, that is the participant needs to be aware of the role that he/she will play in the transfer of know-how. The use of group and team work to integrate and facilitate the transfer is of importance here. The Meister system in Germany is relevant here, whereby foremen have had to take on new roles within companies and have had to be trained to work in teams in order to act as indirect trainers. 8

The indirect participant level The participants in the snowball system of know-how transfer also need to be included in strategic planning. On the one hand it is vital to try to minimize the possible resistance towards the direct participant as discussed above and to attempt to motivate and support them through the training process (for example, through increasing their personal skill level, their performance and motivation in the workplace will be improved). On the other hand, it is important to match the new knowhow to the current skill level of the indirect participants in order to prevent possible frustration and demotivation from arising incompatibility. Company level: organizing the indirect training measures From the viewpoint of management, the need to prepare the indirect training methods should be recognized early in the process. These should be incorporated with the direct training methods. In particular the following points should be considered: Who are the participants in the indirect training and what know-how can and should be transferred? Should the indirect training take place onthe-job, near-the-job or off-the-job? Should, for example, internal workshops, seminars, etc. be organized or is it possible to carry out the training within the framework of the workplace? When should this training take place in order to cause as little disruption to the working routine as possible? How should quality control be built into the process in order to monitor the success of the snowball process and to ensure that the know-how is transferred in the correct way to be effective for the organization? This must be carried out in such a way that the trainer is not frustrated or demotivated. Figure 3 shows the organizational tasks involved in the internal transfer of know-how within a company. Controlling training and development The end of a training programme is, of course, not the end of management involvement in the training process. Management tasks include the implementation of monitoring and control systems. The control phase of the training process should be structured in such a way that a post-analysis of

The competitive factor

Journal of Workplace Learning Volume 9 Number 1 1997 411

Peter Mhlemeyer and Maxine Clarke

Figure 3 Internal transfer: organizational tasks

Direct participant training Know-how development in a company

Know-how transfer and indirect participant training Organizational support and overcoming resistance to change

individual training measures is carried out. This should take the form of an investigation into the actual content of the training and its success. It is also important that a review of the whole training process is completed as this, together with the post-analysis, gives a template for further training programmes and is, therefore, a part of the overall control system. The learning by mistakes principle helps to improve on present and design future training measures and to ensure their effectiveness. Measures for controlling success The measures used to judge the success/failure of training programmes denitely need to be pre-dened, that is the objectives of a particular form of training need to be determined before the training process starts and then, on completion, need to be reviewed in order to measure the discrepancy (or not) of expected results against actual outcomes. Only then can an evaluation of the training process be made. This type of control can take place either at individual or group level through: debrieng sessions with the line manager; written evaluation of the training programme, either through a questionnaire or through a report completed by the participant(s); observations at the workplace is the know-how actually being implemented?; transfer methods (Meier and Schindler, 1995). Through the use of one or a combination of these control methods it is possible to compare achieved results with expected results and therefore to draw up a decit analysis. Further debrieng sessions with line managers, trainers or organizers should then highlight the perceived weaknesses of the 9

training process. The existence of problems/weaknesses within the process and the recognition of these enable an overall control of the training process to take place. The data and information which have thus been gathered can be used then, within the framework of a formative control programme (von Landsberg and Weiss, 1992) to highlight weaknesses in the planning and application of current and future training programmes. If, for example, particular problems were experienced with supplier-based training, then corrective measures, such as discussions with the supplier, can be undertaken in order to avoid future ineffectual training. Controlling costs Within the nal evaluation of a training programme a control of those costs arising from the training should be undertaken. These include not only items such as seminar fees for external seminars, but also, most importantly, those costs caused by the absence of the employee plus organizational and managerial costs. The strategic management task here is to make sure that an analysis of total costs is undertaken not only to ensure that individual training measures can be costed and controlled, but also to ensure that the costs on a monthly, half-yearly or yearly basis are transparent. This allows decisions as to the structure of future training programmes to be made.

Conclusion: from managing training and development to managing knowhow


The future of Western Europe as an environment for business is dependent on how far the disadvantages caused by cheap labour

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Peter Mhlemeyer and Maxine Clarke

countries can be compensated for by innovation, an increase in productivity and quality advantages. Market, legal and demographic changes, but above all, technical and environmental challenges require a business to acquire and manage know-how. A business needs to recognize how know-how as a competitive factor can be organized and transferred internally, as well as developed within the framework of the organization. The deciding factor needed to meet an organizations future challenges is the training and know-how of management and employees. Their knowledge and skills form the basis for future decisions and are the strategic factors for the continued development of the organization. In a time where the life cycle of know-how is decreasing constantly and the information required by a company is becoming more and more complex (both qualitatively and quantitively), plus where the supply within the training and development market is confusing, it is important to develop a system for managing training, within which the needs and requirements of the company can be analysed and appropriate measures taken. This situation more often than not will also require a continued increase in nancial investment. One problem here is that it is difcult to measure the correlation between the implementation of training as described above and the overall success of the organization. The extent to which the success of the organization can be attributed to the use of strategically planned training is difcult to prove and can, therefore, be difcult to justify. This is particularly the case when the success of the company is measured in nancial terms, as there is little evidence to suggest that training per se can improve the nancial performance (Ashton and Felstead, 1995). This is precisely the reason why the planning and management of training must be put into the hands of senior management, who must use their inuence to explain the need for training, and to support and to promote it. In the current economic climate the process of training and developing know-how and its management can be left no longer to fate and luck. It must be recognized that: Know-how and therefore training is a potential competitive factor, which is often company-specic and which can be achieved only on a long-term basis. It is vital to the overall success of the 10

organization and must be given a corresponding amount of management support. Training cannot be used as a fringe benet, or as a reward for management, or as a last resort in times of employee crisis; it is much more the case that there should be a consensus within the organization that training makes a vital contribution to the development of the organization as a whole, even if its success is difcult to quantify. A training programme needs to be integrated within the strategic planning of a business and its aims; the methods of implementation and the required resources need to be agreed within the organization. Know-how and training should be accepted as a constant, analytical task and as a process that, with its strengths and weaknesses, requires constant improvement and updating. It is vital not only that those employees/management involved in the personnel or organizational areas are involved, but also that all departments and employees within the organization have the opportunity to contribute to the planning and implementation of the training process.

References
Ashton, D. and Felstead, A. (1995), Training and development, in Storey, J. (Ed.), Human Resource Management: A Critical Text, Routledge, London. Hofmann, L. (1992), Qualikationsplanung in der IBM Deutschland Schlssel einer erfolgreichen Personalentwicklung (Planning for qualications the key to successful personnel development), in von Landsberg, G. und Weiss, R. (Eds), Bildungscontrolling, Schffer Poeschel, Stuttgart. Institut der Deutschen Wirtschaft (1994), Wirtschaftsbrief, Vol. 47 No. 11, November. Mhlemeyer, P. (1995), Im Umweltsektor gibt es kaum Konzepte zur Qualikation fehlende Personalentwicklung behindert Entwicklungschancen (There are few concepts for qualications in the environmental sector a lack of personnel training hinders development), Blick durch die Wirtschaft, Vol. 40 No. 2. Meier, S. and Schindler, J. (1995), Erfolgssteuerung in der Personalentwicklung-Transfersicherung durch Mitarbeitergesprche (Success factors in personnel development ensuring transfer by employee communications, in Personalfhrung, Vol. 11, pp. 956-8. Scholz, C. (1991), Personalmanagement, Vahlen, Mnchen.

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Journal of Workplace Learning Volume 9 Number 1 1997 411

Peter Mhlemeyer and Maxine Clarke

Staudt, E. (1995), Integration von Personal- und Organizationsentwicklung in der beruichen Weiterbildung (Integration of personnel and organizational development in in-house training), in Arnold, R. and Lipsmeier, A. (Eds), Handbuch der Berufsbildung, Leske und Budrich, Opladen. Staudt, E. and Mhlemeyer, P. (1995), Innovation und Kreativitt als Fhrungsaufgabe (Innovation and creativity as a management task), in Kieser, A. (Ed.), Handwrterbuch der Fhrung, Enzyklopdie der Betriebswirtschaftslehre, 2nd ed., Schffer Poeschel, Stuttgart, pp. 1200-14. Staudt, E., Bestel, S. and Mhlemeyer, P. (1993), Weiterbildungshandbuch ein Handbuch fr das Management von Weiterbildungsprozessen im Betrieb, IAI, Bochum. Staudt, E., Bestel, S. and Mhlemeyer, P. (1994), Das Management von Weiterbildungsprozessen fr betriebliche Fhrungskrfte (The management of

training processes for senior managers), Grundlagen der Weiterbildung, Vol. 5, pp. 307-10. Thom, N. and Blunck, T. (1992), Strategisches Weiterbildungs-Controlling (Controlling strategic training), in von Landsberg, G. and Weiss, R. (Eds), Bildungs controlling, Schffer Poeschel, Stuttgart. Training Agency (1989), Training in Britain: A Study of Funding, Activity and Attitudes Employers Activities, Training Agency, Shefeld. University of Chemnitz (1995), Handelsblatt, Vol. 12, p. K1. von Landsberg, G. and Weiss, R. (1992), Bildungscontrolling, Schffer Poeschel, Stuttgart. Weimar, S. (1991), Kooperative Unternehmensstrategien unter Betrieben das Beispiel Weiterbildungskooperation (Co-operative company strategies an example of co-operative training), in Hilbert, J. (Ed.), Neue Kooperationsformen in der Wirtschaftknnen Konkurrenten Partner werden?, Leske und Budrich, Opladen, pp. 38-94.

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