Management Development Programme - A Review of MCI and the DTZ Pieda Consulting

 
Management Development Programme - A Review of MCI and the DTZ Pieda Consulting
A Review of MCI and the

Management Development

            Programme

            DTZ Pieda Consulting

                                   D... ..
                                         "bB.nt for
RESEARCH   REPORT   RR67           EducatIoII ..... Empl.,ment
Management Development Programme - A Review of MCI and the DTZ Pieda Consulting
Research Report
            No 67

    A Review of MC! and the
         Management
    Development Programme

                                                      DTZ Pieda Consulting

The Views expressed in this report are the authors' and do not necessarily reflect those of the Department for Education and Employment.

.:. Crown Copyright 1998. Published with the permission of DfEE on behalf of the Controller of Her Majesty's Stationery Office. Applications for
reproduction should be made in writing to The Crown Copyright Unit, Her Majesty's Stationery Office, SI elements House, 2�16 Colegate. Norwich
NR31BQ.

ISBN 0 85522 790 7

July 1998
CONTENTS

SECTION                                                                                                                                             PAGE

     EXECUTIVE SUMMARY               ........ .   ............... . . . . . . . . . . . . . . . . . . ..... . . . . ............................. ............   i

I.   INTRODUCTION   .......... . . . . . . . . . . . . . . .. . . . . . ........................................ ............................ ......          1

2.   MANAGEMENT DEVELOPMENT AND THE
     COMPETITIVENESS PROGRAMME                                 . . .............................. . . . . ......... ...........................               5

3.   IMPACT OF MCI ON INTERMEDIARY ORGANISATIONS                                                                ...................... ..........            II

4.   IMPACT OF MCI ON EMPLOYERS                                                  .
                                                             . . . . . . ......... .......................................................                   19

5.   IMPACT OF MANAGEMENT DEVELOPMENT ON EMPLOYERS .................... 25

6.   KEY FINDINGS AND CONCLUSIONS                                  ..... .............. ....................         .   ................   .   ..........   29
•   A Revi ew of MC! and t h e   ManagementD evel op ment P rogramme·

EXECUTIVE SUMMARY

I.         This study was commissioned by the Department for Education and
           Employment (DjEE) to examine the wider impact of the Management Charter
           Initiative (MCI) on organisations undertaking management development and
           the intermediaries who work in the market place to promote and deliver such
           opportunities.

OBJECTIVES OF THE STUDY

2.         The study had the following objectives:

           •       To review and assess employers awareness of the opportumtIes to
                   undertake management development, and the availability of specific
                   management development products

           •       To review the level of actual take-up of these opportunities, and assess
                   to what extent MCI activities have impacted upon this

           •       To identify the resulting impacts of management development on
                   businesses, and

           •       To review the impact of MCI supported actIvItIes on intermediary
                   organisations who promote and/or deliver management development.

3.         The research has drawn on several sources of information.              Previous
           evaluation reports, commissioned by both the DjEE and the MCI, have been
           used.    Such work generally reports on surveys of narrow target groups
           involved in management development activity (e.g. TECs, Business Schools,
           SMEs, etc).      In addition to these, wider scoping work on the extent of
           management development currently being undertaken in England has also
           been referred to.

THEMES OF THE REVIEW

4.         The themes outlined overleaf have been used in assessmg the extent and
           impact of MCI related management development:
•   A Revi ew of Mer and t h e   ManagementD evel op ment Programme·                         11

           •       Impact of MCI on the intermediaries who promote and provide
                   management development

                      Awareness and understanding of MCI

                   - Use of management development products/services

                   - Satisfaction with MCI products/services

                   - Impact of MCI on the provision of management development.

           •       Impact of MCI on employers

                   - Awareness of the MCI and its role in management development

                   - Awareness of management development issues and opportunities

                   - Take-up of management development by type of activity

                      Take-up of specific MCI Products

                   - Obstacles to additional take-up of MD.

          •        Impact of Management Development on employers

                   - The scope and scale of business benefits associated with management
                     development activity in firms.

CONCLUSIONS

5.        The following conclusions were drawn from the review of MCI actlVlty
          nationally, and the more local responses available from TECs and Business
          Schools around the country:

          •        there are mixed messages on the level of MD activity being undertaken
                   in England. However, much of the confusion that exists in the various
                   reports on the scale of MD activity appears to result from the particular
                   definition taken of what MD is

          •        in general, more MD activity is taking place now than a decade ago
                   and the trend appears to indicate an increase in overall activity in future
•   A Revi ew of MC! and th e   ManagementD evel op ment P rogramme·                       III

          •        the increased level of activity is not focused on any one sector or size
                   band of finn in particular although larger finns tend to undertake
                   slightly more MD training per employee than SMEs

           •       current MD activity is made up of a mix of MD training activities
                   marketed to companies by external intennediary organisations and,
                   often less fonnal, in-house developed activity (for which no accurate
                   national records are kept)

          •        there is an apparent shift towards the increased use of in-house MD as
                   opposed to 'bought in' activities.     This particularly appears to be the
                   case where finns have used external products in the past and are now
                   tailoring these to their own requirements

           •       whilst MCr has undoubtedly affected the national provision and take­
                   up of MD in a positive manner - most notably by developing
                   management standards - there is little knowledge of the MCr among
                   end users of MD products and services

           •       intennediary organisations, with which the MCr has been working
                   have benefited from the regional structure of advisors that MCr has
                   provided

           •       however, there appears to be a significant degree of risk attached to the
                   regional advisor model in marketing the MCr.         The regional model
                   implies that links are principally being made between individuals and
                   not organisations.     As a result, the distribution of the MCr message
                   further into an organisation can be limited and is also at risk from staff
                   changes in intennediary organisations

           •       significantly lower benefits can be identified with specific MCr
                   products.     This is due to a range of factors including a perception of
                   relatively high prices for materials, a relatively low impact realised
                   from the marketing of MCr (especially of free materials) and a
                   perceived lack of applicability to finns

           •       many TECs are unaware of the Competitiveness Programme in name,
                   but have been involved in using materials developed under the
                   Programme

           •       no clear linkage between MD and bottom line business benefits can be
                   identified by finns. Instead of seeking clearly identified goals, many
                   finns are undertaking management development in the belief that it
                   will bring general improvements to their operations.         Furthennore,
                   there is a general consensus that benefits may accrue over a fairly long
                   period of time.
A Review of MC! and t he ManagementDevel op ment P rogramme·                                                                                                       I

1.    INTRODUCTION

1.1   This report is submitted as part of a wider work programme by DTZ Pieda Consulting
      for DjEE. The wider research brief has been to provide an evaluation of the bottom
      line business benefits of management development (MD) activities supported by the
      Management Charter Initiative (MCI) whether directly or indirectly.                                                          The current
      report reviews the policy environment within which MCI has been working, the issues
      surrounding MD in general and, with reference to previous research, reviews the
      impacts of the MCI to date on organisations involved in delivering MD and the firms
      participating in various MD activities.

1.2   The research outputs are two-fold. First, this report provides a review of the wider
      Management                       Development       Competitiveness               Programme                 (hereinafter                                       'the
      Programme') and previous work that is available on the activities related to MD and
      the MCr. A second report, prepared as part of the same research exercise, provides an
      evaluation of the business benefits attached to management development activities in
      firms.     This draws on a national survey of firms that have recently participated in a
      range of management development activities.

      B A CKG ROUND           TO THE REVIEW

1.3   Figure    1.1 summarises previous evaluative research applicable to the delivery of MCI
      sponsored MD activity.

                                  ••
                                                                                             .
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A Revi ew of MCI and t h e ManagementD evel op ment P rogramme·                         2

1.4        The current report draws on this literature to provide an assessment of the scope and
           scale of MD activity delivered and the key issues surrounding the role of MCI in the
           process 1. In particular, we have drawn together the available evidence in terms of the
           following:

           •        employers' levels of awareness of management development - in terms both of
                    its importance and the opportunities available

           •        employers' take-up of opportunities for training

           •        the resulting impacts of MD on business performance

           •        the impact of MCI supported activities on intermediary organisations who
                    promote and/or deliver MD

           •        the impact of promoting MD on available products and MD events.

1.5        In undertaking the review, we have not utilised the findings from our own survey of
           firms.    This analysis is contained within a separate report, which focuses on the
           specific nature of the benefits to firms from management development activity and
           whether a clear and quantitative link between MD and bottom line business benefits is
           identifiable and measurable.

           S TRUC TURE OF THE REpO R T

1.6        The report follows in Section          2 by summarising the development of public sector
           involvement in management development - leading to the ultimate formation of the
           MCI - in respect of the wider UK government's competitiveness progranune.
           Sections   3 to 5 then follow by providing a review of evidence to date.       Section   6
           draws the key findings of the review together. The review has been grouped into the
           following themes:

           •        Impact of MCI on intermediaries promoting / providing M D (Section 3)

                             - Awareness and understanding of MCI

                             - Use of MD products/services

                             - Satisfaction with MCI products/services

                             - Impact of MCI on MD Provision

1   In the current report we restrict ourselves to an analysis of MD in England only.
A Review of MC! and t he ManagementDevel op ment P rogramme·        3

•     Impact of MC I on employers (Section      4)

              - Awareness of MD opportunities and the MCr

              - Take-up of MD activity by type

              - Take-up of specific MCr Products

              - Obstacles to take-up of MD

•     Impact of Management Development on employers (Section   5)

              - Business benefits

•     Key findings of Review and Conclusions (Section 6)
A Revi ew of MC! and t h e ManagementD evel op ment P rogramme·                                 5

2.        MANAGEMENT DEVELOPMENT AND THE COMPETITIVENESS
          PROGRAMME

          M AN AGE MENT DEVELO PMENT, F IRM CO MPE TI TIVENESS AND N A TION AL POL ICY

2.1       Over the past decade many organisations have begun to recognise that a change in
          internal management functions, closely linked to the need for newer and more flexible
          ways of doing business, has been necessary. Many firms have therefore identified a
          need to equip newer generations of managers - and older managers lacking formal
           management qualifications - with appropriate attitudes, skills and experience to
          undertake their jobs effectively.

2.2       At the same time, a progressive shift among policy makers towards an appreciation of
           the role of management training in improving firms' competitiveness has become
           apparent. In particular there has been a shift from the promotion of simple initiatives
          using external sources to tackle specific projects, towards more sophisticated and
          holistic approaches.       These have sought to develop the management capacity and
           competence of firms and, as a result, increase their overall competitiveness.

2.3        The role of management development in improving competitiveness was formalised
           in national policy making through the Government's Competitiveness White Paper of
                 2   As a direct result of the White Paper, the UK Competitiveness Programme
          1993
          was launched in     1994, with two further White Papers building progressively on the
           agenda set out by the first.

2.4       One dimension through which the Competitiveness Progr amme has been seeking to
           improve UK firms' competitivity is the targeting of groups within the (current and
           potential) workforce for enhanced learning opportunities.           The concept of 'lifelong
           learning' has become central to this. It is now widely accepted that through enabling
           lifelong learning and extending the range of opportunities for learning - whether in a
           formalised channel or not - firms can increase the quality of their workforce and thus
           improve their competitive position. Two wider developments connected with lifelong
           learning have had a bearing on management development.

2   The increasing importance of the link between management development and competitivity was not
constrained to the UK. The Commission of the European Communities report Growth. Competitiveness,
Employment: The Challenges and Ways Forward into the     2 t" Century was published during 1993, highlighting
the role of management development. Similar work can be identified in a number of international HR and
management j ournals at this time.
A Review of MeI and t he ManagementDevelop ment P rogramme·                                         6

2.5       The first involves the Investors in People (liP) process which is an employer led
          programme, but also provides an opportunity for employees to improve their skills
          through training or qualifications. Management training represents one of these
          opportunities. In turn, the firm involved in gaining the liP accreditation benefits from
          a more focused and experienced workforce and, through managers' interaction with
          those in other companies, the translation of good management practice from
          elsewhere.

2.6       The second lifelong learning approach is the promotion of competence based
          accredited management qualifications via a lead body for management - the
          Management Charter Initiative (MCI). In practice, these two components - one inside
          the Programme, the other outside of it - have worked along side each other.

          THE ROL E OF THE M AN AG E MENT CH A R TER INI TI A TIVE

                                                                                              3
2.7       The MCr was formed in 1988 and became the national lead body for management in
          1990. Lead body status led to the MCI's key role in designing and delivering a
          strategic framework of standards for management NVQs/SVQs. The resulting
          framework was devised through an examination of best practice across a full range of
          management functions - and levels - in a cross-section of over 3,000 firms of all types
          and size.

2.8       The Mcr is not an accreditation or training body itself. Indeed, no clear rationale
          exists for centralised intervention of this form. Accreditation of competence based
          management development (CBMD) qualifications is undertaken by the Qualifications
          and Curriculum Agency (QCA) and the Scottish Qualifications Agency (SQA).
          Training delivery is undertaken by various training providers, such as private sector
          training companies, business schools and higher education colleges, with promotion
          and funding assistance being undertaken by TECs and Business Links. The use of
          this existing network was thought to be the most cost effective and practicable method
          of delivering management development services.

           Objectives of MCI

2.9       The current strategic objectives of the MCr are set out in their Business Plan for
          1996/98. In summary, these are to:

           •       work in alliance with intermediary organisations concerned with management
                   and management development

3   Previous to the MC! the development and implementation of management standards was taking place in an
unfocused manner, and often by a broad and relatively unconnected set of actors in and out of the public sector.
A Revi ew of Mer and t h e ManagementD evel op ment P rogramme·                      7

        •      foster relationships at both national and local level to improve the quality and
               relevance of CBMD

        •      ensure the different needs of Small and Medium-sized Enterprises (SMEs) are
               understood by those involved in promoting and delivering management
               development

        •      provide support infrastructure to identified training providers

        •      raise awareness of the importance of management development to business
               performance, and

        •      ensure that management and managerial performance are perceived to be
               central to the objectives of the Government's Competitiveness Programme.

2.10    The MCI Business Plan also sets out the key areas of risk and important dependencies
        associated with delivering CBMD to firms and organisations in the market place. A
        range of critical success factors are identified by MCI as being important to the
        success of its programme.    Those relevant to the wider Competitiveness Programme
        are:

        •      the need to expand on the successes of the first year 1995/96 of the
               Competitiveness Programme through provision of good practice exemplars
               and additional materials where necessary

        •      the need to integrate Business School activities into the remit of MC I

        •      promotion of a generally wider understanding of the key role of CBMD in
               delivering business benefits, and

        •      developing and building on strategic alliances made by the MCI in its first
               year of operations.

2.1 1   In addition to this the Business Plan sets out the management processes t o b e used by
        MCI, a timetable for its work programme and detailed milestones and outputs for each
        of its planned programme s (Task and Target Profiles).

2.12    The MCI have set themselves six Key Performance Indicators (KPIs) with which to
        assess the effectiveness of their operations.       These relate well to the strategic
        objectives and cover the necessary ground for MCI to evaluate internally the success
A R evi ew of MCI and th e ManagementD evel op ment P rogramme·                                                8

                                                    4
            or otherwise of their various activities (Figure               2.1). However, they are not sufficient
            to evaluate the impact of the MC! more widely.

                           .
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                      .
                                 . .
                                         KeyPerf�rm��ce Indicat�r$()VIq Business plan)                  .
                                                                                                         .
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             Assessment of:                    Indicators used:
             Provision of MD                       Number ofTECs, Business Links, 110s and training providers using
                                                   andlor advocating the use of CBMD
             Understanding of CBMD                 Intermediary organisations perception of the relevance and use
             Use of MC! based MD materials         The range of organisations using materials developed by MCr
             Dissemination of good practice via    The perception of the success of exemplar projects in encouraging the
             exemplar case studies                 take-up of CB MD (with a specific focus on theSME sector)
             Change in Business Performance        Improved business performance
             due 10 MD
             Adoption ojCBMD among                 Number of BusinessSchools providing local access to CBMD
             Business Schools                      programmes (with a specific focus on the needs ofSME managers)

           M AN AG E MENT S T AND A RDS AND THE MCI

2.13       The MC! recently published its new set of management standards which are now
           available as NVQs/SVQs at Levels                  3 to 5. Qualifications based on these areas are
           competence-based, i.e. they use items of work as evidence of a manager's ability to
           perform to a certain standard of competence - beginning with NVQ Level                                          3
            (supervisory) through Level           4 Gunior management) and 5 (middle management). The
           new standards describe management best practice and are all embracing. They
           represent the full 'toolkit' of management competence on which a manager, in any
           sector and at any level, can draw.

2.14       The Management Standards comprise around sixty individual units with each unit
           relating to a specific management competency.                       The units are grouped within the
           following seven key categories:

             •            Managing Activities                     •         Managing Information

             •            Managing Resources                      •         Managing Energy

             •            Managing People                         •         Managing Quality

                                                                  •         Managing Projects

4   It is important to note that 'success' should not be considered a binary indicator - either successful or not. Due
to the nature of much MD activity, there will be a spectrum of impact from highly successful to activities that
do not appear to have any impact at all. The difficulty in identifYing and measuring the impact of management
development stems from the disparate causal link between management development inputs and quantifiable
business outputs (i.e. reduced costs, increased revenues). This key issue has remained consistently unresolved
by previous research on the topic despite various methodologies put forward to 'measure' the impact of MD.
A Review of MC! and t he ManagementDevel op ment Programme·                         9

2.15   In addition to their use in accrediting qualifications, the management standards are
       used by many firms for the benchrnarking of their own management processes against
       a national measure of good management practice.            Furthermore, the standards
       framework has been used by many firms as a basis for the development of in-house
       management training needs assessments and training materials. Finally, the standards
       can, and have been, used as a tool in developing or re-designing business processes
       across the full range of activities and functions found within firms.

       THE PROMOTION OF MANAGEMENT DEVELOPMENT BY THE MCI

2.16   In delivering and promoting the management standards, the MCI has appointed
       Management Development Advisers (MDAs) on a regional basis for Great Britain.
       MDAs have worked closely with those delivering the standards to firms - this
       involves the TECsILECs, Business Links, Business Schools, ITOINTOs and various
       other training providers.

2.17   The MCI has also been active in a wider sense in promoting the concept and
       importance of management development to various sectors and business types -
       importantly to Small and Medium-sized Enterprises (SMEs). In its wider operations
       linked with promotion of MD, the MCI has drawn on links with various other
       intermediary organisations. This model allows the MCI to have a greater impact, and
       thus increase the level of visibility of CBMD among UK firms than would otherwise
       be the case.
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3.        IMPACT OF MCI ON INTERMEDIARY ORGANISATIONS

3.1       Two sets of documents have been used to provide an assessment of the issues relevant
          to MD intermediaries:

          •        Mcr - TEC Satisfaction Surveys

          •        Business School Surveys.

3.2       MCr-TEC Satisfaction Surveys are available for 1996 and 1997. Commissioned by
          the MCr, these surveys have specifically focused on TECs although the MCr has been
          working with other intermediary groups in promoting MD to organisations in the
          private and public sectors. Half of the 74 English TECs were involved in the survey
          process for the 1996 and 1997 surveys.

3.3       The questionnaires used to produce the two TEC Satisfaction reports vary. This
          provides some degree of difficulty in tracking and judging the effect of Mcr activities
          over time. However, there is sufficient commonality between the two studies to
          comment on key findings across the studies in general.

3.4       During 1995, the Employment Department also commissioned research on the extent
                                                                       5
          and nature of Business School activities related to CBMD        In addition to survey
          based fieldwork, the 1995 report provided 6 case studies of Business School activities
          in the MD field. The survey element of this work has since been repeated annually.
          The two documents can therefore be used to provide a preliminary picture of MD
          activity within the Business School community.

          AW A RENESS AND UNDERS T ANDING OF MCI

3.5       There appears to be a high degree of awareness among TEC staff of MCr. This is to
          be expected, given the important nature of the TECs as a intermediaries in the
          promotion of MD. Also, awareness of MCr appears to be higher at the level of Chief
          Executive! Director within the TECs. However, this observation is drawn from a
          relatively small number of contacts within the 1996 study.

5   Mainly the provision ofNVQs/SVQs or counterpart academic qualifications that can be adequately mapped
onto the NVQ structure
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3.6        There is, however, a lower (but growing) level of awareness of the exact role of
           MCI. In 1996, just over a third (37%) of respondents in TECs thought that the main
           role of MCI was to provide strategic advice on MD, with the development of
           management standards falling closely behind (31% of respondents). By 1997, the
           perception of MCI had clearly changed. Over half (57%) of respondents in the 1997
           study indicated that the main role of MCI was provision of strategic advice.

3.7        The largest responses to what MCI is, and what it does, relate to specific
           products only not to its strategic role.   Competence based management standards
           and the provision of information materials figure particularly high in this respect.
           This result is disappointing given that those surveyed were the main contact point
           between MCI and the respective TEC. One would therefore have expected the
           strategic role of MCI to have figured much more highly.

3.8        Awareness of the MCI Competitiveness Programme, although high in an absolute
           sense (76% of respondents in the 1997 satisfaction survey), is lower than one would
           expect among TEC staff. The low level of awareness is further reduced when
           considering knowledge of specific materials and assistance available to TECs as part
           of the Programme.

3.9        Further questions in the satisfaction surveys have found that although TEC staff might
           be unaware of the Progr amme itself, they had, in fact, seen and made use of the free
           material. This was the case in all but two TECs.

3.10       Awareness of MCI was addressed in the 1996 Business School survey, where
           questions were asked on the proportion of business school staff that were familiar
                                                          6
           with the MCI standards in all their gUises . A high degree of awareness was
           displayed, with some 85% of all respondents having first hand experience with the
           original 1991 MCI management standards. A slightly lower proportion were also
           familiar with the draft revised standards. In slight contradiction, however, is the fact
           that estimates of the number of staff familiar with MCI published standards were
           somewhat lower.

6   i.e. the 1991 Standards, Senior Standards 1995, Energy Management Standards published in 1995 and Quality
and Project Management Standards.
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3.11   It is clear from both business school surveys that experience and knowledge of MCI,
       its aims and products is much more developed in the new universities and other higher
       education colleges than in the older university sector. This is partly due to the more
       vocational nature of courses delivered in the newer universities, but also the attitudes
       of staff towards the usefulness of the management standards. Reservations among
       staff in the older institutions appear to be focused on a lack of awareness of the
       sectoral and skills coverage provided by the standards.

3.12   What remains unclear is how the adoption of MCI-type standards, as part of many
       new or re-developed management courses, will affect the sector more generally - and
       critically how these newer courses will cascade the profile of MD into firms in future.

       USE OF MANAG E MENT D EVELO PMENT

3.13   There appears to be a      mixed response to formal support for management
       development among the TECs. Inclusion of MD as a specific objective within the
       TEC business plan is reported for a large number of TECs (94% in 1996). This
       support appeared to have declined by 1997 to 59% of TECs. It appears to be the case
       that the decline in formal support is linked to the difficulties that TECs have with
       supporting activities that have no clear revenue stream attached to them.

3.14   When considering only MCI management standards, there is a much stronger - and
       developing - level of support among TECs. 83% of TEC in the 1997 satisfaction
       survey thought that standards would be useful to businesses in their area, and that the
       TEC was planning to use, or already using, the new standards as developed by MC!.
       There was only one definite negative response when questioned on the TEC plans for
       use of the standards. Clearly, the profile of the standards has been assisted by the
       marketing efforts of MCI throughout late 1996 and early 1997, which have therefore
       been largely successful.

3.15   One of the key criticisms to come out of the 1996 satisfaction survey was that MCI
       products were often too expensive     for the TEC to adopt. Just under half (48%) of
       the TECs surveyed thought this to be the case. The reason for the feeling of over­
       priced resources fell to specific products and was not a perception that all products
       were too expensive.
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3.16       Specific products that were mentioned by a large proportion of TECs as being of
           high quality   were the MCr Pocket Directory (85%), Good Managers Guide (81%)
           and the Management Standards Directory (62%). Nevertheless, it is important to note
           that both the Standards Directory and the MCr Pocketbook also featured significantly
           in the products thought to be relatively expensive. TECs therefore appear to view the
           use of these resources with firms in their area as being limited by their cost.

3.17       The trend between the 1996 and 1997 studies shows that whilst MD remams
           unsupported by many TECs, a move towards increasing the role of MD within overall
           training delivered to firms is beginning to emerge. However, TEC promotion of MD
           still largely exists in the shadow of other - funded - elements of training provision.

3.18       The Business School surveys provide an indication of the level of take-up ofNVQs in
                                                 7
           management. By September 1994 , close to 8,000 people had been awarded
           certification, with a further 25,900 (rounded) registered on courses, increasing to
           115,300 (65,720 full time equivalents) in 1996. It is not clear from the two reports
           how indicative this situation is of the national picture ofNVQs in management. Nor
           is the basis of the initial 25,900 student registrations known (i.e. whether these are
           absolute numbers or full time equivalents).

3.19       In terms of the use of MCI products, the 1995 report focuses on MCr management
           standards specifically. The relative concentration of use of MCI standards as part of
           Diploma and Certificate qualifications, as opposed to degree courses or MBA
           programmes, is clear from the survey analysis. This was felt to be due to the design
           of the latter type of courses, remaining firmly based around course work and
           examination and not work-based experience/assignments.

3.20       The survey also found that        "new universities" and "other colleges" were much
           more likely to be using MCI standards than the old university sector. Around
           62% of all Diplomas and Certificates offered by new universities and other colleges
           used MCr standards, whereas the figure for old universities was 35%.

3.21       A note of caution needs to be placed on these comparisons however. In 1995 the
           number of old universities offering NVQ qualifications in management was low in
           absolute number (only 2 programmes against 30 in the new university sector for
           example), and therefore the results as presented are not statistically robust.

7   Both Business School reports cover Scotland and therefore report for number of NVQs plus Scottish
Vocational Qualifications (SVQs).
_A _   w
              __o f_ __
                      CI_ _

3.22   Apart from their use as the basis of NVQ qualifications, Mcr standards were being
       used more widely in the business school community. Again, this broad use of the
       standards appears to have been focused on the Certificate and Diploma courses
       offered by institutions. Examples of broader use include informing the design of new
       courses, both as the focal basis of a new course and when mapping existing
       qualifications for equivalence withNVQs.

3.23   A key finding of the 1995 business school report in respect of the MCr was that many
       institutions found difficulties in using MCI standards when mapping equivalence
       between existing courses and NVQs. Many reasons were given for this, but 70% of
       respondents mentioned a lack of awareness among prospective students and their
       employers of the MCr standards. 45% also stated that lack of their own staffs
       awareness of Mcr standards also posed a major problem in the mapping exercise.
       Just under three quarters (73%) of respondents felt that the perceived credibility of the
       MCr standards was low and that this too created problems in mapping qualifications.

       S A TISF A C TION WI TH MCI

3.24   The proportion of TECs within the satisfaction surveys responding that MCr had
       displayed a clear strategic direction has declined, from 67% in 1996 to 47% in 1997.
       This highlights, and underlines, the apparent difficulties that some TECs have had
       in understanding the main role of MC!.             Furthermore, there is an apparent
       divergence between the lower level of satisfaction with the MCr "as an organisation"
       and the much higher degree of satisfaction with "specific products" and the MCr
       regional representatives (see below).

3.25   rn general, however, the total number of TECs reporting poor performance by MCr is
       low. Only 11% of the sample in 1997 (i.e. 8 TECs) felt that the performance of Mcr
       had in general been poor, with a similar number recording "excellent".

       S A TISF A C TION WI TH MCI M AN AG E MENT D EV ELOP MENT ADV ISO R S

3.26   The level of satisfaction with the support provided by individual MCr Regional
       Management Development Advisors (MDAs) has been investigated through questions
       on the frequency and quality of contact with MDAs as part of the satisfaction survey.
.:::
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                                                                            3    em__e_

3.27   From the results of the surveys undertaken so far, there appears to be a high degree of
       satisfaction with, and support for, MCI advisors. Whilst 92% of all TEes sampled
       in 1996 (52 in total) stated that they were happy with the frequency of contact with
       their respective advisor, only 66% of TEes sampled in 1997 felt the MDA to be very
       accessible. During 1997, almost one third of TEes had contact with the advisor at
       least once a month.

3.28   The results of the 1996 study highlighted that 69% of TECs felt there to be nothing
       further that MDAs could offer,     and 85% of TEes were content with the quality of
       service offered by the advisor. In 1997, the quality of the relationship with the
       advisor was ranked from excellent (=1) to poor (=4) with an average score of 1.88
       across all English regions. The highest scores were recorded by West Midlands and
       Eastern region (both scoring 1.3), with a general correlation between perceived quality
       of relationship and accessibility.

3.29   Importantly, the perception of most TEes is that advisors are there to assist the TEe
       in their work with employers, and not that TEes should be helping MDAs. This is a
       significant finding given the general reticence, and practical difficulties, of TEes to
       take on non-revenue funded responsibilities.

3.30   A number of problems arise in interpreting TEe satisfaction with the MeI from the
       results of these surveys. First, coverage of the surveys is not comprehensive. Indeed,
       in 1997, no response was recorded from 23 TEes (representing 31 % of all TEes in
       England). For this reason the views expressed cannot be taken to imply that all TEes
       are satisfied, and no indication is available of the reasons for non-satisfaction of those
       not taking part in the research.

3.31   Secondly, and perhaps more importantly, TEe staff involved in the survey process
       were largely the main point of regular contact with the MDA. The line of questioning
       used does not therefore allow a general picture to be obtained of the satisfaction
       apparent within the TEe as a whole. If contact between MeI and the TEe is not
       secured on a broader level, then the benefits of the strategic role of the MeI to TEe
       staff and those who they advise are likely to be lost.
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                               __

       THE I   MP A C TOF THE MCI ON MD PROV IS ION

3.32   The TEC satisfaction surveys appear to suggest that the MCI has not yet been
       able to significantly shift TEC strategies with respect to MD. Very few TECs
       have formally adopted MD within their strategic business plans for instance. Where
       MD is becoming included in TEC activities it is often as a part of a wider
       development - with increasing the numbers of firms working towards liP accreditation
       being seen as the more important goal for TECs, rather than the number of MD
       courses or training products being "sold" into the marketplace.

3.33   Nonetheless, MD is increasing its profile in the TEC sector. A small number of TECs
       have now recognised MD as an intemal part of the process they are involved with in
       firms in their area. Others have included MD training products within the core
       portfolio of what they offer to local businesses. There is now a great deal of evidence
       that the majority of TECs will be introducing MD more formally to their clients in the
       near future. Close monitoring of activities over the next 1 2 months will assist in
       validating the claims of many TECs as part of the TEC satisfaction survey of 1997
       that they will be introducing MD as part of their strategic positioning.
A_ R_
           _                                       t_D                     · _ _______________ 19
                                                                           __

4.         THE IMP ACT OF MCI ON EMPLOYERS

4.1        Three sets of documents are available with which to evaluate the impact of the MCI's
           activities on employers:

           •        MC! - TEC Tracking Studies

           •       Segal Quince Wicksteed - "Management Training for Growth SMEs"

           •        Open University - "Portrait of MD        H.

4.2        A series of Tracking Studies have been undertaken throughout the operation of the
           MCI (1995 - 1997). These are based on an annual sample of around 1,000 firms
           drawn up to reflect the sectoral and size band characteristics of the British economy.
           The studies have built on previous management training and development surveys of
           private sector organisations nationalll.

4.3        The 1995 study was however, tied closely to an assessment of the views and use of
                                                9
           the Investors in People progranune as well as the products developed by MCr. The
           level of investigation of the role and impact of MCI that the 1995 study provides is,
           therefore, somewhat lower than in subsequent years. Both the 1996 and 1997 studies
           are much more focused on the work of MCI and, as a consequence, contain more
           relevant data for the current analysis.

4.4        During 1995, the Department of Trade and Industry commissioned evaluative research
           by Segal Quince Wicksteed Ltd of MD activities in 49 SMEs. The focus of the
           research was to investigate the links between SME investment in MD and subsequent
           business growth.

4.5        Finally, the Open University have recently published 'A Portrait of Management
           Development'. This provides the most comprehensive snap-shot available of the
           current state of MD in the UK. The research was based on a survey of managers
           drawn from over 600 firms. Panels were used to differentiate companies by size with
           medium and large-sized firms (defined as employing more than 100 staff) in one
           panel and SMEs in a second panel. Of the firms in the SME panel more than 60%
           actually employed fewer than 20 staff.

8   The 1996 and 1997 surveys also encompassed public sector activities.
9   Due to being part funded by liP UK.
��A R�ev_i e                �g�e _

4.6    Whilst the research framework was largely qualitative, the use of a quantitative survey
       instrument allowed for the analysis of potential causal links between MD activity and
       resultant business impacts in more detail than had been undertaken by any previous
       study. In addition, the survey instrument used with the SME panel was tailored to
       reflect the different issues smaller firms were known to face in using MD.

       AW A RENESS OF M AN AGEM ENT DEVELOPM ENT OPPO RT UNIT IES
       ANDTHEMCI

4.7    Awareness of MCI.      Overall, just two fifths of firms were aware of MCI (39% of the
       tracking study sample in 1997). Of these firms, views varied as to what exactly was
       MCI's role. The largest response was the "setting of competence based management
       standards and provision of training products". However, over a third of these did not
       appreciate MCr's wider role. One possible, and plausible, reason for this is the front
       line role of intermediaries in marketing MD rather than MCI itself.

4.8    Information/Awareness of      MD . The key information source used by firms for
       information on MD are published articles in management and trade journals. These
       were used by over a third (37%) of firms in the 1997 tracking study. These provide
       firms with an indication of what is working for others, both in their sector and/or size
       of business and also more generally. The popularity of such material is believed to
       derive directly from an increase in general awareness of MD and could therefore be
       attributed, at least in part, to the success of the various institutions involved -
       including MCr.

4.9    Intermediary organisations using and marketing the products developed by national
       bodies are the second most popular channel through which information on MD is
       accessed. Local TECs were quoted as the primary source by 35% of respondents in
       1995 for example, and this has remained relatively constant during 1996 and 1997. In
       short, TECs are the key intermediary information providers on MD.

4.10   Information on MD is not, generally, accessed directly through either the MCI, or any
       other national bodies. A relatively small proportion of firms use the MCI as their
       primary source of information on management development. Over the period 1995 to
       1997, between 5% and 10% of firms in the tracking studies had used the MCI for
       information purposes.        The trend has been for a small upwards rise. As a
       comparator, this use of MCI for information on MD is similar to the proportion of
       firms using the Institute of Management.
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4.11       Thus, whilst gains have been made by MCI in providing information on MD
           activities, it is seen by firms as very much a secondary source compared to TECs
           when seeking to understand better what MD is and how it can be progressed within
           their own organisations.

4.12       From the evidence presented by the tracking studies, it would appear that there is
           somewhat of a variation by size of firms in the perception of Mc!' s role in MD.
           Whereas small firms tend to relate to, and use, TECs when using MD, showing
           little knowledge of the MCI, larger firms (and public sector organisations) both
           understand and make more use of the MCI directly.

           T A KE -UPOF M AN AGE ME NT DEVELO PMENT ACT IV IT Y

4.13       Surveys undertaken during the first half of the 1990's reported relatively high rates of
           take-up of MD. In 1992, 51% of respondents were actively using MD, but this level
           has never been repeated. It is important to note that the sample structure and
            definitions of MD used have varied between the earlier and later tracking studies.
            This may account for some of the changes identified by the studies.

4.14        By 1997 the level of MD activity reported by the tracking studies had fallen to
                             lo
           45% (450 firms)      Whilst the private sector reported the largest use of formal MD
           during 1997, the trend in firms' MD activities suggests a general decline in use since
           the 1995 tracking study. However, over the same period the public sector has
           exhibited a growth in the use of MD. This has served to partly offset the trend in
           the private sector.

4.15       In contrast to the tracking studies, the OU study found within the same firm a
           significant increase in the level of MD being undertaken when compared to ten years
           ago and also a broadening of use of MD. This is reported for all sizes of firm and
           across all sectors. Moreover, when asked about future levels of MD, significant
           numbers of respondents believed that increases would be very likely.

4.16       According to the OU work, the average number of days taken up by MD activity per
           manager varies between 4.6 days (small firms) and 6.4 days (firms with 1000 plus
           employees). Although this appears to be of the same broad magnitude, the level of
           time commitment in the largest firms is some 50% greater than in small firms. In all
           cases, public sector bodies tend to undertake slightly more MD training per manager
           than their private sector counterparts.

10
     We do not believe that the fall is necessarily statistically significant.
_A _ R_e   __

4.17       The contrasting picture presented by the OU study is, in part, due to the wider aud
           more general definition of mauagement development adopted.                The studies
           commissioned by MCr focus on the use of specific products - often only those with
           which the MCr is involved - aud report a declining trend in the use of some of these.

4.18       There also appears to be evidence of a substautial amount of (often more subtle) in­
           house mauagement training being undertaken in UK firms. As such, this may not be
           uncovered by questions on formal methods - such as those within the tracking studies.
           Thus, the absolute level of MD activity is often likely to be higher thau reported.

4.19       It is also notable that the OU study reports the take-up of MD by mauufacturing aud
           service sector firms to be roughly equal. This contrasts with other studies that suggest
           a bias towards greater use in service sector orgauisations.

           FO RM OF M AN AGEM ENT DEVELOPM ENT USED

4.20       MD undertaken by firms cau take a multitude of forms. A reasonable way of
           classifying the use of MD is by considering formal aud informal methods separately.
           Activities undertaken formally are set out aud planned for within a compauy's
           business planning process or au individual's training programme. Those activities
           which take place informally or in au ad hoc manner - such as the learning of new
           methods from conversations aud shared learning experiences with other mauagement
           staff (inside aud outside of the firm) - are distinctly different from the formal
                    ll
           methods .

4.21       According to the 1997 tracking study, individual training aud development plaus are
           used by three quarters of the 45% of firms reporting use of formal MD methods (i.e.
           340 firms). All other formal methods of MD identified have declined in popularity
           since 1995, with the use of MD in the induction process suffering the most significaut
           decline. This might reflect the increasing use of internalised, tailored, MD tools by
           firms, often regarded by mauagers as part of a wider organisational process rather thau
           a formal mechauism in their own rightl2.

II   Although often informal learning takes place whilst managers are undertaking formal MD activity - short
courses, conferences, etc.
12
     MD tools used as part of an annual salary and promotion review, or as part of a self-assessment process for
example. Many of these would, in fact, be accounted for in the three quarters affirms using MD as part of
individual training programmes.
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4.22       The use of management standards remains a central focus of many firms MD
           activities. From the 1995 and 1996 tracking studies, the MCI was the single most
           important contributor of information for those firms using management standards 13
           Three quarters of firms had used material sourced from MCI during 1996. However,
           this had declined to a third of firms in 1997. The increasing market penetration of
           a broad range of organisations account for the fall off in the MCl's popularity -
           with the Institute of Management and Business Schools increasing their share of the
           MD qualifications market significantly over the time period.

4.23       The tracking studies report that the total number of respondents using, or planning to
           use, a management standards framework has increased.             In 1996, 82 (8%)
           organisations were using a standards framework as part of their approach to MD,
           rising almost two-fold to 150 organisations (15% of the sample) in 1997. Although
           low in absolute terms, the trend is increasing.

           T A KE -UPO F SPE CIFIC MCI PRO DUC TS

4.24       The degree of penetration of specific MCI products was investigated by the tracking
           studies. The products that tend to be used most differ between years as the focus of
           MCI efforts have changed and new products have been developed. In 1997, the most
           recognised and used MCI product was the personal competence model. Half of firms
           had used or referred to this, with a similar proportion making use of the Management
           Standards Directory and the Good Managers Guide. Only those products released for
           the first time in 1997 displayed a relatively low rate of and penetration in the
           marketplace.

4.25       The reason for the growth in MD was also investigated. From this avenue of inquiry
           it appears that the most popular reason for the use of MD was the parallel adoption
           of the Investors in People process within firms. This would also agree with the
           correlation between firms who are more active in HRD terms and the take-up and
           scale of MD activity.

4.26       The causal link between liP and MD activity has not been tested - i.e. whether firms
           first become involved in liP and subsequently use MD or whether exposure to MD
           opens the firm up to the liP process and indeed, other HRD initiatives/programmes.
           Given the current focus of many TECs on promoting IiP to firms, and the lack of TEC
           funding streams for MD, it is highly likely that causation runs from IiP to MD.

13   This information is only available within the 1996 and 1997 studies.
_A _ R__
             ev_ w__
                   of_ M
                       __

       OBS T A CLE S TO T A KE -UP OF M AN AGE MENT DE VE LOP MENT

4.27   Reasons for the apparent decline in use of MD were examined by the MCI tracking
       studies. In the 1995/6 studies, the main reasons given for not using formal MD
       methods was that management training was either "not needed" or was "not practical
       to implement". By 1997 the most popular reason provided was that "staff already had
       sufficient training".

4.28   What is clear from the work of the tracking studies is that the cost and/or time
       involved in implementing MD is not seen as a major obstacle by many of those not
       choosing to participate. In 1995, only 16% of those without a formal MD programme
       stated that time/cost constraints were stopping them from undertaking such a
       programme. This has remained fairly constant in subsequent studies.

4.29   A number of variables were tested within the SQW work for their degree of fit with
       decisions to undertake MD activity - thus enabling assessment of potential obstacles
       to adoption of MD in SMEs. Of these, the most relevant were found to be internal
       influences such as the attitude of the firm to human resource development issues.
       Those firms with a formalised internal MD strategy were among the highest
       users                                    of                                    MD .
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                                                                                 __________________
                                                                                                                  25

5.         IMPACT OF MANAGEMENT DEVELOPMENT ON EMPLOYERS

           BUS INESS BENEFIT S

5.1        The perceived benefits of using MD were investigated by the tracking studies. In all
           cases the most commonly cited benefit was that MD can assist in increasing
           efficiency and productivity. Over half (52%) of all firms questioned believed this to
                                14
           be the case in 1995      However, the causal mechanism between MD and bottom line
           business profits is less readily understood or believed by firms. Indeed, the three
           tracking studies are consistent in finding a relatively small proportion of firms
           responding that MD could lead to increased profits (18% and 19% in 1995 and 1996
           respectively, falling to 8% in 1997).

5.2        Whilst not providing quantitative results on the impacts of MD in SMEs, the results of
           the SQW work (covering 39 firms) are useful in assessing where impacts might be
           expected to occur, and how firms might be able to maximise the benefits available
           from MD. The key results of the SQW work were that:

           •        no single factor can explain the different impacts created in, and. the relative
                    experiences of, firms in the sample

           •        SMEs in the upper size band (i.e. 50 to 100 employees) appear to be able to
                    capture the benefits of MD more readily;

           •        whether this finding reflects actual experience, or whether it is due to the
                    firm's ability to observe and measure changes in business activity is unclear

           •        firms displaying average rates of growth appear less able to benefit from MD
                    than those on low/no growth or very high growth trajectories (i.e. this may
                    also support the view that these "satisficing firms" have less interest in MD)

           •        MD activity focused on training employees from similar working
                    environments (type of firm or job type) appears more successful than delivery
                    to an audience drawn from a range of firms or types of job

           •        firms that exhibited the highest levels of impact appeared to be those which
                    embraced the need for change in response to fluctuations in their business
                    environment

14   Although still the most prominent identified benefit, the proportion of filmS highlighting improvements of
this type feU to 35% of the sample in 1997.
A_ R_
           _

           •        those finns with relatively more integrated human resource development
                    strategies appeared to benefit from the highest level of impact of MD.

5.3        A limited number of observations can be made with relevance to the MCI
           Competitiveness Programme. The SQW research found that one (of three) of the
           characteristics of finns which experienced little beneficial impact from MD was
           information failure. SMEs often have little or no infonnation on the benefits of MD
           or the products and services available in the marketplace, and are often therefore
           unable to access the right type of development and training products for their
           particular businesses.

5.4        The Mcr is only one of many organisations that could affect this situation. However,
           increasing flows of infonnation to SMEs is of utmost importance. The real problem is
           that providing useful infonnation to SMEs is notoriously difficult. It is not enough to
           rely on increasing the general flow of infonnation into the market - indeed this may
           make matters worse through an "infonnation overwhelming" effect. Narrowly
           focused sector or issue-specific campaigns are more likely to attract SMEs in higher
           numbers than relying on the release of generalised infonnation.

5.5        When addressing MD in the SME community, it is clear that the context within which
           finns operate is important. The context of the firm and the market it works within has
           a significant bearing on the ultimate scale of take-up of, and the impacts resulting
           from, training. The SQW report concludes that success in the use of MD in SMEs can
           only be ensured if the form of training is flexible enough to the needs of the
           organisation, undertaken in a wider culture of human resource development and is
           delivered to finns that embrace the need for change.

5.6        The OU study of 600 finns explored the generalised perceptions of the impact of
           formal and informal MD activity, by asking firms to indicate on a scale of I 10               -

           where the finn stood following a MD programme. The results therefore need to be
           considered carefully in light of their inevitable sUbjectivity . Only one respondent
           from each finn was asked to provide the indication of impact, and very few
           companies had a formalised MD impact monitoring process for these individuals to
                     l5
           draw upon

5.7        Smaller firms, those with fewer than 100 employees, were asked about the degree to
           which they thought MD had been successful. In general, two thirds of the firms felt
           that MD had been worthwhile. Beyond this, the scale and nature of impacts was not
           investigated.

J5   The lack of an adequate system for evaluating the impacts of MD was found even in those firms who were
chosen by the study team for case study material.
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5.8    The perceived extent of impacts was only investigated with firms employing more
       than 100 staff. Overall, few companies perceived there to be low or no impact from
       the MD training undertaken. Only 16% of firms felt that the impact had been in the 1
       - 4 categories (low impact). In contrast, most firms were positive about the scale of
       impact, with half (49%) reporting impacts between 7 and 10 on the 1O-point scale.
       Furthermore, this high degree of perceived impact was found to exist across firms of
       all sizes.

5.9    A range of potential explanatory factors for high impact MD activities were tested by
       the OU study through regression analysis. This suggested that internal factors are
       much more significantly correlated with beneficial impacts from MD than
       external factors. Among these internal factors, the most significant (ranked by order)
       were:

       •       a high priority placed on MD by the firm

       •       the quantity of formal training undertaken

       •        positive commitments within the firm of the organisations responsibility for
                individual managers development.

5.10   The conclusion is that MD is successful where it occurs in a 'sympathetic'
       environment - particularly within a firm with a well defined commitment to human
       resource development in general.
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          ev_ w__     C_                 D_

6.    KEY FINDING S AND CONCLUSIONS

      KE Y FINDINGS

      Evaluation Quality and Coverage

6.1   The studies reviewed have raised a range of issues in the design, promotion and
      delivery of MD. However, the coverage, consistency and, more importantly, the
      quality of the evaluation work reviewed so far has differed significantly.

6.2   On the one hand, the SQW and OU studies have assessed the current position of MD
      activities in the UK by focusing on specific types of firm. The OU study covered in
      excess of 600 firms of different size and sector. The analysis undertaken by size of
      firm differs between the panels chosen for study in light of the different issues faced
      in general by small and large firms. In a similar manner, the SQW research has
      focused exclusively on SMEs, although these were further broken down into two size
      bands for analysis.

6.3   The tracking studies, although covering 1,000 firms in each year, present problems in
      interpretation of their findings due to changes to the underlying survey instruments
      used. The very different conclusions on the take-up of MD in the tracking studies
      compared to the OU work reflect these changes and different definitions of MD.

6.4   The studies of TEC and Business School experience with MD have delivered more
      specific findings, with a subsequently limited degree of general evidence being
      available with which to compare other studies' findings.

      MCI and Intermediary Organisations

6.5   MCI has made a favourable impression with TEC and Business Link MD co­
      ordinators in terms of both quality of materials and advice and level of service from
      the regional advisors.

6.6   However, amongst TEC staff in general (rather than MD co-ordinators), awareness of
      the MC! is lower. Moreover, there is a risk of over-dependence on one individual
      within the TEC or Business Link to disseminate the MCI's work. Staff movements
      can potentially lead to a significant and rapid reduction in the overall level of
      awareness of the MCI within the intermediary organisation.
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