Changes in the Global Business Environment - Research Paper Example

1. Introduction Changes in the global business environment involve not only changes in the character of organizations in the contemporary period, but it also involves changes in the vital role and status of workers in the firm (Mosier, 1986; Swanson & Sleezer, 1989). It is now recognized that the “development and systematic use of the skills and knowledge of employees” (Ramirez, Guy & Beale 2007, p. 496) is essential for the survival of the corporation in the competitive global market (Wood & De Menezes, 2008). In this regard, training and development of workers and managers aim towards achieving an increase in productivity and add value to the products and services that the organization provides (Mosier, 1986). In this context, corporation invests on the training and development of workers and managers. However, when organizations undertake investments, it is with the idea that there will be a positive return of investments (Kahnemann & Riepe, 1998). As such, training is tied up with the financial and profit making-goals of the organization, thus, requiring a strong foundation for the decision to invest in the training and development programs of workers and managers. In this regard, training and development are evaluated in terms of costs and benefits that will accrue to the organization because of the investment. However, as training and development are investments of the organization necessary for its survival, the need to understand the relationship and interaction of the training programs vis-à-vis its financial repercussions for the company become essential not only for the development of training programs, but also on the financial decision-making necessary for the implementation of the training. 2. Literature Review As the need for more experienced managers in all the departments of the firm increases, significant monetary investments are incurred by the organization in terms of recruitment, selection and training (Mosier, 1986). This fact highlights two critical elements required in understanding the contemporary condition of workers and managers. First, in the real world, the truism that all systems are improvable (Drury, 2005). Second, it is the reality that things changes overtime. As such, there is a need to respond to the demands made by changes (Drury, 2005). In this view, training and development programs for managers become not only as a tool for the economic survival of the company but also a necessity in itself in order to handle the demands of the global market (Ramirez et al., 2007). 2.1 The Current Context Training and development of workers and managers contribute to the productivity and profitability of the organization (Mosier, 1986; Swanson & Sleezer, 1998). However, training programs entail costs. In this regard, there is a need to come up with a positive framework that will enable decision-makers in coming up with valid reasons for the implementation of the training programs (Heckmann, 2000). This scenario presents the fact that training programs are not arbitrarily taken by the organization, but are pursued due to the following reasons. First, managers that are more skilled are more economically efficient (Heckmann, 2000). Second, experienced managers are more motivated and engaged in creating a workplace environment that will promote learning and development for the employees (Nahrgang, Morgeson & Hofmann, 2011). This is important since through the leadership of the skilled managers; the workers align their goals and objectives with the goals and objectives of the company, thus, enabling growth for both the employees and the company (Wolfgang & Brewster, 2005). Third, training and development of managers are key facets of contemporary organizations (Swanson & Sleezer, 1998). Fourth, managers that are more skilled are more focused in performing their tasks and are not affected by irrelevant factors such as gender, physical appearance and age in the accomplishment of the function (Weiss & Shanteau, 2003). Finally, fifth, the productivity of more skilled workers and managers contribute to increasing national productivity, which is vital in sustaining the economy (Mosier, 1986). Acknowledging the legitimacy of the need for training and development, several scholars have come up with a methodology that will allow decision-makers in coming up with a costs-benefit ratio in further justifying the training (Mosier, 1986; Swanson & Sleezer, 1998; Heckmann, 2000; Nahrgang et al., 2011). 2.2 The Approach: Benefit Forecasting Method Swanson and Sleezer (1998) discussed the benefit forecasting method (BFM) as a financial analysis strategy that will enable decision-makers in coming up with sound economic reasons for undertaking training and development programs. The method is consisted of three parts. The first part is determining the program options while the second part is made up of identifying the costs and the expected performance value for each option. Finally, the third part is the comparison of each option to determine which option is the most financially rewarding for the organization (Swanson & Sleezer, 1998). This method has been used to validate employee trainings and justify decisions pertinent to organizational development programs. 2.3. The Concern Although BFM provides a solid foundation for financial analysis of training programs, it focuses solely on the costs-benefit ratio of such programs. It does not incorporate other possibilities such as training programs as a company’s CSR enhances productivity and profitability. It reduces training to financial discourse, which overlooks the importance of the human capital per se. Finally, it does not provide a choice for how human capital and financial resources be combined in such a way that integrity of the managers is sustained and not diminished into tools for organizational profit. 2.4 Summary Training and development of managers is essential for the survival of modern organizations. In this regard, a credible financial analysis is required as the implementation of programs entail costs. Benefit forecasting method is one of the methods developed to help decision makers conduct a financial analysis for training programs. However, it has been observed that there are certain limitations in the method, which if addressed, can further strengthen BFM. 3. Research Objectives and Questions 3.1 Objectives 1. To identify the factors that necessitate for the implementation of training and development programs for managers. 2. To know and understand benefit forecasting method as an approach that provides a thorough financial analysis for training programs 3. To determine other factors that may further amplify and enhance BFM in justifying training 3.2 Questions 1. What are the elements that have paved for the necessity of implementing training and development programs for managers? 2. How does benefit forecasting method provide a valid financial analysis for the implementation of training programs? 3. How can BFM be further amplified as it responds to the condition and demands of the contemporary global market? 4. Research Design and Methodology In order to attain the objectives of the research and address its questions, the research will be employing the mixed methodology of quantitative and qualitative research. This will be undertaken in order to get a more comprehensive response to the questions of the paper. The research will be conducted in three phases. The first phase is the library research, which will primarily deal with the search academic articles written regarding the topic of the research. The second phase will be distribution of the questionnaire for the quantitative research. Finally, the third phase will be the interview of 2-4 senior managers who have experienced concerns similar with the subject of the research. 5. References Drury, CG 2005, ‘Establishing a human factors/ergonomics program’. Retrieved at http://hfskyway.faa.gov/HFAMI/lpext.dll/FAA%20Research%201989%20-%202002/I. Accessed on 27 April 2011. Heckman, JJ 2000, ‘Policies to foster human capital’, Research in Economics, vol. 50, pp. 3 – 56. Kahneman, D & Riepe, MW Summer 1998, ‘Aspects of investor psychology: Beliefs, preferences and biases investment advisors should know about’, The Journal of Portfolio Management, pp. 52 – 65. Mosier, NR 1986, Financial analysis: A review of the methods and their application to employee training (Project No 9), St Paul: University of Minnesota, Training and Development Research Center. Nahrgang, JD, Morgeson, FP & Hofmann, DA 2011, ‘Safety at work: A meta-analytic investigation of the link between job demands, job resources, burnout, engagement, and safety outcomes’, Journal of Applied Psychology, vol. 96, no 1, pp. 71 – 94. Ramirez, M., Guy, F., & Beale, D. 2007, ‘Contested resources: Unions, employers and the adoption of new work practices in US and UK telecommunications’, British Journal of International Relations, 45: 3, pp 495 – 517. Swanson, RA, & Sleezer, CM 1989, ‘Determining financial benefits of an organizational development program’, Performance, Improvement Quarterly, vol. 2, no 1, pp. 55 – 65. Weiss, DJ & Shanteau, J 2003, ‘Empirical assessment of expertise’, Human Factors: The Journal of Human Factors and Ergonomics Society, vol. 45, no 1, pp. 104 – 116. Wood, S., & de Menezes, L.M. 2008, ‘Comparing perspectives on high involvement management and organizational performance across the British economy’, The International Journal of Human Resource Management, Vol. 19, No 4, pp. 639 – 682. 6. Appendices: Timescale: Weeks 1 - 4 Collection of secondary materials Week 5 Preparation of questionnaire Week 6 Dissemination of questionnaire Preparation for the interview Week 7 Conduct interview Week 8 -12 Writing of the dissertation Read More