Effectiveness of Management Training in Saudi Arabia SMEs - Essay Example

Table of Contents: Pages Proposal 2 2. Aims and Context of Project 2 3. Contribution to Knowledge 3 Background 3 3 4. ment of Significance 4.1 Need for Change: 4.2 The role of training 4 4 5 5. Literature Review and Conceptual Framework 5.1 Management Training: 5.2.1 Evaluation of Training Programs 52.2 Senior Management Involvement 5.2.3 Scope of Senior Management Involvement 5.2.4 Theories of Transfer of Learning 5.3 Gap in the Literature 5.4 Research Questions 6 6 7 10 12 12 14 14 6. Approach And Methodology 15 7. Budget 16 8. Timeline 17 9. Reference List 18 1. Proposed Title: The influence of senior management involvement on the effectiveness of management training in selected Saudi Arabia (KSA) SMEs. 2. Aims and Context of Project In today’s business realm it is very important for organizations to invest in training of employees at all level. The advantages of this training are long lasting and they are not restricted to cost effectiveness only. Managers should keep in mind the significance of training because it is beneficial for the whole organization. It is not just a process that helps saves some extra bucks and the senior management should realize this fact. The main aim of this research is to study the effectiveness of the transfer of training to the workplace. For the purpose of this study the effectiveness of the transfer of training within organization is defined by factors such as consensus between training participants and their senior management, better communication, team work, high spirit, move involvement of their work and faster decision making and problem solving. These factors are used as indicators of the effectiveness of the transfer of learning, because they are the ultimate aims of the management. It is important to note however that this research is based on the effectiveness of training in the workplace and effectiveness is not measured with a cost effective approach. Factors given above are used to define the effectiveness of training. From a cost effectiveness point of view, a counter argument will arise: will the senior management attending training program lead to reduced efficiency and effectiveness in their job, as they have less time to devote to their other roles. Some may suggest analyzing the cost-and-benefit of the action taken by the senior management. However this research is to study the effectiveness of training programs with or without the senior management participation. The reasons for the researcher to leave out cost-and-benefit factor are: firstly, the aim of the research is to study the human behavior after attending training; secondly, the researcher presumes the cost incurred by the whole group members of an organization is probably larger than the cost incurred by the senior management. Further complementary research could be conducted into a full cost-benefit analysis. This research concerns the relationship between the senior management and the transfer of management training effectiveness to the workplace of selected small and medium sized enterprises (SMEs) in Saudi Arabia (KSA). In this country, “SMEs” mean manufacturing companies provide manufacturing related services with annual sales revenue not greater than Saudi Arabian Riyal (SAR) 25 million and with full-time employees not exceeding 150. Saudi Arabian SMEs consist of more than 55% of the total national industry. Therefore, more attention is needed to study this group. Management training, in this research, concerns the learning of management skills to plan, organize, staff, direct and controls in order to achieve the goals set by the management. Although managers need to utilize human, financial, material and information resources, they mainly have to depend on their people to accomplish the tasks. Therefore, this research will focus on the management training regarding people, and not on technical training. The phrase ‘senior management’ and ‘top management’ will be used in parallel and interchangeably in this study. Top management or senior management in general, consists of the organization’s highest-ranking personnel such as the president or chief executive officer, and that person’s immediate subordinates – vice president or general manager. They are responsible for the overall management of the organization. Senior management establishes organizational objectives, goals and operating policies. It involves broad relations with the external world. Middle management includes personnel below the rank of vice president or general manager but above the supervisory level. The job titles usually are ‘departmental manager’, ‘regional manager’ and ‘accountant’. Middle managers are responsible to implement senior management’s objectives and policies. So, it seems conducting this research is very rationale from the point of view of the effectiveness of training programs with or without the senior management. 3. Contribution to Knowledge 3.1 Background: It is noted that mankind took two thousand years to move from the ‘stone age’ to the ‘agricultural age’, and a mere two hundred years to move thereon to the industrial age. Enderwick (2003) describes the scenario best when he said that we are undergoing the most significant change ever experienced in human history. Today, we can notice distinct changes to our world in the following aspects: Technology – The info-media industries grow at neck-breaking pace, with computers and telecommunication gadgets becoming necessities to the modern life. The new technologies generally “increase efficiency, productivity, speed of production and delivery, and along with those, consumer power” (Totenbaum, 1998). Market – Local products and services are increasingly being marketed globally, leading to intense competition everywhere (Kogut, 1998). Politics – International incidents such as the September 11 attack on the United States are likely to bring significant changes to the global business environment, for instance stricter regulatory frameworks. As suggested by Enderwick (2003) nations might now have to choose between liberty and security. Psychology – Using Maslow’s hierarchy of needs as a framework, changes that amplify the needs for basic necessities, such as food and safety, should automatically diminish the propensity for higher needs, such as achieving self-actualization (Tomkins, 2003). This is the direction the world I moving in. 4. Statement of Significance 4.1 Need for Change: The changes mentioned above contribute to the complex nature of our current environment. The pace at which change takes place is dramatically increased, to the extent that this era is characterized by ‘uncertainty’. Furthermore, there are observed ‘trends’ which display a high degree of certainty within generic uncertainties (Enderwick, 2003) and it is believed that the core to that certainty is change itself. How will change affect the survival of organizations? Pedler et al (1991) cited in Boyle (2002), categories the life of organizations in five stages: Beginning as an infant company, then going to a pioneer company, developing into a rational company, maintaining as an established company and at last becoming a wilderness company. Boyle (2002), warns that any firm that reaches the fifth stage, ‘must either learn to transform itself or die’, because ‘yesterday’s knowledge and skills are vulnerable to obsolescence and future success requires flexibility, responsiveness and new capabilities. The above mentioned organizational life span has a meaning similar to a Chinese old saying: ‘The wealth will not pass beyond three generations’. This means that the first generation of the family members founded the business; the second generation maintained the business and the third generation ruined it. The reason for his unfortunate consequence is successors from the third generation have been complacent about the success of the past and had no intention to adapt to the new environment. Therefore, the family business is ruined. During the fifth stage of the organization’s life span, no transformation occurs, and a result the firm fads away, possessing no clear competitive advantage. The research that has been conducted on the subject of transfer of training has mostly dealt with the cost effective element of training. Some research is also done as to how training should be made ubiquitous in the organization but little focus is on the effectiveness of training. There are some studies available on the subject but they are mostly based on large corporations. So the work done on the SME’s is very limited. This is a gap this research will try to fill. This research will inform about the influence of senior management on effective training in the organization. And the organizations that are concerned are small and medium enterprises. The study will give us important insight on the merits of management training in the organization. 4.2 The role of training: In view of the above background and the need to change to be competitive, many believe that education and training are keys for individual success, company competitiveness and the country’s prosperity (Brawn and Ponser, 2001). Garatt (1987), a London based international management consultant, stressed that ‘Learning is the core of organizational survival’. The success of the organization depends largely on all its members who are willing to learn. In other words only those who can learn and upgrade themselves over time through education and training are able to reap the benefits of the organization’s success. There is a fair bit of controversy and divergence as to the exact definition and nature of training and education. It is generally agreed that training is more job-orientated while education is more person-orientated, but that the common factor linking training and education is developing individual talent (CLMS 1995). Both activities aim to enhance the process of learning with a common concern for the development of human potential. The role of training in this research mainly concerned with training, inculcating job-specific skills, knowledge and attitudes to the members of the commercial organizations. The importance of the role of training in helping organizations to change to be more competitive can be substantiated by the words of a professor of management, Prof. Ikujoro Nonaka (1991). He wrote, “In an economy where the only certainty is uncertainty, the one sure source of lasting competitive advantage is knowledge”. Therefore, inevitably, individuals must be continuously learning and relearning to gain knowledge. The ability of organizations to unleash the potentialities of their people during education and training is cited as a key factor to success. 5. Literature Review and Conceptual Framework 5.1 Management Training: According to Donnelly, Gibson and Ivancevich (1987), the existing literature regarding perspectives on management can be framed into three approaches or schools of management. Classical approach: emphasizes managing work and organizations. This approach seeks to understand the nature of work and the work environment and how to coordinate them through planning, organizing and controlling. Behavioral approach: focuses primarily on managing people. It emphasizes that the human element in work organization will affect the workers’ performances. Management science approach: concerns with managing production and operations. This approach focuses on applications to production and operational functioning, such as automation, quality control, decision making and decision support system. The above-mentioned authors argue that, the ideas, concepts and techniques of these approaches contribute positively to the total body of knowledge that comprises modern practice. For this research, the definition of management is confined to the behavioral approach, that is, it focuses mainly on managing people and believes that human behavior in organizations will affect workforce performance. With this classification of management, we can assume that management training is about introducing techniques and guidelines for managing groups and organizations, in order to improve employee an organizational performance. In the field of study, the term ‘management’ is concerned with the process of coordinating resources such as machines, money, materials and people, to achieve predetermined goals. Therefore, for the purpose of this study, management training will be considered as ‘soft’ training, which is different from ‘hard’ training that aims to acquire specific technical skills. In this sense, management training defined in this research is within the field of human resource development (HRD) rather than ‘pure’ training itself. As ‘training’ itself is defined as to ‘learn specific behaviors and actions, demonstrate techniques and processes’, while ‘development’ is to ‘understand information concepts, context; develop judgment, expand capacities for assignments’ (Mathis and Jackson, 1996). The aim of management training is to develop human resources in an organization to expend the overall level of abilities in an organization. 5.2.1 Evaluation of Training Programs: Burden & Proctor (2000) hold that the reason of training is to modify people’s behavior; therefore the training effectiveness should focus on measuring changes. But they notice that this fact is not well recognized, as the training needs are usually identified and measured in terms of skill requirements and attention is paid to a certain level of achievement. This indicates that some people measure training by improvement whereas others measure it by terminal level of performance. Burden & Proctor assume that learning will lead to behavioral change taking place. But, according to Kirkpatrick (1994), behavioral change is not automatically taking place after training. Change can only appear at the third level of his four-level measuring method, after certain conditions have been fulfilled. Kirkpatrick’s four level evaluation method for training programs, measuring behavioral change and organizational change are at levels three and four respectively. Level one concern the reaction of participants to the training program and level two evaluates the learning result of the program. The evaluation at level three and level four, which refers to behavioral change and organizational performance, are the areas often omitted. The results of the evaluation at level four may be seen as the ultimate aim for an organization in conducting training programs from the management perspective. It can be argued that through training programs, people will learn and change their behavior to the benefit of the organization. As argued by Bramley (1999), most organizations evaluate training effectiveness at the reaction level, some measure learning in technical skills, but few try to assess changes in behavior of trainees or effectiveness of organization. One can understand that measuring the reaction of participants and their learning outcome can be easily done on the spot at the end of the training. But, behavior is more difficult to measure than reaction and learning. Since this research focuses on behavioral change and organizational performance, so concentration will be on the evaluation of behavior change at level three and organization results / performance at level four. For behavioral change at level three to happen in an organization, four conditions should appear. According to Kirkpatrick (1994), they are: The person must have a desire to change, the person must know what to do and how to do it, the person must work in the right climate and the person must be rewarded for changing. Again, this research is to study how senior management behavior will influence the behavior of their subordinates, the first two conditions concerning the subordinates and trainers themselves being excluded. Attention will be paid to the third condition- work in the right climate; and the fourth condition- be rewarded for change. This is because these two conditions are controlled by the senior management. Because the objective of this research is to study the influence of senior management involvement in management training and the ensuing impact on the effectiveness of transfer to the workplace, there is a need to consider what constitutes a successful transfer. Although literature from evaluation studies has not included the use of these criteria, this research defines a successful transfer in terms of organizational effectiveness as group consensus, better communication, team work, higher working spirit, participation and involvement, fast decision making and problem solving. These elements have been selected as indicators of organizational effectiveness from the following literature: Consensus: This means mutual agreement about the view or the way of doing. Consensus will provide a foundation for promoting shared vision among the workforce. Shared vision is one of the most striking characteristics in high performance teams (Senge, 1994). Communication: To be a group, people must be able to interact with each other. Only in this way, can their common interest be developed, and the workforce will form group cohesion to pursue the group objectives (Luthans, 1989). He also added effective communication is considered a basic prerequisite to achieve organizational goals. Teamwork: A team is a group of people who communicate regularly and work together to fulfill a common goal. The success of Japanese business revealed by Katzenstein (1992) is the result of team and teamwork. Working spirit: Working spirit here has a similar meaning to that of morale, that is the attitude or feeling the workforce has about the organisation, the work and their job performance. According to Plunkett & Attner (1994), successful organizations have excellent working spirit. Participation and Involvement: This means that organization’s members are willing to put themselves into a group working together to improve business results through cooperation, problem solving and decision making. Research shows that in organizations with workforce participation and involvement in their work life, ‘the employees are happier; costs are down; and quality, productivity, and profits are up’ (Boyer, 1987). Organizational performance is directly related to training of employees and this will be the focus of attention of the research. Proper training improves coordination between employees and in turn it improves the quality of work. The relationship between training of employees and organizational performance is very strong. Studies have proven that the relationship between training of employees and organizational performance in SME’s is very strong (Huang 2001). There has been evidence that performance of employees is improved with training programs and this causes them to better perform their functions. Senior management also has a key role to play in this regard. There is also evidence present that HR practices in the gulf countries are not very good and they have to improve the quality of training they are giving to their employees (Forstenlechner 2009). This study also included Saudi Arab in its sample and it showed that Gulf countries and KSA is not doing well in their HR practices. Need for more training was identified. 5.2.2 Senior Management Involvement: There is a great deal of literature pointing to the senior management involvement as being able to produce positive results from the training (Porter and Parker 1995; Kotter 1995; Tao and Koo 1999). There are many areas where it can be shown that with senior management involvement, organizations are able to achieve positive results. A field experiment showed that the subordinates’ organizational commitment was significantly enhanced and sales were increased when managers participated in their training program (Kelloway, Barling and Helleur, 2000). In another study, many owner managers of SMEs attended training with their staff and were learning alongside them and this encouraged more employees to take part in training. Participation in training also became a key factor in improving further business, as the owners were able to discuss issues directly with employees (Johnston and Loader, 2003). Researchers also found that firms with high senior management commitment produced high quality products despite variations in individual constructs (Ahire and O’shaughnessy, 1998). They claimed that ‘commitment of top management has been cited as one of the most important factors impacting the success potential of TQM in a firm’. With commitment to change from upper management, the behavioral change of members in an organization will be more successful, because the higher levels are acting as leaders, and a model set by the leaders will influence the behavior of their subordinates (Senge, 1990). The above-mentioned research indicates that the involvement of senior management should be shown through in-depth participation, such as funding, planning and monitoring. Non-participant action such as ‘belief’, ‘discussion’ and ‘setting priorities’ have less influence on the transfer of the training effectiveness. This research also concludes that the more senior management is involved and participated physically in the training program, the more effective the transfer of learning will be, and that this should go beyond mere mental beliefs or verbal support. Boice and Kleiner (1997) reported that to create a motivated and committed workforce, it is essential to design effective performance appraisal systems. To be effective, they need the support of senior management to show their commitment and to translate organizational goals to match personal objectives. They explained that ‘a major aspect of developing an effective performance system is training for those individual as raters’. This training should first equip the senior management knowledge to practice effective people management. They argue that ‘performance appraisal is only a part of this overall process and it is important that managers see it within its wider context’. Huang (2001) in his research about the relation between training practices and organizational performance in SME showed that firms with management support for training are mostly successful at maximizing the value of their training programs. The above overview of literature indicates that in any area of an organization is it TQM, ISO, end-user training or even appraisal systems- it is important to have senior management commitment in order to achieve effective performance. It may be surmised that without senior management involvement with various aspects of training, few projects can excel or even survive. Some studies have pointed that the role of senior management is very important in organizations because middle level managers look up to the senior management for guidance and in the absent of it, they are not clear about their role in the organization (Rosenhead 2010). The vagueness that middle level managers feel about their role can be removed by the involvement of senior management. If middle level managers are not aware of their roles then they will not be able to guide employees working under them and confusion will hinder in qualitative work. This is the reason why training is very important and senior management should also take interest in training programs. 5.2.3 Scope of Senior Management Involvement: The scope of involvement by senior management varies among different organizations. Involvement tends to depend mostly in the beliefs and views of the top management staff themselves. According to Kirkpatrick (1994), involvement of the superior in the development of the program was important in helping to identify the needs of subordinates. Such involvement helps to design training programs relevant to the needs of the subordinates. Hamzah and Zairi (1996) investigated top level involvement in terms of providing training activities to equip employees with the knowledge and know-how, and funding to allocate enough resources to support the improvement activities. To some researchers, senior management involvement means the empowerment to affect changes, to create organizational culture for supporting the changes, and to institute the appropriate reward system or increase communication throughout the organization (Gupta and Sharma, 1996; Little and Gorin, 1995). 5.2.4 Theories of Transfer of Learning: Training effectiveness in classroom is different from training effectiveness of what people learned in training to their workplace. The transfer of training effectiveness to the workplace means how much or how well the new knowledge, skills and attitudes learned in the training session are actually practiced on the job (King, King and Rothwell, 2001). This process is also regarded as transfer of learning. The transfer of learning is important, because unless the trainees can apply what they learned in the training to their job, it is a waste of time, money and human resource to design and run training programs (King, King and Rothwell, 2001). It has been argued, to ensure the successful transfer of what the trainees learned in the training program, that organization should not neglect the psychological theory of learning (Latham & Crandall, 1991). If the learning theory is ignored by the organization, the knowledge learned will likely not be successfully transferred to the workplace. There appears to be two main groups of theories in learning history. One group the behavior theories is based on the similarity of the information between the early learning stage and the later transfer stage. The other group social learning theories, believes the strategies of learning and abilities are influenced by cognitive thought and environment. Bandura’s social learning theory (or social cognitive theory), cited by Latham and Crandall (1991), ‘Posits reciprocal determinism among the person’s cognitions, the environment, and overt behavior’. In other words, the individual’s behavior will affect and be affected by both cognitive thought and environmental contingencies. Environment can be deemed as training place, workplace and the organization concerned. Putting it simply, it means individual’s thinking the training delivery competencies, the workplace and organizational factors will influence his or her behavior vice versa. The three variables, a person’s cognition, the environment and overt behavior, and the interactions among them, will determine if the training program works or fails to work. Latham and Crandall (1991) stress that a critical social factor to training effectiveness is senior management support. The influence of the senior management can have a ‘pivotal effect’ to the success or failure of a training program. To encourage the trainees to transfer what they learned to their job, the senior management needs to reinforce the application of what have newly learned in the training. To achieve this aim, the senior management should know the content of the training, and the reasons why to do it. Transfer of training knowledge is very important and the extent to which this transfer is conducted in the organization is linked with the effectiveness of the workplace. It is not a once in a year deal, rather it should be carried out regularly. The workplaces today are getting complex and therefore regular training is required with the involvement of senior management. 5.3 Gap in the Literature: This research fills a gap in the literature which mainly outlines the involvement of senior management in program planning, program funding, mental support, follow-up support and rewards. The effective transfer of training to the workplace depends largely on the senior management’s attendance at the training program together with their subordinates. The available information on the subject is not enough and this is an area where more research is required. Senior management is not always thrilled with the idea of training and this research will try to identify evidence as to why senior management should give specific attention to training. SME are a good place to start because senior management in SME’s is usually not very cooperative with the employees and this is something which hampers the organization in achieving their goals. 5.4 Hypotheses: There are few senior people who are willing to attend training, especially those from SMEs. There is a need to do this research to discover the factors that prevent senior management from attending training, so that remedial action can be identified. Training today is costly and time consuming. There is also a need to conduct research in this aspect to arouse the awareness of the senior decision makers. Consequently, this research may benefit both organizations and workforce. The importance of training of employees and the significance of participation of senior management in the process has been identified in the literature review so this research will be very helpful in guiding senior management upon their role in training employees. For the purpose of this study, three hypotheses are as follows: In Saudi Arabia SMEs: Hypothesis 1: Senior management attending management training together with subordinates influence the transfer of learning and thus improve the organisation performance. Hypothesis 2: The barriers that prevent senior management from attending training together with their subordinates are significant. Hypothesis 3: These barriers can be overcome by strong coordination between senior management and their subordinates. It is strongly believed that testing these three hypotheses will provide valuable insight on the topic. 6. Approach and Methodology This research is an exploratory study. So, quantitative methods will be used here. This approach will be used to collect nominal data to examine and reflect on perception in order to understand the social and human activities. This approach will be used to gather more in-depth information to understand the phenomenon. The aim of quantitative research is to get in-depth information; therefore, it uses small samples, even with a sample of one. But, it needs to examine the phenomenon over a period of time (Hussey & Hyssey, 1997). Six small and medium sized enterprises in KSA will be invited to participate in this research on a voluntary basis. These enterprises are located in different parts of KSA. After deciding the list of the potential participating organizations the senior management will be contacted to inform them about this research. These organizations will be the sample of our research. This sample is collected randomly and it is dependent on the organizations whether to participate or not so there is no research bias involved in the process. This study will collect data from three groups of people: the senior management (those who have the power to accept or refuse proposals from the subordinate trainees), the trainees and the trainers. The reasons to include three groups of people who are related to the effectiveness of training are to ensure that ‘the sampling frame is unbiased, current and accurate’. These three groups of people will be randomly selected. They will also be included on the subject of their availability. This will make all the process random and unbiased. In this research the questionnaire methods will be used to collect data. The senior management and employee trainees will be given questionnaire. The responses will be collected either in the organization’s guest room or other places outside the organization. This will help to gather more in-depth information for the research questions. The questions will be yes or no questions and they will be close ended questions. This will be done in order gather specific responses. Also no names will be asked in the questionnaire and only group name will be written. This will be done in order to encourage the participants to give honest responses. The knowledge that will be gathered is to be very practical in nature. For this reason practical questions will be questioned and no idealistic questions will be asked. Also the information collected will be screened in order to provide practical suggestions to the SME’s of Saudi Arabia. In the above briefly it has been discussed how this research will be conducted. 7. Budget $ 2800 for access fees to secondary date, printing and attendance at local and international conferences. 8. Timeline 2010 2011 2011 2012 Qtr3 Qtr4 Qtr1 Qtr2 Qtr3 Qtr4 Qtr1 Qtr2 Candidature proposal Ethics Approval Literature Review Phase 1 Phase 2 Phase 3 Thesis Write up Submission 9. 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