Management Development Programme - A Review of MCI and the DTZ Pieda Consulting
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A Review of MCI and the Management Development Programme DTZ Pieda Consulting D... .. "bB.nt for RESEARCH REPORT RR67 EducatIoII ..... Empl.,ment
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. •• . . • . .. . Fi��f�g� . >?I . ( . ......... •• ••· •. • . . •• • i i . • . ... . •••• • • •• fl'eyi�,�s,:�_. �.�_g. e_fu�q_t(Il��I.(,:p��nt.'��ielYs:
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. . F,gureZ;1 . .. . .. . . . . KeyPerf�rm��ce Indicat�r$()VIq Business plan) . . . 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.
A R �� ��_ie___ __ I_ w o f_M C_a_ h e_Man_�a n d t_ __ __ g�em en_t_D_e_ __ v_ lo�p_ e_ m_en_t_ o� P_r_ 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
�A �R�e he_M__ t_ d__ e_ an_�a �m_en_t_D v_ _e_ e_ m_ lo�p_ en_t_P_r_ o� 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.
ev_ w__ _A_ R__ of_ 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.
�A �R�e� � n�d� C�I� � he�M t� � e� � an�a�g� � �e_ en v_ lo� e_ pm en_t_ __ og P_r_ a_ �r_ m_m_e_. __________________ 14 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.
.::: A:..: R i .:::ew.:::o.::.f.::. .:::e:.:.v.::: :..:I 3.:::n.::: d.::.t::. h __ ..:: __ 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.
�A� R=e�v=i =M ==C= e_ an_ �g� __ 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.
�A� R�e�v� �C�I� g� �n=a =a�eme � n= ��or g �r_ 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.
�A� R�e�v� M� ie�w�o�f� I� C�a�nd � th_ g� �emen_ __ p men_ __ 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 .
�A�R� ev�ie�w�o� fM�C� I� a=n= d� M== th=e= na�g� a= e� men=t=D v= �e= lo� e� me p=== gr_ n t=P_ � ' __________________ 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.
� A�R� �e v�ie �w�o f�M � C �I� a=n= d�he=M t= �an=a�g�m= e=e= =e=v� nt=D e= lo� p= nt=P== e= m= g r_ r o� 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.
�A�R� o f_M__ 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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