Business Essays - Development Training Executive

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Development Training Executive

2.3 Literature Review

The purpose of this literature review is to help establish the emerging relevance of professional development training courses and the increased demand for executive education and short, professional development courses as opposed to traditional MBAs. It also touches upon the changing role of business schools in the provision of management training.

As stated by Ann Mooney, “the proliferation of business curricula, journals, and academic and professional associations is evidence of a dramatic growth in business education.”

According to James Bolt the emergence of executive education’s popularity began in the mid 80s. It was believed that executive education was “a nice, fun to do function aimed at primarily preparing individual executives for some vague, future responsibilities.” He adds that the name Executive Education was in itself misleading as its participants were usually middle to upper-level managers and not those in the executive level at all. After the 1990s and now, many CEOs see executive education training as being necessary for beefing up their companies’ competitive strategies and improving overall productivity and quality of service and products offered. Additionally, according to Bolt, executive education can also boost their corporate culture.

To ensure that the executive education supports organisational strategic objectives, many companies now feel the need to develop their own long term strategies for executive education. Most often the strategies embrace management’s beliefs about professional development training and gives detailed plans for such training. Bolt says, “Strategic plans for executive education spell out who gets trained, on what subjects, why and when, how an organisation will reinforce its culture, values and key practices and how it will periodically identify its priorities for executive development.”

Nowadays, companies are starting to move away from MBA type programmes and are leaning more towards high impact, customised programmes which are tailor made for them. According to Bolt, the hallmarks of a cutting edge executive education programme are:

  • Education on the Job – programmes which integrate classroom training with practical on-the-job development in shorter, more frequent bursts of training.
  • Talking Heads Shut Up – combining experiential learning with the traditional case studies and lectures with a strong emphasis on learning by doing.
  • Leaders leading the way – training that begins with managers and CEOs participating in the programmes followed by lower level executives.
  • Broadening Scope – executive education is now seeking to integrate leadership skills with personal effectiveness and critical business decision making skills.
  • Feedback is encouraged – executives are now more willing to receive feedback on their performance than they were in years past. They are also interested in receiving employee comments on how well they live the values of the organisation and the perceived quality of their leadership as well as receiving coaching on an ongoing basis. By using this feedback, executives create plans for improving their less than satisfactory areas.

All of the above information cited in previous pages was specific to the United States of America. Now attention will be paid to the United Kingdom, where the attitude towards management training is somewhat different to that of the USA – this attitude however has been changing in recent years. According to John Hayes, as recently as the 1960s, many Britons held the view that “Lifelong learning is a well accepted part of the American way of life and many companies play a high priority on management development training.” Later studies showed that management training undertaken by British companies found that over one half of all companies undertook almost no formal training. Hayes added that this statistic held true even though the “training company” requirement meant that only one manager in the company needed to take a short internal or external course.

It was (and to some extent still is) a general sentiment that in the UK, according to Mangham and Silver spending money on training management and staff was a bad investment. They clarified that people who held this view were not “antagonistic towards training but simply feel that the opportunity cost is too high.” A second sentiment expresses the feeling that management cannot be taught anything in a business school, the proponents of this school of thought believe that everything management needs to know ought to be and can be learned on the job – that managers are born and not produced via education and they have an innate authority.

However, this view began to change in the UK by the 1970s as business schools, such as the London and Manchester Business Schools were developed and there was a rapid growth in the provision of management training. In an attempt to foster more support for management training, the Council for Management Education and Development (now the National Forum of Management Education and Development) launched the Management Charter Initiative in November 1987, with the following three aims:

“(1) Increasing the commitment of employers to the promotion and development of high standards of modern management practice and business skills;

  • Developing a widely recognised system of qualifications; and
  • Raising the status of management as a profession.”

These changes have translated into a changing attitude towards management training in the UK and an increased investment in such training. The belief is swinging towards one that supports the role management training can play in improving management practice.

The main conclusion drawn by Hayes is that business schools now have a new and very important role to play as this field of management education and development takes off in the UK. Whether or not business schools can or will fill this role depends upon how well they market their programmes in the industry and face the ever growing challenges of the management field.

A further factor that is outside the control of the business school is that of the employer realizing that management is not just skill or education in isolation, but rather a combination of the two. The challenge here is for business schools to demonstrate to their markets that they can bridge the gap between these two management qualities through their training programmes.

Thus, the traditional era of corporate training and education seems to be drawing to a close. The new approach that is being demanded globally calls for leading organisations to compete effectively with world-class firms and the way to achieve this is through corporate training and education.

According to Fulmer and Graham, the traditional era of corporate training was characterized by several factors:

Ad hoc development – training and education programmes were developed on a course by course basis dependent on business needs, which meant that the resulting training programmes were often fragmented throughout the business and its various departments; confusion – on the difference between training and education; low regard for the need for training senior management since there was a belief that management got their positions because of their already existing knowledge.

In their article, Fulmer and Graham indicate that organisations have been seeking answers to why American dominance in the world market has been challenged by other global players by looking at Japanese business practices and at other American companies who have managed to remain competitive on a global scale. One recurring factor kept emerging however, the need for learning. A study from Royal Dutch Shell suggested that in the future the only sustainable competitive advantage may be if a company could learn quicker than competitors.

A paper published by the University of Michigan revealed that companies which gave their management at least one week of professional training per year recorded higher profits than the companies which did not. Additionally, Fulmer conducted another research study which yielded the findings that there was a positive correlation between a firm’s position within its particular industry and its commitment to provide training on a yearly basis for employees.

And so the trend has shifted as organisations recognize that the way they handle educating their employees can also affect their corporate reputation.

According to Fulmer, a distinction needs to be made between “training” and “education”:

Training develops specific skills which are measurable, for example an employee learns to use a cash register and ring up customer sales, whereas education has no specifically measurable outcome.

A major development to address the broad understanding of behaviour needed by managers is the emergence of university-based executive education programmes conducted on an “in company” basis – this means that the entire training session or class is occupied by persons from the same company.

The above mentioned findings feed directly into the changing role of the training administrator or, in the case of the Centre for Training & Development (CTD) of the Lok Jack GSB, the programme coordinator.

Jan White illuminates the sentiment that today the term “training administrator” is probably grossly inaccurate – the term is used, according to her, to describe the people who “source, negotiate, organize and trouble-shoot the learning courses that many workers take for granted.” Rather, she suggests that they should now be referred to as “learning advisors, learning and development coordinators, training liaison officers or learning support administrators.”

According to White, organisations now have corporate learning centres and learning academies replacing the old training departments, and which take participants on a “learning journey” or a “learning event” as opposed to a “training course”. Today, training is a thriving business for many business schools – the industry, according to research, is growing. With this growth, comes the shift in a programme coordinator’s responsibilities.

”In the old days” says White, “training administrators were office assistants who added the role onto their mountain of jobs. Organizing training was considered unimportant, mundane and matter-of-fact.” Now, she adds, there is a constant, ever-challenging search for training materials, venues and value for money added to any training programme. “Nothing remains of the mousy office assistant and plenty to show for the emerging, polished and highly competent professional.” While White believes that the core responsibilities of a coordinator haven’t changed – make sure one gets the right people for the right courses at the right time – the profession now demands a deeper understanding of methods of training and delivery and be able to discern participants’ preference for each. Additionally knowledge of each training course is imperative.

Another emerging trend from training is the growing need for courses that are accredited. Studies have shown that participants are more interested in the courses that enhance their professional qualifications and offer certificates upon completion. At last count, according to research, there were more than 300 undergraduate and graduate programmes in the training and development field. Because of the proliferation of programmes, there is often a lack of standardization of the programmes and concentrate on different areas of specialization.

As defined by Rothwell and Wang, accreditation is a “process of reviewing an organisation or academic institution to ensure it meets previously defined standards of quality.”

The importance of accreditation is now underscored by the prominence of the training and development field. Furthermore, accreditation indicates that the facility uses trained and qualified faculty, utilises up to date content and operates according to prescribed academic principles, which dictate adherence to standards of excellence. Also, accredited programmes provide assurance to participants that their investment of time and money will be worth it since the quality of the programme has already been proven and can offer the business school additional marketing advantage and ability to source qualified, specialized faculty. The end result being that short courses can be on par with the quality and respect given only to MBA qualifications.

An interesting phenomenon being faced by business schools now is the reduction in the number of students doing MBAs and the increase in the numbers of participants for short courses. What is emerging is a movement away from hiring new MBA graduates and a move towards enhancing managers who already have experience with the organisation says an article in The Economist. To fill this need, many business schools have to turn their attention to short executive education courses. Among the renowned schools offering such courses are Harvard Business School, Dartmouth and Wharton to name a few. The length of these offerings range from two days to 11 weeks.

The statistics show that in Europe, income from executive education has surpassed the revenue from MBAs, bringing in over 50% of the schools’ budgets over the past few years. In the USA, several top business schools have seen their executive education revenues double in recent years. The overall sentiment is that this market for executive education has a long way to go before it reaches the saturation level that the MBA market seems to have reached.

Recent findings has shown that many international business schools have realized that companies are reluctant to send their employees to open enrolment (programmes where any member of the public is allowed to enroll) programmes because they do not see the value, but would rather have an “in company” training programme, where courses are designed for their needs. Companies believe they can reap more rewards for their investment here since the programmes are designed for them and include only their employees – companies have often complained about the case studies/lecture scenarios being used in short courses, which seem irrelevant to their current business situation.

Business schools now have to grapple with this new reality – a reality that also means their profit margins may be reduced. It is well known that the profits made from an open enrolment programme are considerably higher than those made for an in-company programme that required extensive customization.

For now, business schools relish the fact that most companies do not have the resources needed to develop their own internal training courses. However, a reality is that many large organisations are forming training academies for their own internal training purposes – Nokia, Motorola University, GM and AT&T, for example, have all started using external facilitators from well known universities to teach their internal training programmes.

In conclusion, it appears that there have been some considerable shifts in the perception of professional training programmes over the past 50 years or so. What was once thought of as a waste of time and money is now being seen as an almost indispensible tool towards securing competitive advantage, continuing business success and ensuring management efficiency. Furthermore, business schools themselves have had to adjust what they believed their original purpose was – providing academic training mostly towards MBA attainment – to what it needs to be to generate profits in an industry that is now seeking more value for money and wants more relevance for its training programmes, specifically for “in company” training programmes. This shift in preference over traditional “open enrolment” programmes has led business schools to rethink their strategies, given the reduced profits earned by these “in company” programmes.