Issues Related To Global Training And Development Management Essay
For a multinational company that wishes to successfully implement a set of training and development initiatives, it will be imperative to establish coordination and cohesion between subsidiaries and headquarters. In doing so to, this will ensure people are trained and developed to their full potential and maximum effectiveness in line with organisational strategies and objectives. This essay aims to highlight the various issues concerning global training and development, with particular attention to the United Kingdom (Headquarters), People’s Republic of China and the United States of America (Subsidiaries). Having highlighted the issues, the essay will then use relevant framework, theories and case studies to establish whether or not it is feasible for a multinational to implement a common set of training and development initiates across its global subsidiaries.
Issues Related to Global Training and Development
There are of course many issues related to global training and development that need to be addressed, some of which include the design, development and implementation of such initiatives (Briscoe, 2009). These are important issues for the UK multinational to consider, as they will determine the acceptance and effectiveness of the training and development schemes. In order to maximise the probability of success, Briscoe, 2009 suggests that translating and adapting to the local cultural practices, as well as compliance with local laws affecting training will greatly improve the feasibility of implementing training and development initiatives across a global platform. In order to do this, it will be important to gain insight into the training and development practices within the PRC and the USA.
Training and Development in the People’s Republic of China
Over the past two decades, the training and development of managers has become an increasingly important issue for the government to promote its economic objectives (Nyaw, 1995). Chinese managers are being trained in modern management techniques, as well as appropriate industrial or commercial skills, by the companies themselves as well as by universities, professional associations, and foreign consulting firms. Companies are working with the government to develop school criteria that will produce skilled workers (Drost et. al., 2002). In addition, many multinationals, such as ABB, Ericsson, Procter & Gamble, Motorola, and Siemens, have established state-of-the-art, corporate-style, campus training centers (Minehan, 1996). The establishment of corporate training centers sends a strong message to employees and prospective recruits that these employers are investing in China for the long term.
Training and Development in the United States of America
The American Society of Training and Development (ASTD) reported that most organizations train about 74% of their employees (Drost et al., 2002). Moreover, a recent review of training practices in U.S. firms (Salas et al., 1999), Zenger (1996) argued that training has become peripheral to organizations rather than integrated into organizations. Similarly, recent data from ASTD indicated that the size of many training departments is shrinking while the use of training sources outside the organization is increasing. As training moves outside of the organization, training consultants may develop programs that might not fit the organization’s training needs (Salas et al., 1999).
Implications for the UK Multinational
Having gained insight and perspective into the current training and development practices of the two countries concerned, it is now important to assess the implications for the UK based multinational. With regard to China, it is encouraging to learn that the government is promoting training and development not only at a local level, but also among international organizations. This will greatly increase the UK multinational’s probability for success when implementing these initiatives. Given that China has a different culture, customs and language, it will be vital that the training is not generic and coincides with the learning styles, education levels and local laws in order to achieve the desired outcome.
The increase of training and development outsourcing in the US presents some problems for the UK multinational. As the training initiatives being implemented may be job-specific and highly technically orientated, the idea of relying on a third party to delivering the training could cause employees to perceive that it is neither valued nor effective, which drastically reduces the probability for success when implementing these initiatives. It will therefore be necessary for the UK multinational to address this issue with caution, by ensuring that the training is delivered by only the most appropriate and suitable partner. In light of these implications it is now necessary to determine whether a localized or standardized approach to training and development is more feasible.
Localized Approach to Global Training & Development
After understanding how training and development features in the two subsidiaries, it becomes apparent that there are few similarities. Therefore a localized approach would seem much more appropriate rather than to just apply successful training programs from headquarters and assume they will work elsewhere. This neglects the need to tailor training to the subsidiary environment where learning styles, education levels and language barrier may affect the transfer of learning. By successfully recognizing the requirements of each subsidiary the training will become much more relevant and allow the receiving participants to apply what they learn in the training programs into their day-to-day activities.
Hofstede’s Framework for Assessing Culture
By utilizing Hofstede’s cultural dimensions (please refer to Figure 1.0 & 2.0) to contrast and compare the differences between the UK, China and America, it will become apparent that there are profound differences that need to be addressed otherwise the multinational risks reducing the acceptance and effectiveness of the training interventions.
China’s high Power Distance Index (PDI) indicates that subordinates are much more likely to accept and except that power is distributed unequally. In the realm of training and development this means individuals are influenced by formal authority figures and are in general optimistic about people’s capacity for leadership and initiative (Hofstede, 1991). This implies that in order for the training to be effective and engaging, the candidate(s) responsible for delivering the training should come from a higher authority and position in the company hierarchy. Failure to acknowledge this may result in the training exercises not being taken seriously. This differs greatly from the UK and USA where PDI is low, suggesting that subordinates from these two countries are less likely to discriminate a person based on their background.
China is also a highly collectivist society, where people belong ‘in groups’ that take care of them in exchange for loyalty (Hofstede, 1991), the UK by comparison is a very individually driven society much like the American’s. Where training and development is concerned, this may present problems for the UK multinational. For failure to recognize that people in China are generally more inclined to accept and embrace new training methods if taught in a group rather than individually will determine the successfulness of these new initiatives.
Long-term Orientation (LTO) is the third and final dimension that highlights the significant differences between the two cultures. This dimension has much to do with the teaching of Confucius (Ã¥Ââ€Ã¥ÂÂ), a deep rooted philosophy in Chinese tradition. The high score for China suggests that the people look at the bigger picture, whereas their western colleagues (from US and UK) focus more on the short-term gains. With regard to training and development, the UK multinational must ensure that the initiatives resonate with the Chinese people. It will be important to show how learning new skills and expertise will benefit them in the long term and enable them to develop skills that might help them in their future role within the company.
Standardized Approach to Global Training & Development
While there are many reasons to localize training, Briscoe, 2009 outlines that MNEs also must integrate their training and development activities, not only to achieve economies of scale and scope, but to ensure that the same training and development is available for all of their worldwide employees. The Aditya Birla Group is a US$28 billion corporation. It employs 100,000 people belonging to 25 nationalities and over 50% of its revenues were attributed to its overseas operations in countries like the US, the UK, China, Germany, Hungary and Brazil. By instituting its own Gyanodaya learning centre, this helped facilitate the transfer of best practices across the group companies. The training methodology compromised of classroom teaching and e-learning initiatives and the training was accessible to the group employees through the group-wide intranet.
The once very expensive development of computer-based training is being democratized and put to the fingertips of everyone through e-learning tools (Briscoe, 2009). This format for delivery would seem the most appropriate approach for the UK headquarters to implement its objectives across to the American subsidiary as these two countries share a similarities in language, culture and respective laws regarding training and development. Although this approach is simple, efficient and a cost effective means of delivering training across global platforms, there may still be implementation and cultural acceptance issues where China is concerned.
Black, Mendenhall & Oddou’s Framework for Selection Appropriate Training Methods
A great example of how a multinational should go about implementing its training and development schemes is highlighted in Mendenhall’s framework for selecting appropriate training methods (Please refer to Figiure 3.0 & 4.0). Taking the form of a questionnaire, this framework identifies and distinguishes different cultures through the degree of novelty the candidate (delivering the training) will be exposed to. The higher the degree of novelty, the more rigorous the training is. For example, if the UK based multinational had plans to send two candidates abroad (to implement the training) – one to China, and the other to America. The candidate sent to China would surely need to undergo a more thorough training regimen than the colleague who is being sent to America.
Tim Mason (CEO of Fresh and Easy) and Ken Towle (CEO of Tesco China) are the two highly paid, very experienced and well respected managers. Although they both cut their teeth climbing up the corporate ladder in the UK, when it came to implementing business strategy abroad, neither of their strategies came to fruition. For the purpose of this essay these two candidates will illustrate how Tesco Plc. have seriously underestimated the importance that training and development plays in the global context of business, and possibly suggest alternative approaches for future companies to consider when implementing such initiatives.
Tim Mason relocated to the U.S. with his family as part of the assignment of building the U.S. presence. He led the team researching the U.S. market prior to the company opening its first American store. Despite initial plans to implement a similar business model to that of Tesco UK stores, in 2010 Tesco reported a trading loss of Â£142m from Fresh & Easy (This is Money, 2009). As of yet Fresh and Easy are still to break even, which can be attributed to high overheads that Tesco claim is necessary in order to successfully compete in the market. However, experts say that a misunderstanding of the American consumer was the real reason why the company had had to close stores all over the country and rethink its implementation strategy.
Across the North Pacific Ocean, Ken Towel has been having his go at cracking one of the most lucrative markets in the world. Granted that China presents many opportunities, there are also many cultural, political and legislative nuances that have to be appropriately and effectively dealt with in order for them to reap the riches in this wild and wonderful country. Ken Towle’s approach to capturing market share, highlighted his naivety of the Chinese consumer, granted that he has now amended his short coming, this has still came at a high price to Tesco.
Highlighted in this real life example, is the message that in order to succeed abroad, especially in countries where the degree of novelty and interaction is high; companies must tailor their training programs to be relevant and much more interactive rather than simply educational and informative. By enhancing the level of involvement i.e. through role playing exercises and visits, the candidate will feel confident and able, and hopefully develop global leadership skills that can be applied to future assignments and projects. This will enable career progression and enhance the talent pool, which will most certainly be a key attribute for any company wishing to succeed in an international business environment.
Conclusion & Recommendations
Throughout, it has been stressed that relying on a common set of polices is limiting, and disregards many issues relating to the global training and development. In order to be able to successfully implement a set of initiatives globally, the multinational needs to take in to account the differences that are present between headquarters and respective subsidiary, whether they are language, culture, law or legislation. By recognizing these differences the company will develop a set of culturally sound and universally accepted HR practices, which will improve their chances of success.
To conclude, America and the UK are in many ways similar. It would therefore be feasible to implement a common set of management training and development policies across these two platforms. However, when China is added to the equation this complicates matters slightly. Even though this country is becoming better understood and more economically developed, there is still a large difference between the East and the West. Where training and development is concerned, multinationals must adhere to the local way of life and understand the people and their environment in order develop a truly effective strategy.
These Chinese have a saying that puts emphasis on many of the arguments made in this essay.
(rÃ¹ xiÃ„Âng suÃ sÃº)
When entering a village, follow the customs
Upon receiving this assignment it quickly became apparent that there was no ‘yes or no’ answer to the question. After consulting with my other group members, we developed various arguments and ideas related to global training and development. For our presentation we decided to feature topics related to expatriation, carrier progression and gender equality to highlight the issues reading the posed question. After researching more around the subject area, I later found these to become less relevant and decided to take a different approach.
For my essay I decided to focus more directly at addressing the issue – Can a multinational have a common set of policies? Having debated what direction to take, I decided to explore the question by looking at the different approaches (Localization vs. Standardization) to training and development. I felt that this was more relevant due to the fact that it directly addresses the question and explores important themes related to the subject area. I attempted to put myself in the shoes of a business leader, and with the help of academic literature was able to arrive at a solid conclusion.
Having not known much about training and development beforehand, I feel now that I have a good understanding of the problems that face multinational when trying to implement these initiatives abroad. Working in a group allowed me the chance to develop arguments, and contest ideas with my team members. We all worked well together and benefitted from one another’s input, which helped in our understanding of the subject and the question.