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Chapter

2
Strategic Training

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Objectives
After reading this chapter, you should be able to:

Discuss how business strategy influences the type and amount of training in a company. 2. Explain how the role of training has changed. 3. Describe how changes in work roles influence training. 4. Discuss how a companys staffing and human resource planning strategies influence training.
1.
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Objectives (continued)
5.

6.

7.

Explain the training needs created by concentration, internal growth, external growth, and disinvestment business strategies. Discuss the advantages and disadvantages of organizing the training function according to the faculty, customer, matrix, and corporate university models. Discuss the characteristics of the virtual training organization and how it can contribute to the companys business strategy.
Copyright 2002 by The McGraw-Hill Companies, Inc. All rights reserved.

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Introduction
Tires Pluss business strategy affects the time and money invested in training. Training helps employees learn job skills and helps the company retain and motivate employees. Training is strategic for:
Business goals related to human resources, and Productivity, customer service, and innovation

Employees are aware that training is essential to their future marketability.

Copyright 2002 by The McGraw-Hill Companies, Inc. All rights reserved.

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What is a Business Strategy?

A plan that integrates the companys goals, policies, and actions. The strategy influences how the company uses:
physical capital (plants, technology, and equipment) financial capital (assets and cash reserves) human capital (employees)

The business strategy helps direct the companys activities to reach specific goals.
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Decisions a Company Must Make about How to Compete to Reach Its Goals
Where to compete?
In what markets will we compete?

How to compete?
On what outcome or differentiating characteristic will we compete? Cost? Quality? Reliability? Delivery? Innovativeness?

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?
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Strategy impacts training with a strong influence on determining: The amount of training devoted to current or future job skills. The extent to which training is customized for the particular needs of an employee or developed based on the needs of a team, unit, or division. Whether training is restricted to specific groups of employees or open to all employees.
Copyright 2002 by The McGraw-Hill Companies, Inc. All rights reserved.

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Strategy impact on training (continued)

Whether training is:
planned and systematically administered, or provided only when problems occur, or spontaneously as a reaction to what competitors are doing

The importance placed on training compared to other human resource management practices such as selection and compensation.
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The Roles and Duties of Managers in Companies he That Use High-Performance Work Practices High-

Managing Alignment
Clarify team goals and company goals. Help employees manage their objectives. Scan organization environment for useful information for the team.

Encouraging Continuous Learning

Help team identify training needs. Help team become effective at on-the-job training. Create environment that encourages learning.
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The Roles and Duties of Managers in Companies That Use High-Performance Work Practices (contd) High-

Coordinating Activities
Ensure that team is meeting internal and external customer needs. Ensure that team meets its quantity and quality objectives. Help team resolve problems with other teams. Ensure uniformity in interpretation of policies and procedures.

Facilitating Decision-Making Process

Facilitate team decision making. Help team use effective decision-making processes.
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The Roles and Duties of Managers in Companies That Use High-Performance Work Practices (contd) High-

Creating and Maintaining Trust

Ensure that each team member is responsible for his or her work load and customers. Treat all team members with respect. Listen and respond honestly to team ideas.

Copyright 2002 by The McGraw-Hill Companies, Inc. All rights reserved.

Organizational Characteristics That Influence Training

Integration of Business Units

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Global Presence

Business Conditions
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The Importance of Training Compared to Other HRM Practices

The type of training and resources devoted to training are influenced by the strategy adopted for two HRM practices:
Staffing Human Resource Planning

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Staffing Strategy Influence on Training Two aspects of a companys staffing strategy influence training:
The criteria used to make promotion and assignment decisions (assignment flow) The places where the company prefers to obtain human resources to fill open positions (supply flow)

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HR Planning Influence on Training

HR planning allows the company to anticipate the movement of human resources in the company. HR plans can help identify where employees with certain types of skills are needed in the company. Training can be used to prepare employees for:
increased responsibilities in their current job, promotions, lateral moves, transfers, and downward job opportunities that are predicted by the human resource plan.
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The Broadening of Trainings Role

Focus on Teaching Skills and Knowledge

Link Training to Business Needs

Use Training to Create and Share Knowledge

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Implications of Business Strategy for Training

Strategy Concentration Emphasis
Increase market share Reduce operating costs Create market niche Market development Product development Innovation Joint ventures

How Achieved
Improve quality Improve productivity Customize products Add distribution channels Expand global markets Create new products Joint ownership

Key Issues
Skill currency Development of existing work force

Training Implications
Team building Cross-training Specialized programs Interpersonal skill training On-the-job training Support high-quality product value Cultural training Conflict negotiation skills Manager training in feedback and communication Technical competence in jobs

Internal Growth

Create new jobs Create new tasks Innovation

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Implications of Business Strategy for Training

(continued)
Strategy External Growth (Acquisition) Emphasis
Horizontal integration Vertical integration Concentric diversification Retrenchment Turnaround Divestiture Liquidation

How Achieved
Acquire firms for new market access Acquire firms to supply or buy products Acquire any firm Reduce costs Reduce assets Generate revenue Redefine goals Sell off all assets

Key Issues
Integration Redundancy Restructuring

Training Implications
Determining capabilities of acquired employees Integrating training systems Team building Motivation Goal setting Stress management Time management Leadership training Outplacement assistance Job-search skills training

Disinvestment

Efficiency

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Models of Organizing the Training Department

Faculty Model Customer Model

Matrix Model

Corporate University Model Virtual Model

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The Faculty Model

Director of Training

Safety Training

Quality Training

Technology and Computer Systems

Leadership Development

Sales Training

Training Specialty Areas

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The Customer Model

Director of Training

Information Systems

Marketing

Production and Operations

Finance

Business Functions

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The Matrix Model

Director of Training

Training Specialty Areas

Sales Training

Quality Training

Technology and Computer Systems

Safety Training

Marketing

Production and Operations

Business Functions
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The Corporate University Model

Historical Training Problems Excess Costs Poor Delivery and Focus Product Operations Development Sales and Marketing Human Resources

Leadership Development Programs

Training Advantages Dissemination of Best Practices

Inconsistent Use of Common Training Practices Best Training Practices Not Shared Training Not Integrated or Coordinated

Align Training with Business Needs Integrate Training Initiatives Effectively Utilize New Training Methods and Technology

New Employee Programs

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Virtual Training Organizations irtual

Virtual training organizations operate according to three principles:
Employees (not the company) have primary responsibility for learning The most effective learning takes place on the job, not in the classroom For training to translate into improved job performance, the manager-employee relationship (not employee-trainer relationship) is critical.
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Virtual Training Organizations (continued)

A virtual training organization is customer focused Takes more responsibility for learning and evaluating training effectiveness Provides customized training solutions based on customer needs Determines when and how to deliver training based on customer needs Leverages resources from many areas Involves line managers in direction and content
Copyright 2002 by The McGraw-Hill Companies, Inc. All rights reserved.