Chapter 2

Strategic Training

Learning Objectives:

● Discuss how business strategy influences the type and amount of training in a company
● Describe the strategic training and development process
● Discuss how a company’s staffing and human resource planning strategies influence
training
● Explain the training needs created by concentration, internal growth, external growth, and
disinvestment business strategies
● Discuss the advantages and disadvantages of centralizing the training function
● Explain a corporate university and its benefits

Introduction:

Business strategy: Integrates the company's goals, policies, and actions. Influences how the
company uses: Physical capital, financial capital, and human capital

Goals- What the company hopes to achieve in the medium- and long-term future

Strategy determines:

● Amount of training required for current or future job skills

● Extent to which training should be customized for particular needs
● Extent to which training is restricted to specific groups of employees or open to all
● Extent to which training is planned and systematically administered
● Importance placed on training compared to other HR practices

Learning as a Strategic Focus:

Learning organization: A company that has:

● An enhanced capacity to learn, adapt, and change

● Carefully scrutinized and aligned training processes with company goals
● Training as a part of system designed to create human capital

Key Features of a Learning Organization (Table-2.1)

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Supportive Learning Environment:

• Employees feel safe expressing their thoughts about work, asking questions, disagreeing with
managers, and admitting mistakes.
• Different functional and cultural perspectives are appreciated.
• Employees are encouraged to take risks, innovate, and explore the untested and unknown, such
as trying new processes and developing new products and services.
• Thoughtful review of the company’s processes is encouraged.

Learning Processes and Practices:

• Knowledge creation, dissemination, sharing, and application are practiced.

• Systems are developed for creating, capturing, and sharing knowledge.

Managers Reinforce Learning:

• Managers actively question and listen to employees, encouraging dialogue and debate.
• Managers are willing to consider alternative points of view.
• Time is devoted to problem identification, learning processes and practices, and
post-performance audits.
• Learning is rewarded, promoted, and supported.

Implications of Learning for Human Capital Development:

The emphasis on learning has several implications:

1. There is a recognition that learning should help:

● Employees improve performance
● Achieve business goals
But learning should occur on as needed basis, need to support informal learning and
learning should be supported psychologically
2. Unpredictability of business environment
3. Target is to acquire tacit knowledge
4. Must be supported with physical, technical recourses as well as psychologically.

Key capabilities:

● Aligning learning goals to business goals

● Measuring of business impact of learning
● Movement of learning outside the company
● Developing competencies for critical jobs
● Integrating learning with other human resource functions
● Including classroom as well as e-learning

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● Designing and delivering leadership development courses

The Strategic Training and Development Process:

❖ Mission – the company's reason for existing.

❖ Vision – the picture of the future that the company wants to achieve.

❖ Values – what the company stands for.

❖ SWOT analysis – an analysis of the company's operating environment to identify

opportunities and threats as well as an internal analysis of the company's strengths and
weaknesses.
❖ External analysis: Examining the operating• environment to identify opportunities and
threats .The Company has to consider its competition.
❖ Internal analysis: Identifies the company’s strength and weaknesses. Examines the
available quantity and quality of financial, physical, and human capital.
❖ Strategic choice: The strategy believed to be the• best alternative to achieve the
company goals

a) Formulating the Business Strategy:

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Possible Business Goals Influenced by Training:

● Productivity
● Reduced scrap and rework
● Increased customer satisfaction
● Reduced operational risks and accidents due to employee carelessness
● Increased employee satisfaction and retention
● Increased time and value-producing goods, such as increase in billable project time hours
● Better management decisions
● Increased development of human capital
● Succession planning needed for competitive advantage and growth.

Decisions a Company Must Make About How to Compete to Reach its Goals:

1. Where to compete? In what markets (industries, products, etc.) will we compete?

2. How to compete? On what outcome or differentiating characteristic will we compete?

Cost? Quality? Reliability? Delivery? Innovativeness?

3. With what will we compete? What resources will allow us to beat the competition? How will
we acquire, develop, and deploy those resources to compete?

b) Strategic training and development initiatives: Learning-related actions that help to

achieve business strategy

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Questions to Ask to Develop Strategic Training and Development :

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c) Training &Development Activities:

These activities include developing initiatives related to –

● The use of new technology in training

● Increasing access to training programs for certain groups of employees
● Reducing development time
● Developing new or expanded course offerings.

d) The Strategic Training and Development Process: how does a company determine whether
training and development activities actually contribute to the business strategy? This
determination involves indentifying and collecting ……..

1. Metrics for business-level outcomes chosen to measure the overall value of training or
learning: Employee retention, employee engagement, customer service, productivity and quality

2. Training related matrix: Trainee satisfaction with the program, assessing improvements in
trainee knowledge, skills, abilities, or productivity.

It is important to recognize the difference between training program outcomes and business
matrix.

❖ Balance scorecard – means of performance measurement that provides managers with a

chance to look at the overall company performance or the performance of departments or
functions
❖ It considers four perspectives: customer, internal, innovation and learning, and financial.

Organizational characteristics that influence training:

1. Role of employees and managers:

Employees- Responsible for quality of goods and services

Managers must:

● Manage individual and performance

● Develop employees and encourage continuous learning
● Plan and allocate resources
● Coordinate activities and interdependent team
● Facilitate decision making
● Create and maintain trust
● Represent one’s work unit

2. Top management support:

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 ● The CEO is responsible for:
● Setting a clear direction for learning
● Providing encouragement, resources and commitment for strategic learning
● Governing learning and reviewing objectives
● Developing new learning programs for the company
● Teaching program or providing online resources
● Serving as role model for learning
● Promoting the company’s commitment to learning

3. Integration of business units: Training likely includes rotating employees between jobs
in different businesses

4. Global presence:
Training helps prepare employees for temporary or long-term overseas assignments

5. Business conditions: Impact the ability to find employees with necessary• skills, and
retain current employees

6. Other HRM practices:

● Human resource management (HRM) practices:
● Activities related to: Investments, Staffing, Performance management, Training,
Compensation and benefits
● Staffing strategy: Company's decisions regarding: Where to find employees, How to
select them, the desired mix of employee skills and statuses (Assignment & Supply flow)

7. Strategic value of Job and employee uniqueness:

● Uniqueness(Low/High U): Extent to which employees are rare and specialized

and not highly available
● Strategic value(Low/High V):: Employee potential to improve company
effectiveness and efficiency

Results in four types of employees:

● Knowledge-based workers( HV+ U)

● Job-based employees(HV+Low U)
● Contract employees (LV+Low U)
● Alliance/partnerships (Low V+HU)

Human resource planning includes identification, analysis, forecasting, and planning of

changes to help meet changing business conditions (Succession Planning)

8. Extent of unionization:

Joint union-management programs help employees prepare for new jobs

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 9. Staff involvement in training and development:

Effectiveness of the training program depends on the level of involvement of: Managers,
Employees, Specialized development staff

Training Needs in Different Strategies:

Strategy Emphasis How Achieved Key Issues Training Implications

Concentration ● Increased market ● Improve quality ● Skill ● Team building

share ● Improve currency ● Cross-training
● Reduced productivity ● Developme ● Specialized programs
operating costs ● Customize nt of ● Interpersonal skill tra
● Create or products or existing ● On-the-job training
maintain market services work force
niche

Internal Growth ● Market ● Add distribution ● Create ● Communication of pro

development channels new jobs ● Cultural training
● Product ● Expand global ● Create ● Conflict negotiation s
development markets new tasks ● Manager training in fe
● Innovation ● Modify existing ● Innovation and communication
● Joint ventures products ● Technical competenc
● Create new
products
● Joint ownership

External ● Horizontal ● Acquire firms ● Integration ● Determining

Growth integration for new ● Redundancy capabilities of
(Acquisition) ● Vertical integration market access ● Restructuring acquired employees
● Concentric ● Acquire firms ● Integrating training
diversification to supply or systems
buy products ● Team building
● Acquire any
firm

Disinvestment ● Retrenchment ● Reduce costs Efficiency ● Motivation

● Turnaround
● Divestiture
● Liquidation
● Reduce assets ● Goal setting
● Generate ● Stress management
revenue ● Time management
● Redefine ● Leadership training
goals ● Outplacement
assistance

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 ● Sell off all ● Job-search skills
assets training

Models of Organizing the Training Department:

❖ Centralized training - training and development programs, resources, and professionals

are primarily housed in one location and decisions about training investment, programs,
and delivery methods are made from that department.

It helps companies better integrate programs for developing leaders and managing talent with
training and learning during times of change

❖ Faculty model
❖ Look a lot like the structure of a college.

❖ Training staff are experts in the areas in which they train.

❖ The training department's plans are easily determined by staff expertise.

❖ The training function may not meet the needs of the organization.

❖ Trainers may be unaware of business problems or unwilling to adapt materials to fit a

business need.
❖ Customer model
❖ Responsible for the training needs of one division or function of the company.

❖ Training programs are developed more in line with the particular needs of a business
group.
❖ Trainers are expected to be aware of business needs and to update courses and content to
reflect them.
❖ Involves considerable time, programs may vary greatly in effectiveness, and design may
be poor.
❖ Matrix model
❖ The trainer has the responsibility of being both a training expert and a functional expert.

❖ It helps ensure that training is linked to the needs of the business.

❖ Trainer gains expertise in understanding a specific business function.

❖ Trainers will have more time demands and conflicts because they report to two managers.

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Corporate Training Universities:

Virtual Model:

Virtual training organizations operate according to three principles:

o Employees (not the company) have primary responsibility for learning

o The most effective learning takes place on the job, not in the classroom
o For training to translate into improved job performance, the manager-employee
relationship (not employee-trainer relationship) is critical

Marketing the Training Function:

Companies sell training services for the following reasons:

❖ Some businesses are so good at a particular aspect of their operation that other
companies are asking for their expertise.
❖ Other companies aim training at their own customers or dealers.

❖ In some cases, the training department sells unused seats in training programs or
e-learning courses.

Outsourcing Training:

Outsourcing – the use of an outside company that takes complete responsibility and control of
some training or development activities or that takes over all or most of a company's training
including administration, design, delivery, and development

Why companies outsource training:

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o Cost savings.
o Time savings that allow a company to focus on business strategy.
o Improvements in compliance and accuracy in training mandated to comply with
federal, state, or local rules.
o The lack of capability within the company to meet learning demands.

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