VET and related isues in an SME context: national and international perspectives 0861767640

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Education + Training Volume 44, Number 8/9, 2002

ISSN 0040-0912

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VET and related isues in an SME context: national and international perspectives Guest Editor: Harry Matlay

Contents 350 Access to Education + Training online 351 Abstracts & keywords 354 Guest editorial 357 Training and HRD strategies in family and non-family owned small businesses: a comparative approach Harry Matlay

413 Towards a healthy high street: identifying skills needs in small independent retailers John Byrom, Cathy Parker and John Harris 421 Entrepreneurship education and training in Canada: a critical assessment A.B. Ibrahim and K. Soufani

370 Engaging SME managers and employees in training: lessons from an evaluation of the ESF Objective 4 Programme in Great Britain David Devins and Steve Johnson

431 Developing managerial skills in Palestine Mohammed Al-Madhoun and Farhad Analoui

378 Innovation and education policy in SMEs: a Czech perspective Lester Lloyd-Reason, Karel Muller and Stuart Wall

443 The determinants of training in SMEs in Northern Ireland Renee S. Reid and Richard I.D. Harris

388 Do they or don’t they? A comparison of traditional and discourse perspectives of HRD in SMEs Clare Rigg and Kiran Trehan 398 Entrepreneurship education at university: a driver in the creation of high growth firms? Laura Galloway and Wendy Brown 406 Defining the development needs of entrepreneurs in SMEs John Davies, Mick Hides and James Powell

451 Strategic HRM for SMEs: implications for firms and policy Maryse J. Brand and Erik H. Bax 464 UK news 467 European news 468 Reviews 469 Career resource 470 Events diary 471 Acknowledgement 472 Note from the publisher 473 Author and title index to volume 44, 2002

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variety of training interventions on human resource (HR) practices and business performance in Great Britain. The paper investigates the extent to which targeting such interventions on the managers of SMEs affects the impact and the likelihood of changes in HR practices but finds no statistically significant relationship. The research findings suggest that whilst training interventions have positively contributed to the establishment of HR practices and are perceived by SME managers to have met the needs of the organisation, their impact on a range of business performance indicators is fairly modest. Furthermore the research identifies the propensity of SMEs who are currently engaged in training to become involved in these interventions whilst the majority of SMEs who are not engaged in external training activities remain untouched by the policy intervention.

Abstracts & keywords

Training and HRD strategies in family and non-family owned small businesses: a comparative approach

Innovation and education policy in SMEs: a Czech perspective

Harry Matlay Training, Human resource development, Competitive strategy, Small firms, United Kingdom

Lester Lloyd-Reason, Karel Muller and Stuart Wall

Family-owned small businesses constitute a large proportion of the overall small business population of industrially developed and developing countries. A great deal of theoretical and practical knowledge exists on various aspects of small business growth and development, including: management, marketing, finance, production, research and development. There exists, however, a paucity of comparative research on the training and HRD strategies of small family and non-family businesses. This article sets out to redress this imbalance in current small business research. It outlines the preliminary results of a recent study that focused on the training and HRD needs of a randomly selected sample of 6,000 small businesses in Great Britain. The data shows that there are considerable differences in owner/ manager attitudes and approaches towards the training needs of family members employed in a business as compared to non-family employees. The results suggest that these differences could have a significant influence upon the competitive strategies of family and non-family owned small businesses in the UK. Engaging SME managers and employees in training: lessons from an evaluation of the ESF Objective 4 Programme in Great Britain David Devins and Steve Johnson Keywords Training, Human resource management, Small- to medium-sized enterprises, United Kingdom This paper draws on a telephone survey of 116 independent SMEs to explore the impact of a Education + Training Volume 44 . Number 8/9 . 2002 . Abstracts & keywords # MCB UP Limited . ISSN 0040-0912

Keywords Education, Training, Knowledge workers, Innovation, Small- to medium-sized enterprises, Czech Republic After considering the various dimensions of innovation policy, this paper reviews the experiences of the Czech Republic (CR) in implementing such policies in the post-1990 transition period. Particular attention is paid to the contribution of small and medium-sized enterprises (SMEs) in innovation activities and to the various direct and indirect measures used by the CR in their support. The paper also focuses on the education and training issues and policy prescriptions deemed most appropriate to medium-term goal setting in the CR. It is noted that in order for such education and training policies to be effective, they must be informed by a number of well-established patterns and trends within globalised, knowledge-based economies as well as by the particular circumstances faced by the CR or other transition economies. Do they or don’t they? A comparison of traditional and discourse perspectives of HRD in SMEs Clare Rigg and Kiran Trehan Keywords Human resource development, Management, Training, Learning, Small- to medium-sized enterprises Understanding of HRD in SMEs has frequently been based on impoverished research resulting from underdeveloped theory. This article argues for the potential offered to researching, understanding and practising HRD in small organisations, of taking a discourse perspective on organisation, learning and development. Through a comparative interpretation, from a traditional and a discourse perspective on HRD, of research material collected ethnographically in three small companies, the article aims to contribute to an

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approach which can deepen understanding of HRD in SMEs by combining three strands that have not generally been integrated: ideas from recent debates on what HRD comprises, perspectives on learning, and a discourse perspective on organisation. The implications for research indicate a need for methods that enable the study of HRD in action – the micro-processes of development.

for this support is the definition of the development needs of entrepreneurs in SMEs.

Entrepreneurship education at university: a driver in the creation of high growth firms? Laura Galloway and Wendy Brown Keywords Universities, Education, Entrepreneurialism, Growth, Small- to medium-sized enterprises, United Kingdom There is, in the UK, increasing attention being paid to the potential of university education to facilitate high quality growth firms. While some commentators believe that this potential can be realised in the short term, many believe that only a long-term view of the entrepreneurial potential of graduate entrepreneurship is feasible as new graduates lack the resources, skills and experience necessary for sustainability and growth of ventures. Like most university entrepreneurship ‘‘departments’’, the Hunter Centre for Entrepreneurship at the University of Strathclyde examines the profile of students and outcome of entrepreneurship electives in terms of student ambition and motivation. Using data from this exercise along with data from a study of 2,000 Strathclyde alumni, an impression of potentiality and actual outcome of entrepreneurship electives is possible. Defining the development needs of entrepreneurs in SMEs John Davies, Mick Hides and James Powell Keywords Entrepreneurs, Development, Small- to medium-sized enterprises, Higher education, United Kingdom This paper focuses on the theme of entrepreneurship education, learning and development and specifically, on the challenge for higher education institutions (HEIs) of supporting entrepreneurial and enterprising individuals and organisations. This is examined from the perspective of the definition of appropriate development needs of entrepreneurs in small- and medium-sized enterprises (SMEs). HEIs are undergoing a phenomenal amount of change driven by the various stakeholders (e.g. government, students and local committees). The government continues to emphasise the importance to the economy of the set up and development of SMEs. If this is to happen then SMEs will need support in developing entrepreneurial and enterprising individuals. This convergence of needs presents the opportunity for HEIs to contribute to this support. A prerequisite

Towards a healthy high street: identifying skills needs in small independent retailers John Byrom, Cathy Parker and John Harris Keywords Training, Skills, Retail trade, Small firms, United Kingdom This paper details work undertaken to identify and assess the skills needs of small, especially foodrelated, independent retailers in the United Kingdom. The paper, part of a European Social Fund (ESF) assisted project: ‘‘Towards a healthy high street (II)’’, considers the specific skills areas deemed to be lacking at present in the sector. From this, higher-level learning materials will be developed which relate to the skills areas identified. The prime source of evidence for skills needs identification draws upon research undertaken as part of two previous ESF projects. The key aim of this paper is to combine and articulate the findings from this earlier ESF research with material published by practitioners, academics and government pertaining to the provision of training in this vital sector of the economy. Three key areas upon which to focus training in the sector are explored: ‘‘Building and sustaining competitive advantage’’, ‘‘E-commerce’’ and ‘‘Retail operations’’. Entrepreneurship education and training in Canada: a critical assessment A.B. Ibrahim and K. Soufani Keywords Entrepreneurialism, Education, Training, Small firms, Management, Canada Management training is constantly seen as an effective way of providing small-medium size enterprises with the management expertise they require in order to develop and grow. The SME sector in Canada plays a prominent and essential role in the growth and expansion of the domestic economy through its contribution to the domestic output and job creation. However, this sector suffers from a considerably high failure rate that is largely attributed to the lack of management skills and planning, which can potentially be improved by providing training and education in different business areas. This paper assesses the entrepreneurship education and training efforts in Canada and identifies the common challenges that face this process. Developing managerial skills in Palestine Mohammed Al-Madhoun and Farhad Analoui Keywords Training, Management, Development, Small- to medium-sized enterprises, Palestine This paper assesses the contribution of management training and development programmes (MTPs) to the development of managerial skills in small and medium enterprises (SMEs). Different sets of variables were used to explore the managers’ skills development by

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dividing the managerial skills into three main categories: self, people, and task-related skills. After the peace agreement, many training programmes were established in the Palestinian Territories in order to solve managerial weakness, and these almost always use off-the-job training. A combination of survey questionnaire and interviews were used to collect the primary data (field study). The target respondents for this first time study were the managers of SMEs who participated in the MT courses. The results of the study highlighted the presence of clusters of managerial skills for SME managers and supported the evidence in the literature suggesting that managerial skills should be analysed as a system of interrelated skills.

characteristics (other than shift working), ownership characteristics and external factors, and even to some extent size, were much less important than expected. What our results do show is that whether the firm is family-owned/managed is a major factor in determining training budgets in SMEs in Northern Ireland.

The determinants of training in SMEs in Northern Ireland Renee S. Reid and Richard I.D. Harris Keywords Family firms, Training, Human resource management, Small- to medium-sized enterprises, Northern Ireland This study looks at SME spending on training in Northern Ireland. We include a range of human resource management functions, as well as workforce characteristics, the external environment, size, and the impact of changes in ownership status as important determinants of training expenditure in SMEs. Particular attention is also paid to the importance of whether the enterprise is family owned and/or managed. Generally, our results show that HR functions do generally matter; however, workforce

Strategic HRM for SMEs: implications for firms and policy Maryse J. Brand and Erik H. Bax Keywords Education, Training, Human resource management, Small- to medium-sized enterprises, The Netherlands This paper is on the growing importance of strategic human resource management (SHRM) for small and medium-sized enterprises (SMEs). Many small firms encounter serious human resource problems, while at the same time these human resources play a vital role in developing and sustaining their competitive advantages. In (S)HRM literature specific issues concerning small firms are rarely addressed. This paper explores this issue further. We conclude that the available knowledge on HRM in small firms is highly descriptive and fragmented. We propose the application of the strategic labour allocation process model (SLAP) as a tool to analyse HRproblems in SMEs. This model focuses on the balance between the supply of and the demand for labour on a firm level. The application of the SLAP model produces two strategic scenarios for Dutch SMEs presently confronted with a tight labour market.

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Guest editorial

About the Guest Editor Harry Matlay is Reader in SME Development within the Business School, University of Central England (UCE), Birmingham, UK. He specialises in training and human resource development. Prior to joining UCE, he worked in senior positions in industry, as an entrepreneur and business consultant, and at Warwick University, UK. He joined the UCE Business School in 1998 and currently contributes to the research activities of the Knowledge Management Centre and the Enterprise Research and Development Centre. He is the Editor of the Journal of Small Business and Enterprise Development.

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Issue 8/9 of this journal is dedicated to education and training issues in small and medium-sized enterprises (SMEs). This is the third in a series of special double issues that comprise articles related exclusively to human resource (HR) topics in smaller units of economic activity. The genesis of the series can be traced back to a constructive conversation that I had with the editor, Dr Richard Holden, at a Vocational Education and Training conference in 1999. After much deliberation, we arrived at the conclusion that education and training issues related to SMEs were under-represented in the specialist literature and that more quality publications were needed to fill the obvious gap in relevant research dissemination. In theory, the solution was a relatively simple one: the creation of a regular Education + Training issue that would be dedicated to this emergent topic. In practice, however, the disparate and often-disjointed specialist research and dissemination proved difficult to locate, commission and even referee. In the event, both the 2000 and 2001 SME oriented double issues of the journal proved very successful and reached a wide and geographically dispersed audience. The 2000 national special issue incorporated the best and the most focused research on the topic of education, training, learning and knowledge management in the SME sector of the British economy (Matlay, 2000). The follow-up, 2001 international special issue included articles on vocational education and training topics related to the SME sectors of Germany, Central and Eastern Europe, Asia, Australia, Taiwan and South Africa (Matlay, 2001). The feedback that we received was overwhelmingly positive and included a wide range of constructive comments, responses and suggestions from policy makers, academics, practitioners, owner/managers and other stakeholders in Britain and the European Community as well as in other industrially developed and developing countries. The third special issue of this journal departs only slightly from the format of the previous two publications. In our drive to further improve the impact of the annual special issue we took on board suggestions that a combined British and overseas approach would give the readership of the journal a comparative and more rounded perspective on both national and international development in this important topic of

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research. We have not, however, compromised on the initial call for high quality, focused and relevant research on education and training aspects in SMEs. The first article outlines the preliminary results of a comparative research study on the training and HRD strategies of small, family and non-family businesses in Britain. It emerges that there are considerable differences in owner/manager attitudes and approaches towards the training needs of family members employed in a business as compared to non-family employees. Such differences are likely to have a significant influence upon the competitive strategies of family and non-family owned small businesses. In the second article, Devins and Johnson explore the impact of a variety of training interventions on HR practices and business performance amongst SMEs in Britain. The authors argue that whilst training interventions have contributed positively to the establishment of HR practices and are perceived by SME managers to have met the needs of the organisation, their impact on a range of business performance indicators is fairly modest. The research also identifies a high propensity of SMEs that are currently engaged in training to also become involved in this type of interventions and that the majority of firms not engaged in external training activities remain relatively untouched by related policy intervention. In the next article, Lloyd-Reason, Muller and Wall consider the various dimensions of training and innovation policies in the Czech Republic during the post-1990 transition period. They focus specifically upon the contribution of SMEs in innovation activities and on the various (direct and indirect) measures that were implemented in their support. In the fourth article, Rigg and Trehan adopt a discourse perspective on learning, training and HRD in SMEs. By using in-depth case study analysis, the authors conclude that although formal HR investment is sometimes undermined by organisational processes that block learning, the involvement of key SME personnel in formal learning represents a significant source of training and HRD in this type of organisation. Galloway and Brown focus their research upon the potential of university education to facilitate high quality growth in SMEs. Concentrating on the experience of the Hunter Centre for Entrepreneurship at the University of Strathclyde, the authors

examine the profile of students and the outcomes of entrepreneurship electives in terms of respondent ambition and motivation to start their own firms. The results show that while entrepreneurial intentions and related actions can differ over time, a minority of respondents intended to start up in business soon after leaving university. Interestingly, however, the majority of university leavers proposed to enter employment first, prior to considering an entrepreneurial career. In the next article Davies, Hides and Powell focus upon entrepreneurship education, learning and development and on the challenge for higher education institutions (HEIs) of supporting entrepreneurial and enterprising individuals and organisations. These issues are examined from the perspective of the definition of appropriate development needs of entrepreneurs in SMEs. In the seventh article Byrom, Parker and Harris set out to identify and assess the skills needs of small, food-related, independent retailers in Britain. They conclude that training in such firms should focus primarily on ‘‘higher-level’’ relevant skills as well as the more generic topics such as health and safety, bookkeeping and customer service. The focus of the Ibrahim and Soufani article is on entrepreneurship education and training in Canada. In common with other industrially developed and developing countries, it appears that the SME sector in Canada suffers from a considerably high failure rate that is largely attributed to the lack of management skills and planning and which could potentially be improved by providing relevant education and training. The authors provide a concise and generalisable model for entrepreneurship education and training in Canada. Al-Madhoun and Analoui assess the contribution of management training programmes (MTPs) to the development of managerial skills in SMEs operating within the Palestinian Territories. It appears that most respondents perceived effectiveness to be a function of self- and task-related categories of managerial skills, rather than the more important, people-related skills. The Reid and Harris article critically assesses the SME spending on training in Northern Ireland. Their results show that relevant HR functions have an important impact on training expenditure in SMEs. Family ownership emerged as a major factor in determining training budgets in SMEs in

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Northern Ireland. The authors found that workforce characteristics and external factors were much less important than they expected. In the final article, Brand and Bax explore the growing importance of strategic human resource management (SHRM) for SMEs in The Netherlands. The authors conclude that, although general support exists for the idea that strategic HRM is relevant for SMEs, the existing literature is both descriptive and fragmented, and contains no guidelines for SMEs and/or institutions that are working with them. They introduce the Strategic Labour Allocation Process model in order to link SMEs’ internal labour supply and demand position to their particular strategies and specific operational environments. This special issue of Education + Training is a celebration of not only the new research agenda for the twenty-first century but also of the growing importance of SME related research in Britain and abroad. The 11

articles included in it reflect the wide variety of research styles, methods and results. I would like to express my gratitude to all those who made possible the publication of this double issue. Particular thanks are due to the contributors, the referees, the Editor, Dr Richard Holden and Paula Fernandez, the managing editor of the journal, for all their hard work, commitment and support. Dr Harry Matlay UCE Business School, Birmingham

References Matlay, H. (2000), ‘‘Vocational education and training in small businesses: setting a research agenda for the twenty-first century’’, Education + Training, Vol. 42 Nos 4/5, pp. 200-1 Matlay, H. (2001), ‘‘Vocational education and training in small businesses: an international perspective’’, Education + Training, Vol. 43 Nos 8/9, pp. 393-4

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Training and HRD strategies in family and non-family owned small businesses: a comparative approach Harry Matlay The author Harry Matlay is a Reader in SME Development at the Enterprise Research and Development Centre, University of Central England Business School, Birmingham, UK Keywords Training, Human resource development, Competitive strategy, Small firms, United Kingdom Abstract Family-owned small businesses constitute a large proportion of the overall small business population of industrially developed and developing countries. A great deal of theoretical and practical knowledge exists on various aspects of small business growth and development, including: management, marketing, finance, production, research and development. There exists, however, a paucity of comparative research on the training and HRD strategies of small family and nonfamily businesses. This article sets out to redress this imbalance in current small business research. It outlines the preliminary results of a recent study that focused on the training and HRD needs of a randomly selected sample of 6,000 small businesses in Great Britain. The data shows that there are considerable differences in owner/manager attitudes and approaches towards the training needs of family members employed in a business as compared to non-family employees. The results suggest that these differences could have a significant influence upon the competitive strategies of family and non-family owned small businesses in the UK. Electronic access The research register for this journal is available at http://www.emeraldinsight.com/researchregisters The current issue and full text archive of this journal is available at http://www.emeraldinsight.com/0040-0912.htm

Education + Training Volume 44 . Number 8/9 . 2002 . pp. 357–369 # MCB UP Limited . ISSN 0040-0912 DOI 10.1108/00400910210449196

Introduction Small businesses are said to make a considerable contribution to the development of the socio-economic and political infrastructure of industrially advanced nations (Matlay, 2002). For example, both in Britain and in the USA, small, family businesses constitute a sizeable proportion of the overall business population (Matlay, 2001; Storey, 1994). Following the surge in academic, practitioner and policy-oriented interest in entrepreneurship and small business development in Britain, there exists an extensive body of general as well as specific knowledge that outlines and analyses the factors that are most likely to influence smallscale economic activity (Carter and JonesEvans, 2000). This wide-ranging body of knowledge, however, appears to focus narrowly upon the issues that classical economic and business theory considers important for small firm growth and development: management, marketing, finance, production, and research and development (Matlay, 1996; Storey, 1994; Goss, 1991). The mainstream approach has left significant gaps in the specialist literature, a shortcoming that requires a more discerning and focused approach to understanding the full impact that small businesses can have upon a nation’s socio-economic and political development. In this context, a great deal is now known about the age, location, managerial structure and marketing orientation of firms operating in this important sector of the UK economy. Much less has been written in relation to the training and human resource development (HRD) needs of small business owner/managers and their workforce (Matlay, 1999). Furthermore, in terms of the interaction between family and small businesses, there exists a marked paucity of relevant and comparable research (Fletcher, 2000). This article aims to redress this imbalance in current small business knowledge. It outlines and analyses the preliminary results of a mixed methodology research study on training and HRD undertaken in a randomly selected sample of 6,000 small businesses. The data shows that there are considerable differences in owner/ manager attitude and approach towards the training needs of family members employed in a business as compared to non-family

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employees. The data would suggest that these differences could significantly influence and differentiate employee development in, and the competitive strategies of, family-owned small businesses.

Training and HRD in small businesses The noticeable paucity of research that focuses specifically upon the training and HRD needs of small business owner/ managers and their employees is neither surprising nor unexpected (Matlay, 1996). It is generally accepted that, until recently, human resource issues in smaller firms have been largely neglected by academic researchers and human resource professionals who have wrongly assumed that the training solutions that apparently benefited larger firms could be successfully adapted to the specific needs of smaller businesses (Matlay, 1999). Holme (1992) argues that in practice, downscaled human resource development (HRD) strategies and large-scale training solutions would prove to be of little use in small businesses. The enormous size, complexity and sectoral diversity that characterises the small businesses sector of the UK economy appears to have hindered concerted efforts to standardise training and HRD strategies and related support systems. The discriminant economic policies of successive governments, which favoured large-scale economic development, have further compounded the academic and professional neglect of this aspect of small business development. As a direct result owner/managers have become increasingly sceptical towards government involvement in their businesses and would prefer to be left to their own devices (Matlay, 1997). Notably, conventional wisdom relating to training promises considerable returns to both employers and their employees (Osowska, 1996). For example, it is often stated that those employers who invest in training can expect to benefit significantly from an increase in employee motivation, job satisfaction and related productivity gains. Furthermore, absenteeism due to sickness and work-related accidents can be reduced considerably, as a result of induction and/or health and safety training (Matlay and Cressy, 1997). Apart from the benefits already mentioned, to the trained employees there

would accrue fringe benefits such as productivity-related pay increments and increased job security (Matlay, 1995). Small business owner/managers often claim to be pressurised by government agencies and private trainers to invest in the training and the development of their workforce. Nevertheless, it appears that the small business sector in Britain has a long-standing reputation for low levels of training and skill formation (Matlay, 1996). A comprehensive literature survey undertaken by the author has failed to identify any focused research on the topic of training and human resource development in small family businesses. This is surprising, considering that a large proportion of small businesses can be defined as family owned (Fletcher, 1997). Even though the importance of training and skill formation in small businesses has belatedly been recognised by academics, practitioners and policy makers alike, a number of related theoretical and practical problems still persist. For example there are considerable definitional problems relating to the size and distribution of small businesses. Furthermore, there appears to be little agreement amongst interested parties in relation to the optimum type, quality and quantity of training needed in smaller firms. The role of the government in the process of targeting and allocating training-related funds as well as the timing and size of related grants has been recently scrutinised and critically appraised by academics, trade unions and small business representatives (see e.g. Matlay, 2000a). The wider debate on the role and impact of government agencies upon vocational education and training (VET) in Britain is far too extensive to be usefully outlined in this article. It should be noted, however, that concerted efforts are being made to improve the flow of relevant funding towards those owner/managers who would benefit most from training-related outcomes. Unfortunately, much of the literature that informs training and HRD policy in Britain is confused, dogmatic or biased. The mass of related information includes large-scale commercial surveys that were commissioned specifically as fact-finding exercises by quasiofficial organisations charged by the government with both the distribution of training funds and their evaluation. Invariably, such surveys endorsed the training

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policy of the day and purported to provide, on the basis of biased and/or unrepresentative samples, ‘‘statistical proof’’ that governmentinspired and controlled initiatives were ‘‘successful’’. On some notable occasions ‘‘resounding success’’ was claimed even before survey data was analysed. Furthermore, none of these statistical data were released for public scrutiny. Although endorsed and publicly supported by New Labour, calls for increased accountability and enhanced transparency of governmentinspired financial support for the small business sector remain unheeded. Until training initiatives aimed at the small business sector can be accurately and independently evaluated, their impact upon the competitiveness of this important sector of the UK economy remains doubtful. In their recent study, Storey and Westhead (1995) undertook a comprehensive evaluation of research on training in the small business sector of the UK economy. The authors’ conclusion on the state of relevant research was devastating: despite concerted efforts, they were unable to ‘‘consistently document methodologically well conducted research’’ (Storey and Westhead, 1995, p. 17). Some academic research on this topic also proved methodologically unreliable and occasionally produced contradictory results (Matlay, 2000b). Two well-known studies are used to illustrate how methodologically differing research can define their own samples and result in apparently contrasting conclusions. The first study, undertaken by CEG (1995, p. 11) concluded that small business owner/ managers and their workforce were poorly trained and exhibited lower skill levels than their larger counterparts. In contrast, Curran et al. (1996, p. 2) demonstrated that although this might hold in some sectors of economic activity, the majority of owner/managers in their research sample provided training and regularly upgraded the skill base of their workforce. Westhead and Storey (1997) claimed that the provision of training in small businesses varied significantly across the size distribution of a research sample. In their experience, training in small firms was more likely to be provided internally, in order to convey informal work skills. In contrast, the training function in larger firms relied mostly upon external provision and validation and usually led to formal qualifications. Thus, it would appear that ‘‘quality of training’’

represents the key measure of its provision and that individuals working in small firms are less likely to receive formal, externally provided training than those employed in larger organisations. Matlay (1997) has identified the existence of a potential training paradox in the small business sector of the UK economy. It appears that although owner/managers’ attitudes to training were largely positive, actual provision rates failed significantly to keep pace with the skill needs of their workforce. A number of directly and indirectly relevant factors are said to contribute to this paradoxical situation (Matlay, 1997, p. 585). Directly relevant factors mentioned by the respondents included market positioning of a business, prevailing economic conditions and the availability of relevant training. Indirectly relevant factors involved time constraints, cost of training, lack of trainee cover and inhouse trainers as well as issues related to employee interst and motivation. A number of tentative policy recommendations emerged from this study (Matlay, 1998). First, it was suggested that the overall quantity, quality and availability of training should be improved to at least a level commeasurable with that provided by the UK’s main competitors. Second, a programme of selective financial support should be initiated and adequate funds be made available through a more efficient and equitable infrastructure. Third, both higher education and the training industry should offer a wider range of economically priced and customised training, narrowly focused upon the specific needs of small businesses. To date, however, none of these recommendations has been implemented and the skill shortages affecting the small business sector of the UK economy remain critically high (Matlay, 2000b).

Research sample and methodology In the conclusion to their seminal study on training in small businesses, Westhead and Storey (1997, p. 30) highlighted a number of significant issues and important guidelines for future research in this crucial sector of the UK economy. In their experience, this topic of research exhibited an obvious lack of empirically rigorous research and longitudinal studies that could evaluate the long-term

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benefits of training provision in small firms. Furthermore, few research studies used control groups in order to compare and contrast training outcomes or the effect of non-provision in closely matched small firms. The authors advocated the use of sophisticated statistical techniques to establish the direction and strength of causal links between training provision and sustainable competitive advantage. It should be noted that although similar conclusions were reached by other authors active in the field of training and human resource development (Cosh et al., 1998; Hendry et al., 1995; Matlay, 1994) some researchers showed a marked preference for in-depth, qualitative studies (Curran et al., 1996). In general, empirically rigorous and wellconducted quantitative and qualitative research studies tend to complement rather than contradict each other’s findings (Matlay, 2000a). The research study upon which this article is based was designed to combine, over a three-year period (1998-2000), three investigative and analytical approaches. First, it involved an exploratory telephone survey of 6,000 respondents who were randomly selected from the Yellow Pages Business Database of Great Britain. The telephone survey, which aimed to collect quantitative data on the personal and organisational characteristics of owner/managers and their businesses, achieved a response rate of 88 percent. Second, a focused sub-sample of 600 small businesses were identified for a closely matched comparison of respondents from a wide variety of personal backgrounds, such as: age, gender, ethnic origin, educational achievements as well as organisational characteristics that included, amongst others, size, location, market orientation and economic activity. These in-depth interviews solicited qualitative data that allowed a comparative analysis of both training and non-training small businesses. Third, 120 case studies were conducted in order to gather longitudinal data on yearly changes in the human resource and competitive needs and strategies adopted by the owner-managers in the sample. A rigorous approach to data collection and analysis has facilitated the triangulation of the overall results that emerged from this research study and the postulation of a number of pertinent policy recommendations.

Size distribution and composition of the research sample The exploratory telephone survey, which was carried out between January and September 1998, involved a research sample of 6,000 respondents randomly selected from the Yellow Pages Business Database of Great Britain (Table I). The quantitative survey achieved an overall response rate of 88 percent. Those respondents who declined to be interviewed (12 percent) cited time constraints (7.2 percent), too many requests from researchers (4.1 percent) and other factors (0.7 percent) as reasons for their unwillingness to participate in the study. No further efforts were made to contact or interview these owner/managers. The quantitative sample of 6,000 participating organisations comprised 2,129 respondents operating in the manufacturing sector and 3,871 from services. In order to provide a rigorous basis for longitudinal analysis and comparison, the official European Commission (1996) size definition was adopted and strictly observed throughout the study. Numerically, service businesses (64.52 percent) outnumbered manufacturing units (35.48 percent), a growing trend that seems to be characteristic of the UK economy as a whole. Furthermore, micro-businesses (89.17 percent) and small businesses (7.93 percent) dominated the research sample (97.10 percent). In the case of micro-businesses, 1,872 were operating in manufacturing (31.2 percent) and 3,478 in services (57.97 percent). A similar distribution was observable in small businesses, amongst which 193 were manufacturing (3.22 percent) firms and 283 were providing services (4.72 percent). Medium-sized businesses (2.33 percent) were represented by 51 manufacturing (0.85 percent) and 89 service (1.48 percent) organisations. The research sample also included 34 large organisations (0.57 percent) of which 13 operated in the Table I Size distribution and composition of the research sample (n = 6,000) Size band

Size definition

A B C D

Micro-business Small business Medium-sized Large business

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Number of employees

Manufacturing (n = 2,129)

Services (n = 3,871)

1-10 11-49 50-250 251+

1,872 193 51 13

3,478 283 89 21

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manufacturing sector (0.22 percent) and 21 in services (0.35 percent). The size distribution and composition of the research sample appears to closely reflect that of the contemporary UK economy.

Small family businesses in the UK economy In a recent study, Westhead and Cowling (1997) found that the specialist literature is characterised by a notable lack of consensus on the theoretical and operational definition of what constitutes a family business. Typically, researchers who focus on this topic tend to use their own definitions of family businesses, some of which rely upon ownership share, kinship relations or managerial composition (Birley, 1997; Cromie et al., 1995; Ram and Holliday, 1993; Daily and Dollinger, 1992). In an effort to improve research in this area, Westhead and Cowling (1998) have suggested the widening of the relevant definition to include the interaction of complex conditions that influence the operation and competitiveness of family firms. In their study, Chua et al. (1999) have further asserted that perceptions and behaviour in relation to family businesses can significantly undermine stereotypical definitions and render them useless for research or evaluation purposes. The working definition employed in this research study has been widened to take into consideration the Westhead and Cowling (1998) ‘‘multiple conditions’’ approach as well as the broader social context suggested by Fletcher (2000) and Chua et al. (1999), which incorporate ‘‘softer’’ characteristics such as kinship, affiliation and personal relations. Accordingly, and in order to be defined as such, members of a family (or families) must be able and willing to exercise significant control of, and involvement in, the management, decision making and operational aspects of a business. Actual and/ or perceived share- or stake-holdings in a family business are implied in this working definition only if the above conditions have been fulfilled (Matlay, 1996; Barry, 1989). For example, businesses where family members as ‘‘absentee shareholders’’ hold majority shares and which are operated by unrelated managers or management teams have been excluded from the ‘‘non family’’

business category (for a detailed empirical justification see Matlay (1996)). Similarly, in cases of multi-family ownership where at least two members were directly involved in the management, decision-making and operational aspects of the respective firm, these were classified as family businesses. A large proportion of micro- and small businesses in the sample were included in the family business category (Table II). Amongst the organisations that operated in the manufacturing sector, 83.33 percent of micro- and 71.50 percent of small businesses were in this category. In the service sector the proportion of family businesses rose to 85.85 percent in micro-business and 73.85 percent in small business size band. Interestingly, 50.98 percent of medium-sized businesses in the manufacturing sector and 51.69 percent in services were also family firms. Only a small proportion of large businesses still remained under family control: 15.38 percent in manufacturing and 19.05 percent in the service sector. The proportion of family businesses in the research sample is considerably higher than similar data offered by previous researchers. Caution should be exercised in the interpretation of this statistical data. First, a wider definition of what represents a family business was employed in this study. Second, the research sample must be viewed as a small, random representation of the 3.95 million businesses that were active in the UK economy at the time of the telephone survey (1998). Third, a sizeable proportion of microbusinesses in the sample were sole traders and privately owned businesses. Four, the quantitative data in this study is a computation of the information supplied by respondents and should be viewed accordingly. Most quantitative information collected from respondents in the small business sector is notoriously difficult to validate against either secondary or official data available in the public domain Table II Family business representation in the research sample (n = 6,000) Size band

Size definition

A B C D

Micro-business Small business Medium-sized Large business

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Number of employees 0-10 11-49 50-250 251+

Family businesses (%) Manufacturing Services 83.33 71.50 50.98 15.38

85.85 73.85 51.69 19.05

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(Matlay, 2000b). Furthermore, a large proportion of these firms were not VAT registered or legally required to submit either full or modified statutory accounts. Nevertheless, some useful trends could be drawn from this data. Notably, family control appears to be size related and inversely proportional to it. A high proportion of micro- and small businesses and just over half of medium-sized organisations can be classified as family businesses. Interestingly, services firms exhibit a higher proportion of family businesses than those operating in the manufacturing sector.

The locus of training and HRD decisionmaking processes The telephone survey sought to establish the locus of training and HRD decision-making processes within the research sample (Table III). Interestingly, although there were considerable size-related differences amongst the firms in the sample, the locus of control upon training and related decision making processes showed marked similarities across both the manufacturing and the service sectors. In micro- and small businesses, the locus of organisational control and training-related decisions were retained by owner/managers. There were no distinctions made between general control of a firms and the locus of human resource decisions in micro-businesses. This was also the case in the vast majority of small businesses, with the exception of a small proportion of businesses positioned towards the upper limit of this particular size band. The consistency of owner/manager influence and control upon the daily activities of their microand small businesses applied equally to both family and non-family firms. Thus, in the vast majority of cases (100 percent of microbusinesses and 92.71 percent of small businesses), the owner/manager was identified as the main decision maker, inclusive of issues

related to training and human resource development. Only in a fraction of small businesses (7.29 percent), were personnel managers responsible for the human resource function. Even in these firms, owner/manager involvement was considerable and the final decision appeared to rest with them. Training plans and related budgets were only encountered in 5.62 percent of micro- and 8.84 percent of small businesses. In just over two-thirds (68.46 percent) of the medium-sized businesses in the sample, owner/ manager involvement in human resource development issues was still considerable, even though this type of organisation exhibited increasing levels of complexity and formality. In just over one quarter (25.97 percent) of cases, personnel managers exercised control upon training and HRD decisions. Interestingly, in 5.57 percent of medium-sized businesses key personnel were involved in decision-making processes related to this important organisational function. All the respondents interviewed claimed to use training plans and related budgets as part of their HRD strategy. In the case of the large businesses in the sample, organisational control was invested in the Board of Directors and its chief executive. At an intermediate level, a multitude of managerial and operational functions were devolved to designated management teams or operatives. Significantly, in all large organisations, designated managers represented the training and HRD function, at departmental level. Furthermore, it appears that detailed training and HRD plans and budgets were in use and that considerable financial resources were allocated to this strategic function.

The impact of management styles upon training and HRD strategies A great deal has been written in recent years on the influence and crucial role of owner/ managers in the day-to-day running of their

Table III The locus of training adn HRD decision-making processes Band code a B C D

Number of employees

All firms (%) (n = 6,000)

1-10 11-49 50-250 251+

89.17 7.93 2.33 0.57

Who makes training decisions? Owner/manager Personnel Key personnel Other (%) manager (%) (%) employees (%) 100.00 92.71 68.46 0.00

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0.00 7.29 25.97 11.39

0.00 0.00 5.57 88.61

0.00 0.00 0.00 0.00

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businesses (Matlay, 1999). The preliminary results of the telephone survey have confirmed these findings and showed that only a small minority of micro- and small business owner/managers were prepared to delegate responsibility for, or the control of, any managerial or strategic functions. The acute need for control upon their businesses was also reflected in these individuals’ choice of management style (Table IV). Once again, while there were considerable size-related variations, the choice of management style was not significantly different in family and non-family owned businesses. A preference for informal management styles was expressed by 92.86 percent of micro- and 70.05 percent of small business respondents. In 5.46 percent of micro-businesses and 19.67 percent of small firms owner/managers claimed to prefer a mixed formal/informal management style. Interestingly, 1.68 percent of micro-businesses were managed externally to the firm, by either consultants or specialist agencies. Formal management styles were reported by 10.29 percent of small business respondents. In medium-sized organisations more than half (59.97 percent) of respondents claimed to prefer a professional approach to the management of their businesses. Just over one quarter (26.16 percent) of owner/managers claimed to have a formal approach to management. Only 13.87 percent of respondents admitted to prefer informal management styles while 5.31 percent used a mixed formal/informal approach. The only managerial style reported by respondents in large organisations referred to the professional approach that was also preferred by more than half of medium-sized businesses in the sample. Owner/manager management styles reflected considerably upon recruitment, training, HRD and employee relations in the workplace. Typically, the vast majority of owner/managers in micro- and small businesses resorted to informal means of

recruitment and tended to prefer a similar approach to training and HRD issues. Informal methods were used to induct, train and retrain employees in the vast majority of the micro- and small businesses in the sample. Those owner/managers who indicated a preference for formal styles of management also used formal methods of recruitment, induction, training and retraining of employees. All employees in these firms were treated with the same degree of formality, regardless of their position or length of service. The formal approach did not appear to differentiate between family members, friends and other employees. Interestingly, mixed formal/informal management structures were much less rigid than formal styles and allowed for a greater degree of flexibility in all aspects of HRD processes. Formal and informal approaches were used interchangeably to suit an owner/manager’s general and specific needs and also depended largely upon their temperament. These approaches were considered less flexible than informal management styles but much more effective in growth-oriented micro- and small businesses. Typically, however, formal means of recruitment, training and HRD procedures were applied to supervisory or management staff as opposed to the informal manner adopted in relation to workers, who appeared to respond more positively to this type of approach. Respondents in just over half (54.26 percent) of the medium-sized organisations and in all (100 percent) large businesses in the sample claimed that they preferred a professional managerial approach. These businesses employed professional teams to manage all organisational functions and operations, including training and HRD. Surprisingly, just under one quarter (24.03 percent) of medium-sized businesses were managed informally while 21.71 percent relied on formal styles of management. Within the medium-sized bracket, mixed

Table IV Management styles of owner/managers (n = 6,000) Management style Formal Informal Mixed formal/informal Professional External/agency

Micro-business (%)

Small business (%)

Medium-sized (%)

Large business (%)

0.00 92.86 5.46 0.00 1.68

10.29 70.04 19.67 0.00 0.00

26.16 13.87 5.31 59.97 0.00

0.00 0.00 0.00 100.00 0.00

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formal/informal managerial styles were adopted by 5.31 percent of respondents. Informal and mixed managerial styles were adopted by organisations positioned at the lower limit of this particular size band while professionally managed businesses were largely located at the higher end of the range. Medium-sized and large businesses in the sample exhibited complex training, HRD and industrial relations processes, the analysis of which is beyond the scope of this article.

The impact of kinship upon training and HRD in small family businesses The preliminary analysis of the quantitative data that has emerged from this research study has failed to identify any statistically significant factors that differentiated between the training and HRD strategies of family and non-family businesses within the sample. Neither the locus of decision-making processes nor the choice of management style appear to vary significantly between these two groups of small economic units operating in the small business sector of the UK economy. However, the qualitative data that was collected from 600 semi-structured, face-to-face interviews and 120 matched case studies has highlighted a number of subtle attitudinal, perceptional and motivational differences and their impact upon training and HRD strategies in family and non-family businesses. The subtleties of family relationships in the workplace and the impact of kinship involvement in small business strategy were both complex and difficult to quantify or qualify. Furthermore, only a minority of the owner/managers in the sample found it desirable or actually achieved a distinct dichotomy between business and family relationships in the workplace, even though they freely admitted that occasionally such interactions resulted in conflicting and/or negative outcomes. A summary of the preliminary results of the qualitative data is presented below. Attitudinal, perceptional and motivational influences The importance of owner/manager attitudes towards training and HRD in small businesses has been discussed extensively elsewhere (Matlay, 1997, 1998, 1999). The ‘‘paradox of training’’ that applies to the small business sector in general, still holds, to a

significant extent, in relation to family-owned firms. This is not surprising, considering that a large proportion of small businesses in Britain can be included in this category (see, for example, Westhead and Cowling, 1996a, b). Thus, it appears that although the vast majority of owner/managers in the sample held a positive approach to training there were a number of subtle but important differences in their attitudes to its purpose and expected outcomes. The data that was collected during face-to-face interviews has shown that typically, owner/managers in non-family firms perceived training as an organisational expense. Similarly, they viewed all related tasks – including evaluation, programme identification and post-training feedback – strictly in terms of firm-specific HRD issues. The motivation to train was narrowly related to existing (both actual or perceived) training and HRD needs of the workforce. Importantly, owner/managers did not perceive the training function as a crucial element of the overall business strategy. Furthermore, designated resources, both human and financial, were considered and allocated in competition with other operational functions and within the conflicting demands of an overall organisational goal. In the vast majority of cases, training interventions were of a reactive rather than proactive nature. Succession issues, although sometimes present in nonfamily small businesses, were perceived as political struggles that ultimately would be resolved under internal competitive conditions. Similarly, management buy-ins or buy-outs were also perceived as feasible solutions to succession challenges in this type of small business. In contrast, owner/managers in family businesses perceived training and related issues in two distinct ways. First, the training of non-family members was viewed strictly as a firm-specific, HRD issue. Training requirements, choices and related feedback were approached in accordance with actual or perceived short-term organisational needs and pressures. The training of non-family employees was not perceived as a crucial element of organisational strategy. Earmarked as an expense to the business, all training and HRD related human and financial resources were evaluated and distributed competitively within the overall business strategy. Nonfamily employees were not generally

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considered for succession to top positions in family-owned small firms. Second, and most important, the training needs of family members were viewed as investments, with potential long-term returns to both the family and the business. Furthermore, many of the training interventions that involved family members were approached in terms of individual career development and treated accordingly by the owner/manager and family members. Similarly, training options were usually considered within an overall medium and/or long-term organisational strategy, adapted to suit the perceived career needs, expectations and/or ambitions of family members. Short-term organisational needs were not deemed to be significant to the overall career development aspirations of family members working in small businesses. Paradoxically, however, the career development of family members was perceived by owner/managers as crucial to the medium- and/or long-term organisational strategies and goals of this type of small business. Interestingly, succession issues proved very important to the choice of training and the career development path of family members that worked in small firms. Owner/manager succession expectations and preferences also played an important role in the choice of career development of family members employed in this type of firm. Human and financial resource considerations Recent research in the field of training and HRD in small businesses has identified a number of directly and indirectly relevant factors that can affect this important aspect of organisational development (Matlay, 1996, 1999). The data that emerged from matched case studies has highlighted further training and HRD related dissimilarities between family and non-family businesses. These differential factors relate to human and financial resources in general and their availability, provision and allocation in particular. Individually and cumulatively, human and financial resources were identified by respondents as most likely to influence the provision of training in both types of small organisations. Overall, owner/managers, family members working in the business and non-related employees tended to agree on issues that related to the human resource aspect of training. However, it should be

noted that in micro- and small businesses in the sample, there were not many employees, in addition to owner/managers, who had access to relevant financial and/or market information. Nevertheless, the insights and perceptions of family members and nonrelated employees proved useful in gathering a wealth of ‘‘soft’’ data on training and HRD processes in this type of businesses. The directly relevant factors identified by respondents involved the market positioning of a business, prevailing economic conditions and the availability and cost of relevant training. The indirectly relevant category included time constraints, the lack of in-house trainers and a number of factors appertaining to trainee interest, motivation and cover. The market positioning of a small firm and the economic conditions prevailing at the time that HRD-related decisions were made emerged as the main determinants of training in non-family businesses. These two factors were equally important to family businesses but only to non-family employees. To the training and career development needs of family members, they proved to be less relevant. Nevertheless, these two factors were deemed as important determinants of strategies in this type of firm. Notably, it emerged that there existed a positive link between the management progression and the career development of owner/manager relatives involved in small family businesses. Furthermore, owner/managers claimed that employing close relatives could have a mitigating effect upon managerial and supervisory skill shortages. This link was evident in most cases, including in those small businesses in which owner-managers relied exclusively upon short-term, reactive rather than proactive HRD strategies, sometimes known as ‘‘just-in-time’’ training (Matlay, 1996). Interestingly, in small family businesses, issues relating to succession, trust and job delegation seemed to override some deeprooted owner/manager beliefs and/or longstanding managerial practices. For example, non-family employees were mostly perceived as ‘‘assets on legs’’ and considered liable to ‘‘walk away’’ or be ‘‘poached’’ by external agents, including ex-employees who had set up in competition. In contrast, family members were ‘‘trustworthy’’ and expected to remain loyal and stand their ground even under the most difficult circumstances. Thus,

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at least in theory, their commitment, motivation and propensity for hard work was taken for granted, trusted and guaranteed by virtue of family links and long-standing interpersonal relationships. In practice, however, owner/managers’ expectations of productive, trust-based, family relationships often proved difficult to sustain both within and without the workplace. The availability of relevant training seems to have a direct effect upon the HRD strategies of both family and non-family small businesses. All the respondents involved in the qualitative research confirmed the existence of a strong link between firm specific training needs and sustainable competitive advantage. According to these owner/managers, a whole spectrum of skill shortages could not be overcome due to their failure to locate training relevant to both current and future organisational needs. They claim to have undertaken focused searches at local, regional and even national level in an attempt to locate potential sources of economically priced training programmes relevant to the specific HRD needs that they have identified. Apparently, few of these respondents were successful in their procurement efforts. Thus, the lack of relevant, firm-specific and customised training appears to have handicapped some owner/managers’ HRD strategies to the extent that new marketing drives had to be postponed or abandoned. Even when some useful training programmes were occasionally located, the prohibitive cost of custom delivery tended to inhibit these owner/ managers. Furthermore, some respondents claimed to have had difficulties in costing the training programmes on offer or to estimate related marginal or incidental expenditure. As a result they tended to favour ‘‘off-the-shelf’’ training packages that sometimes included additional after-sale support. In most cases, however, these proved too general in scope and focus and rarely match the firm-specific training needs of these owner/managers. Time constraints, so prevalent in smaller economic units, were perceived to further handicap training provision in this type of organisation. The training function in both family and non-family firms was considered as an integral part of a wider business strategy and in competition for scarce organisational resources. In the case of small family businesses, an owner/manager often felt

compelled, by successionary motives, to carve out the necessary time and continue a search until a suitable programme was located. Similarly, from a financial perspective, family members benefited from additional support that, on occasions, originated from sources external to the firm. Such sources would include personal, institutional and developmental funding as well as debt equity guaranteed by family members. Usually, marginal and incidental costs attributable to personal or career development programmes were absorbed by the small firm. Typically, small business owner/managers and key personnel undertook most of the internally provided training in their firms. Not even the larger of these firms could justify an internal trainer and relied considerably upon external provision of specialised training. Apart from the obvious direct financial considerations, external training also incurred short-term displacement costs for individuals who were trained off premises or in non-productive environments. In micro and small businesses, even one employee away from his/her usual work place could accrue a significant loss in manufacturing/service productivity. Issues relating to trainee motivation and interest caused additional difficulties in this type of firm. In the case of non-family employees, most such difficulties could be overcome by the use of various incentives, including modest financial inducements of productivityrelated bonuses. Family members, however, were mostly expected to comply with an owner/manager’s choice of training or to find suitable alternative programmes.

Concluding remarks In the UK, government representatives, policy makers and academic observers view a healthy small businesses sector as a crucial prerequisite to the development of a stable socio-economic and political infrastructure. According to a fast expanding volume of empirical research, a large proportion of the domestic small business sector in this country can be defined as family-owned businesses. Within the vast body of small business knowledge, however, there exists a paucity of empirically rigorous research on issues relating to the training and HRD strategies of family firms. The research study upon which this article is based sought to redress this

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imbalance by adopting a narrow focus upon this important aspect of small business development. It outlines, for the first time, the preliminary results of a study that combined an exploratory telephone survey of 6,000 randomly selected businesses, 600 focused interviews and 120 matched case studies. The telephone survey has established that the locus of training and HRD decision-making processes in micro- and small businesses were retained by owner/managers regardless of size, sectoral spread or type of ownership. Furthermore, no distinction was made between organisational control and the locus of human resource decision-making process. Even when other employees were involved in this important managerial function, the final decision invariably rested with the owner/ manager. Their preferences in relation to management styles reflected considerably upon their HRD strategies in general, and their choice of recruitment, training and retraining in particular. However, neither the locus of decision-making processes nor the choice of management styles varied significantly between family and non-family businesses in the sample. The 600 face-to-face, semi-structured interviews have documented a number of subtle attitudinal, perceptional and motivational differences and highlighted their impact upon training and HRD strategies in both family and non-family small businesses. The motivation to train appeared to be dependent upon the actual and/or perceived HRD needs of a workforce. Most owner/managers viewed training as one of many aspects of a business strategy and designated resources were allocated on a competitive basis. Importantly, it appears that the majority of reported training interventions were of a reactive rather than proactive nature. Succession issues, as and when present in non-family small businesses, were viewed as leadership jockeying amongst key employees. In family businesses, training and related issues were perceived in two distinct ways: the needs of non-family employees were viewed strictly as firm-specific HRD issues while the requirements of family members were approached in terms of individual career development. Succession issues in family businesses represented an important consideration for owner/managers and affected their overall training and HRD

strategies. In most cases, training decisions relating to family members were resolved proactively, usually as part of medium and/ or long-term HRD and succession strategies. Importantly, the in-depth data that emerged from 120 matched case studies has highlighted further training and HRD differences between family and non-family businesses. Typically, these related to human and financial resources in small businesses and tended to influence their availability, provision and allocation. Two types of human and financial factors were identified by respondents as being relevant to their training and HRD strategies. Directly relevant factors included the market positioning of a business, prevailing economic conditions and the availability and cost of training. The indirectly relevant category involved time constraints, the lack of in-house trainers and various factors related to trainee interest, motivation and cover. The market positioning of a small firm and the prevailing economic conditions proved very important to both family and nonfamily businesses, but tended to affect them differently. To non-family small businesses, a positive market orientation and favourable economic conditions were imperative to their training and HRD strategies and reflected considerably upon actual provision. To the training and career development needs of family members, these two factors proved relevant as general business health indicators and as important influences upon their career development and succession expectations. In small family businesses, a positive link was identified between management progression and the career development needs of individuals who were directly related to owner/ managers. The recruitment, training and development of family members were usually perceived as having positive outcomes in relation to managerial and supervisory skill shortages. In both family and non-family small businesses a lack of firm specific, relevant training resulted in skill shortages that could not be easily overcome. Unlike in the case of non-family businesses, career development and succession considerations often induced owner/managers to continue their search until at least some relevant or beneficial training was identified.

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Amongst indirectly relevant factors, time constraints were perceived to affect training provision in non-family small businesses. Due to reported time pressures, some searches and training programmes were either postponed or discontinued. In contrast, in small family businesses, owner/managers felt compelled by successionary considerations to find or allocate the necessary time and continue their training and HRD programmes to completion. Similarly, in financial terms, family members tended to benefit from additional and/or continuous support that included personal, institutional and developmental funding as well as debt equity guaranteed by family members. Typically, in both types of firm, owner/managers and key personnel undertook most of the internally provided training. Family members, however, were coached and mentored more extensively than other employee categories. Issues relating to trainee motivation and interest could cause difficulties in both family and non-family small businesses. For non-family employees, a reluctance to train could be overcome through the use of modest financial or motivational inducements, including productivity-based bonuses. In contrast, family members were expected to comply with an owner/manager’s choice of training and/or to find suitable career development programmes. This exploratory research study has identified a number of pertinent issues relating to the training and HRD needs and strategies of small family businesses. Further research is needed, however, to explore the long-term trends and variations in owner/ manager attitudes, expectations and provision, as and when affected by rapid socio-economic, organisational and technological change. Additional longitudinal research in this topic could benefit policy makers as well as owner/managers and their employees, in particular in relation to public and private resource allocation. In terms of the endemic skill shortages apparent in this important sector of the UK economy, empirically rigorous research could offer potential training solutions that would be better suited to small-scale economic activity rather than the more general, large business HRD or ‘‘off-the-shelf’’ programmes currently on offer.

References Barry, B. (1989), ‘‘Development of organisation structure’’, Family Business Review, Vol. 2 No. 3, pp. 293-315. Birley, S. (1997), The Family and the Business, Grant Thornton, London. CEG (1995), Human Resource Management in Smaller Firms, Cambridge Economic Group, Cambridge. Carter, S. and Jones-Evans, D. (Eds) (2000), Enterprise and Small Business: Principles, Practice and Policy, Pearson Education, Harlow. Chua, J., Chrisman, J. and Sharma, P. (1999), ‘‘Defining the family business by behaviour’’, Entrepreneurship Theory and Practice, Vol. 23 No. 4, pp. 19-39. Cosh, A., Duncan, J. and Hughes, A. (1998), Investment in Training and Small Firm Growth and Survival: An Empirical Analysis for the UK, 1987-95, Research Report No.36, HMSO, London. Cromie, S., Stephenson, B. and Monteith, D. (1995), ‘‘The management of family firms: an empirical investigation’’, International Small Business Journal, Vol. 13 No. 4, pp. 11-13. Curran, J., Blackburn, R., Kitching, J. and North, J. (1996), Establishing Small Firms’ Training Practices, Needs, Difficulties and Use of Industry Training Organisations, DfEE Research Studies RS17, HMSO, London. Daily, C. and Dollinger, M.J. (1992), ‘‘An empirical examination of ownership structure and family and professionally managed firms’’, Family Business Review, Vol. 5 No. 2, pp. 117-36. European Commission (1996), ‘‘SMEs: recommendation of the commission’’, Official Journal of the European Communities, Vol. L107 No. 6, pp. 1-2 Fletcher, D. (1997), ‘‘Organisational networking, strategic change and the family firm’’, unpublished PhD thesis, Nottingham Business School, Nottingham. Fletcher, D. (2000), ‘‘Family and enterprise’’, in Carter, S. and Jones-Evans, D. (Eds), Enterprise and Small Business: Principles, Practice and Policy, Pearson Education, Harlow. Goss, D. (1991), Small Business and Society, Routledge, London. Hendry, C., Arthur, M. and Jones, A. (1995), Strategy Through People: Adaptation and Learning in the Small-Medium Enterprise, Routledge, London. Holme, C. (1992), ‘‘Self development and the small organisation’’, Training and Development UK, August, pp. 16-19. Matlay, H. (1994), ‘‘Vocational education and training in the small business sector: some empirical considerations’’, paper presented at research seminar, Department of Continuing Education, Warwick University, Coventry. Matlay, H. (1995), ‘‘Training and human resource development in small businesses: a critical perspective’’, paper presented at the SME Centre, Research Seminar Series, University of Warwick, Coventry. Matlay, H. (1996), ‘‘Vocational education and training in the small business sector of the British economy’’, unpublished PhD thesis, Department of Continuing Education, University of Warwick, Coventry. Matlay, H. (1997), ‘‘Training and human resource management in small businesses: a mixed methodology approach’’, paper presented at the

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VET Conference, University of Huddersfield, Huddersfield. Matlay, H. (1998), ‘‘The paradox of training in the small business sector of the British economy’’, Journal of Vocational Education and Training, Vol. 49 No. 4, pp. 573-89. Matlay, H. (1999), ‘‘Vocational education and training in Britain: a small business perspective’’, Education + Training, Vol. 41 No. 1, pp. 6-13. Matlay, H. (2000a), ‘‘S/NVQs in Britain: employer-led or ignored?’’, Journal of Vocational Education and Training, Vol. 52 No. 1, pp. 135-47. Matlay, H. (2000b), ‘‘Vocational education and training in small businesses: setting a research agenda for the twenty-first century’’, editorial article, Education + Training, Vol. 42 Nos 4/5, pp. 200-1. Matlay, H. (2001), ‘‘Training for change in small, familyowned businesses: some lessons from Britain’’, paper presented at the Rent XV, Research in Entrepreneurship and Small Business, University of Turku, November. Matlay, H. (2002), ‘‘HRD strategies in small, family and non-family businesses: a critical perspective’’, paper presented at the Third Conference on HRD Research and Practice Across Europe, University of Edinburgh, Edinburgh, January. Matlay, H. and Cressy, R. (1997), ‘‘Health and safety in SMEs’’, in ENSR, The European Observatory for SMEs, Fifth Annual Report, EIM Small Business Research and Consultancy, Zoetermeer. Osowska, F. (1996), Rates of Return to Education and Training for Individuals, Department for Education and Employment, Sheffield.

Ram, M. and Holliday, R. (1993), ‘‘Relative merits: family culture and kinship in small firms’’, Sociology, Vol. 27 No. 4, pp. 629-48. Storey, D. (1994), Understanding the Small Business Sector, Routledge, London. Storey, D. and Westhead, P. (1995), ‘‘Management training in small firms: a case of market failure?’’, working paper No. 29, SME Centre, University of Warwick, Coventry. Westhead, P. and Cowling, M. (1996a), ‘‘Demographic contrasts between family and non-family unquoted companies in the UK’’, Centre for Small and Medium-sized Enterprises, working paper No. 32, University of Warwick, Coventry. Westhead, P. and Cowling, M. (1996b), ‘‘Management and ownership contrasts between family and nonfamily unquoted companies in the UK’’, Centre for Small and Medium-Sized Enterprises, working paper No. 32, University of Warwick, Coventry. Westhead, P. and Cowling, M. (1997), ‘‘Performance contrasts between family and non-family unquoted companies in the UK’’, International Journal of Entrepreneurial Behaviour and Research, Vol. 3 No. 1, pp. 30-52. Westhead, P. and Cowling, M. (1998), ‘‘Family firm research: the need for a methodological rethink’’, Entrepreneurship Theory and Practice, Vol. 23 No. 1, pp. 31-56. Westhead, P. and Storey, D. (1997), ‘‘Training and development of small and medium-sized enterprises’’, Research Report No. 26, HMSO, London.

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Engaging SME managers and employees in training: lessons from an evaluation of the ESF Objective 4 Programme in Great Britain David Devins and Steve Johnson The authors David Devins is Senior Policy Analyst and Steve Johnson is Principal Research Fellow, both at the Policy Research Institute, Leeds Metropolitan University, Leeds, UK Keywords Training, Human resource management, Small- to medium-sized enterprises, United Kingdom Abstract This paper draws on a telephone survey of 116 independent SMEs to explore the impact of a variety of training interventions on human resource (HR) practices and business performance in Great Britain. The paper investigates the extent to which targeting such interventions on the managers of SMEs affects the impact and the likelihood of changes in HR practices but finds no statistically significant relationship. The research findings suggest that whilst training interventions have positively contributed to the establishment of HR practices and are perceived by SME managers to have met the needs of the organisation, their impact on a range of business performance indicators is fairly modest. Furthermore the research identifies the propensity of SMEs who are currently engaged in training to become involved in these interventions whilst the majority of SMEs who are not engaged in external training activities remain untouched by the policy intervention. Electronic access The research register for this journal is available at http://www.emeraldinsight.com/researchregisters The current issue and full text archive of this journal is available at http://www.emeraldinsight.com/0040-0912.htm Education + Training Volume 44 . Number 8/9 . 2002 . pp. 370–377 # MCB UP Limited . ISSN 0040-0912 DOI 10.1108/00400910210449204

Introduction Encouraging the development of the skills of the workforce has emerged as a major priority for government policy as active labour market interventions have been implemented in response to concerns related to competitiveness and lifelong learning (DTI/ DfEE, 2001; HM Treasury, 2000; Fryer, 1999). The rationale for intervention is twofold. On the one hand it is based on the premise that improving the skills, attitudes and aspirations of those in work will alleviate their propensity to become excluded from the labour market if they should be subject to redundancy or job loss. On the other hand it also has the potential to contribute to economic growth through the development of a more skilled workforce able to compete more effectively in a global environment. Whilst recognising the importance of the myriad of informal ways in which individuals and organisations learn there remain problems capturing and quantifying such learning (DfEE, 2000). Consequently there is a tendency to focus analysis on discrete training activities often undertaken ‘‘off the job’’ or related to accredited learning. Analysis of this type of training activity invariably leads to the conclusion that SMEs undertake less formal training than their larger counterparts (see Johnson (1999) for a more detailed review and discussion). However the dynamics of workplace training are extremely complex and in a review of the literature exploring employers’ attitude to training for the National Skills Task Force the author concluded ‘‘we do not have a good picture of how much workplace activity is actually going on or what form it takes’’ (Keep, 1999, p. 2). A further dimension of this incomplete picture is the contested nature of the impact of training. Various research approaches have explored the contribution to economic, organisational or personal development (e.g. Storey and Westhead, 1994; Black and Lynch, 1996; Green, 1997; Cosh and The authors are grateful to the Department for Education and Employment for permission to use the database that was collected as part of the evaluation of Objective 4 in Great Britain. All interpretations and opinions expressed in this paper are the sole responsibility of the authors, and do not necessarily reflect the views or policies of DfEE.

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Hughes, 1998). Whilst the evidence of impact is variable, there are some who doubt whether a definitive answer could ever be found to the question of payback on human resource development (HRD) activity (Gibb, 1997). This uncertainty is seen to inhibit the take up of training as some employers remain unconvinced of the benefits of undertaking training activity. The development of case studies (e.g. Johnson et al., 2000) to illustrate the ‘‘bottom line’’ benefits of undertaking training and development activities provides some situational evidence but there remains a lack of broader-based evidence of impact, particularly in the independent small business context. This paper seeks to explore the extent to which involvement in training funded through the European Social Fund (ESF) Objective 4 Programme in Great Britain (1998-2000) has encouraged a process of lifelong learning and increased competitiveness amongst smaller businesses. A major priority (accounting for 70 per cent of the total funds) targeted training on those individuals within companies who do not have relevant up-todate skills and who risk becoming unemployed. Within this priority there were two strands of funding. Both strands support training and development first for key individuals and second for target groups within the workforce. An important aspect of the programme is that it has supported the development and delivery of a range of training interventions which may not have been implemented within the framework of mainstream UK government policy. The aim of the paper is to explore the extent to which training interventions which have targeted managers affects their perception of the value of the training intervention and the implementation of organisational change.

Methodology This paper is based on the exploration of a data set collected to evaluate the ESF Objective 4 Programme in Great Britain (1998-2000). The research methodology underpinning the evaluation of ESF Objective 4 (O4) drew on a variety of primary and secondary research methods and utilised both qualitative and quantitative data collection

methods. The methodology is outlined in some detail elsewhere (Devins et al., 2001). A key element of the research was initial and follow up telephone surveys (in 1999 and 2000) with 200 employers receiving O4 supported training along with 50 face-to-face interviews with the managers and employees of organisations engaged in O4 supported training activities. Employer interviews were conducted with the manager overseeing the ESF O4 training intervention within the company. In the absence of reliable management information to establish a sample which was representative of participants in O4, broad survey quotas were established to ensure coverage of companies operating in both manufacturing and services sectors of the economy and of companies of varying sizes. In addition, quotas were established to reflect the regional dimension of O4 implementation. The structure of the baseline and follow-up survey samples is illustrated in Table I. Table I indicates that the sample contains a broad cross-section of employers by employment size, approximately evenly divided between manufacturing and services. Surveyed businesses are located across all regions of England, Scotland and Wales. No claims to the broader representativeness of the sample are made. Attributes associated with business size and independence have been used to develop a sub-set of the database which excludes organisations which are part of a larger group or employ more than 100 people. Consequently analysis is based on small independent companies employing under 100 employees (n = 116). Three categories of O4 participant have been established in order to examine the effect of interventions which engage different groups within the organisation. The first category (n = 46) comprises organisations where both managers and employees from other occupations within the business have been involved in the training intervention. The second category (n = 26) relates to interventions where managers alone have been engaged in the intervention. The third category relates to organisations where employees from other occupations (i.e. excluding all managers[1]) have been engaged in ESF O4 supported training activity (n = 44).

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Table I Characteristics of survey respondents 1999

Employment size (employees) 1-9 10-99 100+ Sector Manufacturing Services Region Eastern and East Midlands London and South East North East, Yorkshire and Humber North West South West West Midlands Wales Scotland National projects Total

2000

No. of respondents

%

No. of respondents

%

42 122 47

19.9 57.8 22.3

36 105 39

20.0 58.39 21.7

100 111

47.4 52.6

80 100

44.4 55.6

32 32 19 23 22 19 29 27 8 211

15.2 15.2 9.0 10.9 10.4 9.0 13.7 12.8 3.8 100.0

29 29 18 18 17 17 25 23 7 180

16.1 16.1 10.0 10.0 9.4 9.4 13.9 12.8 3.9 100.0

Research findings This paper focuses on the subset of the data to explore the impact of the training interventions on independent organisations employing less than 100 employees. The research hypothesis to be tested is: H1. When interventions target both managers and the wider workforce within one organisation the value of the training intervention and likelihood of change in HR practices increases. Widening SME participation in training The baseline survey asked a number of questions designed to establish the extent and nature of training and development activities within the sample businesses prior to their becoming involved in the O4 programme. Table II summarises the responses and compares them with the results from the 2000 Learning and Training at Work (LTW) Survey (IFF, 2000). While the questions asked in both surveys are not directly comparable, it is clear from Table II that the sample of O4 businesses is much more likely than the average UK business to have been involved in training and development activities. They are also far more likely to have introduced formal HR practices such as produced training plans and established

Table II Selected indicators of training activity – comparison between O4 survey sample and Learning and Training at Work Survey Total (percentage) Providing training – LTW Providing training – O4 With training plan – LTW With training plan – O4 With training budget – LTW With training budget – O4 With FE links – LTW With FE links – O4 Total

68 89 32 68 25 65 20 61 100.0

Note: n = 116 Source: IFF (2000)

training budgets and also to have been involved with further education training providers. One interpretation of this finding is that the O4 programme has proved to be attractive to SMEs that already have some commitment to training and development, but need resources and/or support to develop this further. This may be reinforced by the fact that O4 project managers tend to concentrate upon businesses with whom they have had some prior contact and/or for which they feel that there is a good chance of achieving positive outcomes, an assertion supported by the

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figures on prior contact with FE establishments (Table II). One of the stated aims of O4, in common with other ESF initiatives, is to influence organisations to undertake further training and development that is not specifically supported by O4, in other words to ‘‘add value’’ to existing interventions. In effect, O4 is seen as a catalyst to encourage organisations to undertake and realise the benefits of training; therefore the impact of the O4 funding should be much greater than the direct impact upon the employer or individuals concerned. The survey questionnaire allows us to examine the extent to which value has been added within the sample employers, to look at the influence of workforce engagement on this outcome and to consider how far any increases in training activity can be attributed to the O4 programme. Table III summarises some of the key indicators. One of the key measures of progress towards lifelong learning targets in the UK is based on the extent to which levels of accredited training increase. The survey indicates that O4 interventions have contributed to this target with just over 40 per cent of organisations suggesting that they had introduced ‘‘new’’ qualifications as a result of O4. Interestingly, interventions which engaged ‘‘managers only’’ were less likely to result in the introduction of new qualifications. This may reflect business managers’ reluctance to become involved in accredited learning activities and the more widespread use of vocational qualifications apparent in other workforce occupations. From a supply side perspective this suggests that in seeking to design interventions to increase accredited training, interventions need to go beyond the targeting of managers alone and engage members of the wider workforce. Another way in which value might be added is through employees that had received training passing on the skills that they had

learned to other workers. Table III shows that – according to employers – this has occurred to a considerable extent with almost threequarters of respondents suggesting that steps had been taken to transfer the skills learnt through the training intervention to others in the workforce. There is no clear pattern associated with the extent of involvement of managers in the intervention and the transfer of skills within the workplace as interventions which engage ‘‘workers only’’ are slightly more likely to be involved in skills sharing than those interventions involving managers. The survey also asked a more general question about whether respondents felt that training activity had increased, decreased or stayed the same since their involvement in the O4 initiative. Almost 60 per cent of organisations have increased the level of training since becoming involved in the O4 intervention. There is a slight variation (but as with the other findings not statistically significant) which suggests that those organisations that involved both managers and workers are less likely to have increased the level of training than others. This might be explained by the need for organisations that have undertaken relatively widespread training activity to consolidate their activity before undertaking further training or it may be that they undertake a significant amount of training activity anyway. This highlights the need for greater situational knowledge to provide further insights to guide interpretation of this finding. Over three-quarters of the businesses that had increased training felt that this was due to at least ‘‘some extent’’ to their involvement with O4. The difference between the analysis variables is not statistically significant although we may conclude from the higher proportion of attribution associated with the interventions where managers are involved that the effect of training is more recognisable because of their involvement in some instances.

Table III Impact of O4 on training activity Inclusive Manager only intervention (%) (%) SMEs SMEs SMEs SMEs

introducing qualifications (new to the business) in which O4 skills passed on to others in which level of training has increased since O4 for which training increased due to O4

45.7 75.6 53.7 81.8

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26.9 73.9 60.9 84.6

Non-managers only (%)

Total (%)

45.5 79.5 59.0 78.3

41.4 76.7 57.3 81.1

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Impact on human resource systems Business organisations are increasingly introducing a broad range of measures designed to increase the range of tasks individual workers perform, raise skills levels and increase involvement by making them more responsible for quality control, co-ordination and management (Cully et al., 1999). In spite of the relative simplicity (in organisational terms) of the smaller organisation, multiple drivers of HR activity have been identified (Hendry et al., 1991). In common with the findings from more recent research (e.g. Vickerstaff and Parker, 1995; Johnson and Gubbins, 1992), HRD practices in the small organisation are revealed as largely unplanned and reactive, accompanied by informal/on the job training activity and led by someone other than a HRD officer or expert. This generalised view of HRD in the small business context is often accompanied by a desire by policy makers and consultants to systematise and formalise in an attempt to encourage or ‘‘improve’’ human resource management (HRM) activity. HRM is defined as a set of policies designed to maximise organisational integration, employee commitment, flexibility and the quality of work (Guest, 1987). Research investigating the links between managerial practices and skills formation indicates a clear connection between the use of HR practices such as planning and appraisal systems and increases in the formation of skills (Ashton and Felstead, 1998). However Ashton and Felstead (1998, p. 30) conclude that ‘‘until more employers feel obliged to adopt these new management practices then growth in the demand for problem solving, communication and team working skills will be hampered’’. There are also criticisms associated with the application of generalised HR practices in the SME context (Down, 1999; Hill and Stewart, 1999; Ram, 2000). However, the positive relationship between the existence of HR practices and the incidence of external training in the SME context (Cosh and Hughes, 2000) represents a powerful lever in the design and delivery of interventions aimed to increase HRD practices and training in the SME context. The survey explored the extent to which respondents had introduced one or more of a range of HRD related activities or practices that they had not utilised before they became

involved with O4 (see Table IV). Interpretation of the findings require caution as the statistics relate only to those organisations which did not have the systems and processes in place prior to O4 and the number of organisations is generally small. The analysis reveals a clear but not statistically significant pattern, with those organisations engaging ‘‘workers only’’ most likely to introduce new systems or processes. Those interventions which targeted managers only are least likely to result in changes in HR systems. Impact on business performance There have been increased calls for intervention policy based upon support for small business managers’ aspirations for increased turnover and profitability (Perren, 1999). It is clear from interviews with intermediaries from organisations seeking to deliver training interventions to smaller businesses that an important part of the process of persuading employers to take part is the need to convince businesses that there was ‘‘something in it for them’’. The O4 evaluation did not undertake any sophisticated assessment of the impact of training on business performance, for instance through using statistical or econometric modelling. However, the survey did ask for a self-assessment from respondents as to the extent to which they felt that various measures of performance had changed as a result of the training intervention. Once again, the caveats should be heeded regarding the overall validity of measures derived from responses to such questions. The question we seek to explore is to what extent does involvement of managers in the intervention affect business performance. Table V presents a series of impacts on the business based on the respondent rating on a Likert scale ranging from ‘‘big positive impact’’ to ‘‘big negative impact’’. It should be noted that, in general, respondents reported that the training interventions had had limited impact upon most of the variables that were suggested to them. The overall proportion stating that O4 had a ‘‘big positive impact’’ ranges from less than 1 per cent for exporting to 16 per cent for ‘‘confidence about the future’’. As a general rule, the ‘‘harder’’ the measure (in terms of financial and market performance) the less influence the training intervention is felt to have had. The picture is

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Table IV Percentage of organisations that have put in place training-related activities or systems since being involved with O4 Inclusive intervention

Manager only

Non-managers only

Total

57.1 53.8 50.0 54.5 52.4 43.8 22.2 16.7

54.5 26.7 47.1 18.8 46.7 0.0 7.7 7.7

57.1 58.3 72.2 56.5 78.9 60.0 33.3 20.0

56.3 48.1 56.6 45.9 60.0 35.1 21.7 16.1

Formal business plan Formal training plan Training needs analysis Individual development plans Appraisal system Equal opportunities policy Contact with schools, colleges Use of LM information

Table V Percentage of SMEs reporting positive impact NonInclusive Manager managers intervention only only Product development Staff retention Access to markets Competitiveness Confidence in future Sales

51.1 46.7 33.3 50.0 66.7 39.5

34.6 23.1 19.2 61.5 69.2 29.2

38.6 44.2 22.7 55.8 73.3 37.2

Total 42.6 40.4 26.1 54.8 69.8 36.4

slightly more positive for ‘‘softer’’ measures such as confidence (69 per cent felt that O4 had at least some influence) and ‘‘competitiveness’’ (54 per cent). The indicators reported in Table V confirm the difficulty of establishing a relationship between the training intervention and broader measures of performance. The research findings suggest some interesting but inconclusive variations associated with the degree to which a manager is involved in the intervention. The involvement of managers and other workers appears to positively impact on product development, staff retention and access to markets with the influence most prominent on product development. Where ‘‘workers only’’ are involved in a training intervention the survey respondent (a member of the management team) is just as likely to record a positive impact on competitiveness or confidence as those that were directly involved. Meeting SME needs There has been a recognition over a number of years that there is a need for more targeted, flexible solutions in terms of local delivery, duration and timelines to encourage both businesses and their employees to undertake training activity (Johnson and Gubbins, 1992;

Beaver and Lashley, 1998). The survey asked managers themselves to report the extent to which they felt that the training intervention had met the needs of their organisations. The results are summarised in Table VI. The data suggests that the training interventions are reported to have met the needs of SMEs to at least some extent in the majority (over 90 per cent) of instances. There is a slight variation associated with the targeting of training interventions with training aimed at both managers and members of the workforce more likely (though not statistically significant) to result in an intervention which meets the needs of the organisation to a large extent.

Interpretation and conclusions We can conclude from the analysis presented in this paper that training interventions funded under ESF O4 have encouraged the development of a range of HR practices which positively contribute to the lifelong learning and competitiveness agendas. There is evidence that it has encouraged the introduction of qualifications new to businesses, the transfer of skills more widely in the workforce and encouraged businesses to undertake further training. The research Table VI Extent to which the training interventions met the needs of the organisation NonInclusive Manager managers only intervention only To a large extent To some extent Not at all Do not know

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53.7 39.0 4.9 2.4

47.8 43.6 4.3 4.3

43.6 48.7 7.7 0.0

Total 48.5 43.7 5.8 2.0

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suggests that the short-term impact of training interventions upon a range of measures of organisational performance is fairly modest, particularly in relation to ‘‘hard’’ financial measures such as turnover. This raises the question as to appropriate measures of effectiveness or perhaps more relevantly, values in the SME context. One implication of this is that researchers need to look beyond measures of formal training – such as qualifications – in assessing the impact of training initiatives in the SME context. Whilst the introduction of qualifications new to the business may indicate valid outcomes from the training the absence of such results does not necessarily mean that no successful learning has taken place. The research suggests that the training interventions funded under O4 have met the needs of SMEs to ‘‘at least some extent’’ with almost half suggesting that the intervention met the needs of the organisation to a large extent. However this does imply a need for further development and refinement of training interventions in the SME context. Furthermore there is evidence to suggest that a substantial amount of O4 training has been provided to SMEs which were already engaged in training activities. Policy makers face strategic choices associated with the allocation of funds which at the extreme involve making a choice between support to increase ongoing training activities in SMEs or to ‘‘pump prime’’ needs recognition and training provision in SMEs which are not undertaking any external training activity. This paper has explored the impact of engaging managers in training interventions and the results reported are inconclusive. The quantitative analysis yields no statistically significant relationship between interventions which engage SME managers (either on their own or as part of an intervention which draws in other members of the organisations workforce from other occupational groups) and the impact on HRM practices or business performance attributed to these interventions. The analysis reveals that interventions which engage managers and other members of the workforce in collective development activity do not appear to add significant value to the business organisation. We might speculate why the statistical association is so weak when HR ‘‘good practice’’ and case study experience suggests it should be more marked.

The absence of a robust model of good practice associated with training in the small business context hampers rigorous scientific research. Much of the relevant literature (e.g. Stern and Sommerladd, 1999; Keep, 1999) suggests that learning in the workplace is both too complex and too variable to be adequately captured in an all embracing model. The broad range of characteristics exhibited by training interventions, trainers, trainees, and those influencing training or the application of skills and knowledge in the workplace all impact on the experience and impact of the training intervention. The resulting ‘‘bouillabaisse’’ is not readily amenable to aggregation and disaggregation into identifiable and measurable factors. Not only are there differences between large and small employers but also between firms operating in different sectors and markets and differences between different types and levels of management within the same organisation. It is suggested that only those persons immediately affected by organisational events have sufficient knowledge of the precise circumstances to be able to suggest cause and effect relationships or assess the value of interventions (Jennings and Beaver, 1997). However there may be multiple interpretations within an organisation which are difficult to capture in a survey of this type. The MD’s view of the effectiveness of the training may be very different from the view of the line manager or the trainees themselves. Furthermore views of the effectiveness of the training intervention may differ between trainees themselves. In conclusion, this paper represents a first stage analysis of a complex issue. We have used relatively simple concepts and measures of management and workforce involvement in the SME context to reveal aspects of the complexity of workplace learning. The application of more sophisticated statistical techniques may provide further insights and take account of the multiple factors impacting on the value attributed to, and the nature of training interventions. However further analysis in this instance is inhibited by the relatively small sample size of the survey. Further avenues of enquiry are open to us through investigation of the survey responses from a parallel survey of individuals involved in the training interventions. However the need for in-depth case study research to gain a better understanding of the nature and

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complexities of training in the small business context remains paramount if we are to better understand the impact of engaging SME managers and their employees in training and to use this knowledge to design and deliver improved training interventions.

Note 1 Managers are defined as owner-managers, managing directors or senior members of the management team.

References Ashton, D. and Felstead, A. (1998), ‘‘Organisational characteristics and skill formation in Britain: is there a link?’’, paper presented at the Work, Employment and Society Conference, University of Cambridge, Cambridge, 14-16 September. Beaver, G. and Lashley, C. (1998), ‘‘Barriers to management development in small hospitality firms’’, Journal of Strategic Change, Vol. 7, pp. 223-35. Black and Lynch (1996), ‘‘Human capital investments and productivity’’, American Annual Review, Vol. 86 No. 2, pp. 263-7. Cosh, A. and Hughes, A. (Eds) (1998), Enterprise Britain, ESRC Centre for Business Research, University of Cambridge, Cambridge. Cosh, A. and Hughes, A. (2000), British Enterprise in Transition. Growth, Innovation and Public Policy in the Small and Medium Sized Sector 1994-1999, ESRC Centre for Business Research, University of Cambridge, Cambridge. Cully, M., Woodland, S., O’Reilly. A. and Dix, G. (1999), Britain at Work as depicted by the 1998 Workplace Employee Relations Survey, Routledge, London. Devins, D., Johnson, S. and Bolam, F. (2001), Adapting to Change: An Evaluation of the ESF Objective 4 Programme in Britain (1998-2000), Department for Education and Skills Research Report RR288, Nottingham. DfEE (2000), Skills For All: Proposals for a National Skills Agenda, Final Report of the National Skills Task Force, Prolog. Down, S. (1999), ‘‘Owner-manager learning In small firms’’, Journal of Small Business and Enterprise Development, Vol. 6 No. 3, pp. 267-78. DTI/DfEE (2001), Opportunity For All. A White Paper on Enterprise, Skills and Innovation, Cm 5052, The Stationery Office, London. Fryer, R.H. (1999), Creating Learning Cultures: Next Steps in Achieving the Learning Age, Second Report of the National Advisory Group for Continuing Education and Lifelong Learning, NAGELL, DfEE, Sheffield. Gibb, A.A. (1997), ‘‘Small firms training and competitiveness: building upon the small business

as a learning organisation. International Small Business Journal, Vol. 15 No. 3, April-June. Green, F. (1997), Review of Information on the Benefits of Training for Employers, DfEE Research Report No 7. London. Guest, D. (1987), ‘‘Human resource management and industrial relations’’, Journal of Management Studies, Vol. 24 No. 5, pp. 503-22. Hendry, C., Jones, A., Arthur, M. and Pettigrew, A. (1991), Human Resource Development in Small Organisations, Department of Employment Research Paper No 88 Hill, R. and Stewart, J. (1999), ‘‘Human resource development in small organizations’’, Human Resource Development International, Vol. 2 No. 2, pp. 103-23. HM Treasury (2000), Productivity in the UK: The Evidence and the Governments Approach, available at: www.hm-treasury.gov.uk. (accessed February 2001). IFF (2000), Learning and Training at Work 1999, Department for Education and Employment Research Report RR202, DfEE, Nottingham. Jennings, P. and Beaver, G. (1997), ‘‘The performance and competitive advantage of small firms: a management perspective’’, International Small Business Journal, Vol. 15 No. 2, pp. 63-75. Johnson, S. (1999), Skills Issues for Small and Medium Sized Enterprises, Skills Task Force Research Paper 13, DfEE Publications, Nottingham. Johnson, S. and Gubbins, A. (1992), ‘‘Training in small and medium-sized enterprises: lessons from North Yorkshire’’, in Caley, K., Chell, E., Chittenden, F. and Mason, C. (Eds), Small Enterprise Development. Policy and Practice in Action, Paul Chapman Publishing, London. Johnson, S., Campbell, M. and Devins, D. (2000), Learning Pays: The Bottom Line, the National Advisory Council for the Education and Training Targets (NACETT), Ref NTET 32. Prolog, Suffolk. Keep, E. (1999), Employer attitudes Towards Adult Training, Skills Task Force Research Paper No 15, DfEE, Nottingham. Perren, L. (1999), ‘‘Employment creation and small firms: reflections on lone Henriksen’s keynote address’’, Journal of Small Business and Enterprise Development, Vol. 6 No. 3, pp. 219-27. Ram, M. (2000), ‘‘Investors in people in small firms: case study evidence from the business services sector’’, Personnel Review, Vol. 29 No. 1, pp. 69-91. Stern, E. and Sommerlad, E. (1999), Workplace Learning, Culture and Performance, Institute of Personnel and Development, London. Storey, D. and Westhead, P. (1994), ‘‘Management training and small business performance: why is the link so weak?, International Small Business Journal, Vol. 14 No. 4, pp. 13-24. Vickerstaff, S. and Parker, K.T. (1995), ‘‘Helping small firms: the contribution of TECs and LECs’’, International Small Business Journal, Vol. 13 No. 4, pp. 56-72.

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Introduction

Innovation and education policy in SMEs: a Czech perspective Lester Lloyd-Reason Karel Muller and Stuart Wall The authors Lester Lloyd-Reason is a Reader in International Enterprise Strategy and Stuart Wall is a Senior Lecturer in Economics, both at Anglia Polytechnic University, Cambridge, UK. Karel Muller is Professor of Sociology at Charles University, Prague, Czech Republic. Keywords Education, Training, Knowledge workers, Innovation, Small- to medium-sized enterprises, Czech Republic Abstract After considering the various dimensions of innovation policy, this paper reviews the experiences of the Czech Republic (CR) in implementing such policies in the post1990 transition period. Particular attention is paid to the contribution of small and medium-sized enterprises (SMEs) in innovation activities and to the various direct and indirect measures used by the CR in their support. The paper also focuses on the education and training issues and policy prescriptions deemed most appropriate to medium-term goal setting in the CR. It is noted that in order for such education and training policies to be effective, they must be informed by a number of wellestablished patterns and trends within globalised, knowledge-based economies as well as by the particular circumstances faced by the CR or other transition economies. Electronic access The research register for this journal is available at http://www.emeraldinsight.com/researchregisters The current issue and full text archive of this journal is available at http://www.emeraldinsight.com/0040-0912.htm

Education + Training Volume 44 . Number 8/9 . 2002 . pp. 378–387 # MCB UP Limited . ISSN 0040-0912 DOI 10.1108/00400910210449213

Innovation is a somewhat elusive concept, often loosely associated with new or improved products and processes. More rigorous definitions focus on radical departure rather than incremental change, as with Mintzberg’s (1983) definition of innovation as ‘‘the means to break away from established patterns’’. Schmookler (1996) links innovation explicitly to technical change: ‘‘The first enterprise to make a given technical change is an innovator. Its action is innovation.’’ In fact growth theorists (see, for example Maddison, 1987; Solow, 1955) have for some time seen technical change and innovation as inextricably linked, together helping account for the observed and positive discrepancy (‘‘residual’’) between rates of change of GDP and rates of change of factor input (capital, labour) in time series analysis. Schumpeter (1942) took a similar stance, seeing innovation as part of the trilogy of activities subsumed within the process of technological change: namely invention, innovation and diffusion. Invention is the creation of new ideas or of technological knowledge; innovation the process by which the idea or knowledge is converted into marketable products or productive techniques; and diffusion the routes and time profile by which the innovation is adopted by others. Schumpeter regarded technological innovation as the source behind the long wave (50 year) cycles identified by Kondratief in 1925. Schumpeter saw the market mechanism as fostering innovation by rewarding, via enhanced profits, those entrepreneurs who initiate innovation, whether in terms of new products, processes, markets, sources of raw material or types of industrial organisation. However imitation would progressively reduce the return to innovators, competing away any excess profits until some new ‘‘wave’’ or cluster of economic activities emerges to reinvigorate the innovative process. Indeed Schumpeter believed that larger firms would have a competitive advantage over SMEs in terms of innovation precisely because they would be better able to erect entry barriers to deter such ‘‘imitation’’. Any ‘‘excess’’ profits from earlier innovations could then be preserved over longer time periods by larger firms, serving as an attractive source of internal finance for reinvestment in

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ongoing R&D and other innovative activities. Galbraith (1952) concurred with this view, believing innovation to be so costly that only larger firms with significant resources could effectively engage in this activity. Vossen (1998) usefully reviews the arguments for and against the existence of substantial scale economies in innovative activities. Indeed the countervailing perspective would seem to be gathering strength, namely that SMEs are disproportionately responsible for significant innovations. Acs and Audretsch (1990, 1991) found that small firms in the USA contributed some 2.4 times more innovations per employee than larger firms and in their 1991 study concluded that ‘‘ . . . empirical evidence suggests that decreasing returns to R&D expenditure in producing innovative output exists’’. These findings are in line with the work of Rothwell (1985, 1989) and Rothwell and Dodgson (1994). Rothwell (1985) had concluded that ‘‘ . . . the relative strengths of large businesses are predominantly material . . . while those of small firms are mostly behavioural (entrepreneurial dynamism, flexibility, efficiency, proximity to the market, motivation).’’ Vossen (1996) broadly agrees, finding smaller firms to be more profit/cost efficient in innovation. Zenger (1994) takes a more balanced perspective, seeing neither small nor large firms as better innovators per se, rather acknowledging that different sized firms may be better suited to certain types of innovation. For example small firms are likely to have a competitive advantage in innovations which depend on flexibility and proximity to market demand, which involve ‘‘spillover’’ applications of knowledge breakthroughs derived from larger firm R&D activities and which can be utilised in small scale commercial applications. Of course from a policy perspective, a key issue is whether innovative activities, whatever their particular form and the size of firm from which they originate, must be regarded as random events or whether they are capable of being induced proactively by governmental intervention. Drucker (1985) certainly adhered to the latter view, seeing innovation as ‘‘ . . . capable of being presented as a discipline, capable of being learned and capable of being practised’’. It is now widely recognised that government policies can influence the incentives and

opportunities for innovative activity in a wide variety of ways. Such governmental influence may be to some extent indirect (though no less important), as in establishing the education and skills base, the macroeconomic context or the legal, proprietary framework. On the other hand direct innovation policy may take the form of governments seeking to increase the stock of knowledge, as in the case of R&D assistance or incentives, or to improve the effectiveness of its application and dissemination, as in the case of policies seeking to improve the transfer and diffusion of technology. This paper seeks to review lessons learned in the field of innovatory policy from the experience of the Czech Republic. Particular attention will be paid to the transition period post 1990, to the role of SMEs within the innovative process and to the education and training policies best suited to supporting that role.

SMEs and innovation policies in the Czech Republic The importance of SMEs within the industrial sector of the Czech Republic (CR) is indicated in Table I, with some 56 per cent of workers in firms with less than 500 employees, contributing around 46 per cent of total turnover. Whilst indicative, Table I is not strictly comparable with the more usual EU definition of SMEs as having less than 250 employees. In addition Table I captures only industrial production and faces the problem, at least as regards turnover data, that many of the outputs of smaller firms occur within the ‘‘informal economy’’, thereby understating their true turnover and GDP contribution. Expert assessments within the Czech Republic suggest that enterprises with fewer than 250 employees account for between 50-60 per cent of total employment across all sectors and produce some 45-55 per cent of GDP (Benacek, 2001). Nevertheless concern has been expressed that the positioning of SMEs in the Czech Republic during the early years of the transition period has inhibited their contribution to the innovative process. Muller (2001) points out that a large proportion of Czech SMEs are still dependent on the somewhat precarious existence of vestigial large-scale enterprises from the command

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Table I Industrial production by size of firm (current prices (1998) and number of employers (%)) Size of firm by employees

CZKbn

Up to 19 20-99 100-499 500-999 1,000-1,999 2,000-4,999 5,000+ Total industry

198.1 225.6 430.7 222.1 305.9 195.8 289.1 1,867.3

Sales Index 1998/1997 Share (%) 106.0 108.6 110.9 107.8 108.6 103.6 105.4 107.7

10.6 12.1 23.0 11.9 16.4 10.5 15.5 100.0

Average number of employee Average monthly wage Thous. Index Index 1998/ persons 1998/1997 Share (%) CZK 1997 164 250 400 175 184 136 149 1,458

104.8 106.0 99.3 93.7 96.1 94.9 92.5 98.6

11.2 17.1 27.6 12.0 12.6 9.3 10.2 100.0

9,747 10,401 11,106 11,810 12,313 12,511 15,231 11,623

108.3 108.1 110.5 110.7 112.6 112.0 112.6 110.2

Source: Czech Statistical Office (2000)

economy period. Even those SMEs established during the liberalised post-1990 reform period in response to perceived deficiencies in the ability of the planned economy to meet local and regional demands, have faced an insecure future. In a liberalised and globalised environment their competitive advantages have often been rapidly eroded by both domestic and transnational firms. Nor has their plight been eased by governmental supports in the form of subsidies and reliefs: for example Benacek (2001) estimated that SMEs received only 25 million CZK in state support during the 1990s as compared with 400 million CZK received by larger firms, despite SMEs being responsible for a broadly equivalent proportion of GDP. In the latter part of the 1990s the government has, however, sought to implement policies aimed at both increasing support for SMEs and enhancing their role in the innovative process. Industrial zones Greater attention and support has been given to the establishment of industrial zones throughout the economy since 1998. In the early 1990s such zones had been established in only a few sites, geographically adjacent to the major markets of Austria and Germany – frontier regions notoriously short of qualified manpower given the attraction of these foreign labour markets. Now up to 60 per cent of the costs involved in the construction of the infrastructure for such industrial zones is available to municipal authorities throughout the Republic, with a variety of additional state subsidies and reliefs provided in support of private firms and public bodies operating in those zones. Table II outlines some of the characteristics and the estimated

Table II Development of industrial zones in the CR Sum of the announced direct investments into production Number of announced new jobs Support from state budget Support from municipal funds Utilisation rate of industrial zones (%) Notes: (1998-2000, million of CZK/EURO) Source: CzechInvect (www.czechinvest.org)

impacts of these industrial zones over the period 1998-2000. Over the period 2000-2005 a further 2,700 million CZK (77 million Euro) has been budgeted for industrial zone support, the intention being to increase the modest 41 per cent utilisation rate shown in Table II for established zones whilst also developing new zone locations. New business start ups Historically there would seem to be a broadly favourable environment for new business start-ups in the Czech Republic. Some 13.9 per cent of total businesses were designated ‘‘start ups’’ in 1998 (Muller, 2001), a much higher proportion than that recorded for most other transition economies. Whilst admittedly attracting inward foreign direct investment (FDI), industrial zones are also intended to support and encourage new business start-ups by indigenous firms. A wide variety of governmental subsidies and reliefs from both Czech and EU sources to encourage entrepreneurship and new business start-ups are reviewed in Table III. As well as the private banks and the Czech-Moravian Guarantee and Development Bank, wellfocused investments in SMEs have been sourced from venture capital providers,

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47,863/1,367 12,856 602/17.2 638/18.2 41.0

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Table III Main initiatives taken in favour of start-ups Organisation

Objectives

Czech-Moravian Guarantee and Development Bank

Programs ‘‘Start’’, ‘‘Region’’

Czech-Moravian Guarantee and Development Bank Ministry of Industry and Trade Czech Innovation Relay Centre

Ministry of Industry and Trade

Target audience

Enterprising projects for metallurgy Subsidies (repayable), Lower interest sector, lagging regions rates Subsidies (repayable) or 50 per cent Program ‘‘Market’’ SMEs of costs for attainment of ISO Establishment of industrial zones Municipal authorities Subsidy for construction of infrastructure EU funds, domestic funds Improve competitiveness, domestic and BIC, SMEs, R&D organisations foreign technology transfer and domestic R&D results Development of industrial zones Municipalities of city and region, State subsidy, EU funds private firms (developers)

Funds for Risk Capital (Foundation for Development of Regions) Support of start-ups of SMEs by venture capital Czech Venture Partners

Type of funding

SMEs

Support of start-ups with dynamic Domestic firms growth and clear pattern of governance

especially Czech Venture Partners and the Fund for Risk Capital, using Czech government and EU monies. Even when it has been the foreign owned firms that have taken advantage of these government initiatives, the innovative potential of Czech firms may still have been enhanced. Biegelbauer et al. (2000) point to considerable spillover effects of inward FDI in favour of training, R&D activities and product development in associated domestic firms and local labour markets. Inter-firm co-operation Innovative activity by SMEs is being fostered by governmental programmes to support subcontracting and other methods of inter-firm co-operation. The initiatives involved include measures to support: . technological upgrading of product and processes in SMEs delivering products, components and services to larger (Czech and foreign owned) firms; . information exchange, the formation of databases on available suppliers in the CR, and the provision of standardised schemes to support employee training and sales/marketing initiatives. Reorientation of R&D policy SMEs and larger firms in the CR have benefited from the changing focus of government R&D policy since the mid 1990s.

Investors: Ministry of Regional Development, EU delegation (Phare funds) Investors: Ministry of Regional Development, private banks

In the first half of the 1990s the broadly ‘‘science push’’ R&D model ensured that 95 per cent of state R&D funds were allocated directly to research activity and its associated infrastructure in the various publicly funded institutes and universities, with only 5 per cent used in support of new product development within the business enterprise sector (BES). In the latter part of the 1990s an increasing proportion of these state R&D funds have been allocated to activities at the interface between R&D activity itself and the industrial/commercial sector. Indeed applications for R&D grants are increasingly assessed in terms of the relevance of the particular research oriented project for industrial/commercial application (patents, new products, new processes etc.). This increasingly innovation directed funding is to occur within an expanding R&D budget. For example Resolution No. 249 in 1999 was extended to cover the years 20002002, with public R&D funding budgeted to grow from 0.6 per cent of GDP in 2000 to 0.7 per cent of GDP in 2002 (having averaged only 0.5 per cent of GDP over the years 1997-1999). Table IV reviews a variety of governmentfunded agencies, their responsibilities and activities in the R&D related area. Table V provides more detail on the major government-funded programmes to support innovation in the CR.

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Table IV Government funded agencies Organisation

Status

Responsibilities

Council of Government of CR for Executive body Research & Development Grant Agency (GA) of CR Public body Academy of Science (AS)

Coordination of R&D funded by state Advisory body, improving coordination of R&D funded by state Distribution of public (state) R&D Quality control of R&D by excellence funds Promotion of basic research in (28) Promotion of research in key science selected areas via GA or AS disciplines Responsible for a part of academic 1 articulation of concepts of state science which is carried out at R&D policy; 2 coordination of international R&D faculties of HE cooperation; 3 promotion of R&D at HE via specific programs Various programsa: ‘‘Export’’, ‘‘Centres’’, ‘‘Technos’’, ‘‘Stratech’’ Specific GAs or R&D programs Important R&D capacities are supported by Ministry of Agriculture, Ministry of Health and Ministry for Environment

Public body

Ministry of Education, Youth and Executive body Sports

Ministry of Industry and Trade

Executive body

Other ministries

Executive bodies

Note:

a

Assessment

See Table V

Table V Major government funded programmes and initiatives in favour of innovation Name of programme

Responsible body

Objective

Sources of funding

EXPORT

Ministry of Industry & Trade

STRATECH

Ministry of Industry & Trade

50 per cent – public (subsidy/five-year loan); 50 per cent – BES 50 per cent – public (subsidy/five-year loan); 50 per cent – BES

CENTRES

Ministry of Industry & Trade

TECHNOS

Ministry of Industry & Trade

PARK

Ministry of Industry & Trade

Support of competitive capacities of domestic industries Support of development and diffusion of key technologies in the field of defence & state security technologies Support of competitive products and technologies Support of SMEs and their technological capacities Foundation, operation and development of Scientific and Technological Parks

Education and training initiatives Some of these have already been mentioned above. However a particular focus has been the development of innovation management technique (IMT) courses explicitly directed towards engendering more entrepreneurial approaches in the CR. IMT courses have been introduced explicitly into the curricula of leading universities, especially their economic engineering and technological faculties. Table VI outlines some of the initiatives used in support of human resource development for innovation. Attempts are also being made to raise the general awareness of contemporary management practices in SMEs as well as in larger firms. For example progress is being made in terms of the diffusion of total quality

50 per cent – public (subsidy/five-year loan); 50 per cent – BES 50 per cent – public (subsidy/ loan – max. 9 mil. Ke` for five years); 50 per cent BES 25-50 per cent public (subsidy) loan – max. 9 mil. CZK

management (TQM) techniques with over 2,000 Czech firms having been awarded ISO certificates. The implications of an increasingly globalised and knowledge-based international framework for education and training initiatives in the Czech Republic are reviewed further at the end of this paper. Macroeconomic context It is widely recognised that the prospects for innovation amongst SMEs and larger firms alike are closely correlated with the macroeconomic environment in which these firms operate. A variety of government decrees and acts have sought to stimulate activity within the economy as a whole, including inward FDI. For example the

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Table VI Main initiatives taken in favour of human resources development for innovation Responsible organisation

Objectives

Ministry of Industry and Trade

Resolution of Government No. 562, Training and education of 9.6 1999 for support of SMEs entrepreneurs of SMEs in innovation White book – national program Primary, secondary, tertiary of education education; adult education Unemployed Resolution of Government No. 418, 5.5 1999, National Plan of Employment

Ministry of Education, Youth and Sport Government

Target

January 2000 Act offered a number of broad based investment and FDI incentives: . Corporate tax relief of ten years for new companies and five years for existing companies seeking to expand. New enterprises will be able to receive a full corporate tax discount for ten years from the start of production and existing enterprises seeking to expand will be able to receive a partial corporate tax relief for five years. . Financial support for creation of new jobs. In regions with a high unemployment rate, job creation grants are to be offered. The grants differ according to the unemployment rate in the specific region and can reach up to CZK 200,000 (approximately US$5,500) per each new job created. . Financial support for training employees (up to 35 per cent of total training costs). Training and retraining grants are to be offered in regions with high unemployment rates which may cover up to 35 per cent of the total training costs in those regions experiencing the highest rates of unemployment. . Location incentives. The provision of lowcost land as well as subsidies for the development of infrastructure on sites where production is to be located.

Fostering innovative activities A number of mechanisms and policies for increasing innovative activities in the CR, especially in the SME context, would suggest themselves from this review. Innovation may be best supported by indirect measures in the form of additional grants, subsidies and tax reliefs being made available to SMEs and especially technology based SMEs. The focus should increasingly

Funding Public, Phare (EU)

Public Public, Phare (EU), Private

be on the interface between R&D and the business economic sector, rather than ‘‘directly’’ on the R&D activity itself. Indeed firms and institutions seeking R&D grants and other government reliefs and subsidies should be assessed primarily in terms of the relevance of the particular research oriented project for industrial/commercial application, as evidenced by outcomes such as patents, new products, new processes, etc. SMEs and the majority of CR firms must ultimately depend on the market mechanism for creating both the opportunities and threats underpinning innovative activities. Whilst the work of the Revitalisation Agency has been important in restructuring the ten or so largest and most heavily indebted CR companies over the period 1999-2002, the prospects for SMEs are more closely connected with prospective changes in the legal and regulatory framework. For example it has been suggested (OECD, 2000a) that the most important boost to entrepreneurial and innovatory activity could lie in reforming the statutes and enforcement provisions surrounding bankruptcy legislation in the CR. Currently creditor rights are poorly protected, contributing to the growing reluctance of private banks to provide new loans to companies seeking to expand. New laws are being enacted to curtail the ability of debtors to asset-strip during bankruptcy proceedings and to provide greater opportunities for both creditors and debtors to engage in corporate restructuring (‘‘workout bankruptcies’’) alongside any ongoing court procedures. The legal and regulatory framework might also be adjusted to simplify and encourage more start-up activity in the CR. Greater regulatory stability would be particularly helpful in this respect: e.g. the Tax Law was amended four times in 1999 and the Business Code no less than six times in 2000. Such uncertainty invariably has an adverse effect on

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innovatory activities. Adjustment to CR domestic accounting standards may also help stimulate R&D activity. Currently R&D results are treated as a fixed asset which, given the long time span between outlay and effect, has resulted in firms funding their R&D and innovation from profit. Appropriate adjustments to the CR regulatory and accounting frameworks can help obviate this problem. Specific programmes (e.g. ‘‘Technos’’, ‘‘Park’’) supporting innovative activities in SMEs, with clearly defined short and medium term objectives, would seem to be having positive results, as are similar programmes aimed at fostering research and innovative applications in larger firms (‘‘Stratech’’, ‘‘Centres’’). Of particular importance has been the sub-contracting programme organised by CzechInvest (Ministry of Industry and Trade) and running since 1999. Enhanced networks from such programmes have helped support inward FDI and the upgrading of products and processes in domestic (CR) suppliers. Closer linkages with foreign firms have been widely advocated as a key factor in supporting domestic CR innovations. For example a study of the manufacturing sector over the 1993-96 period found that enterprises in which foreign stakeholders were in the majority had productivity levels twice those of domestic firms, invested five times more per employee, exported one-third more and were more profitable (Zemplinerova, 1998). This shift towards a more strategic approach to supporting innovation and enterprise in SMEs within the CR is usefully exemplified by the ‘‘Resolution in support of enterprise in SMEs’’ [No. 562, 1999], which sought to make explicit the short and medium term goals to 2002 and the ways in which these could be attained. Short-term goals focused on the improved access of SMEs to venture capital and credits, protection against unfair competition, simplification of accounting standards and conventions, the more favourable tax treatment of innovations and the creation of new industrial zones. Medium-term goals included improvements to education and training policies, to the legal framework, to statistical surveying (e.g. adoption of standardised statistical approaches to innovative activities, as with the OECD Frascati Manual on R&D) and the preparation of SMEs for EU entry (Politika,

2000). This more strategic and policy oriented approach to supporting innovative activities in the important SME sector arguably gives a more credible context for growth in innovation-related activities in the CR. The final section of this paper reviews the implementation of one such medium-term goal directed towards innovative activity in the Czech Republic – namely education and training policy.

Education, training and innovative activity in the Czech Republic A number of policy initiatives aimed at aligning education/training policies with innovative activities have already been outlined. Table IV outlines various programmes and initiatives supporting R&D in the various publicly funded institutes and universities. Such funding was to take a higher proportion of GDP and to be progressively directed towards projects with clearly identified commercial outputs, such as patents, new products and new processes. In addition a variety of educational initiatives at lower levels of educational attainment were reviewed in Table VI, including courses explicitly directed towards fostering more entrepreneurial approaches within SMEs in the Czech Republic. However whilst targeted goal setting has obvious attractions, for such targets to be effective they must be constructed in the broader context of a globalised, interdependent economic framework as well as that of the Czech Republic itself. For example some recent major reports (World Economic Outlook, 2001; World Employment Report, 2001) have identified the increasing importance of information, communication and telecommunications (ICT) technologies to innovation, economic growth and employment patterns in modern economies. A number of labour market impacts of ICT within increasingly knowledge-based societies were identified by these reports as having important implications for education and training policies. . A change in the patterns of employment with ICT developments increasing the demand for highly skilled workers who can push forward the technological frontier and make the new technology

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.

.

.

.

accessible to the rest of the workforce. Less skilled, repetitive occupations in both manufacturing and service sectors (e.g. offices) tend to be replaced by ICT, with fewer, more highly skilled workers remaining. A greater geographical dispersion of employment as work becomes progressively less dependent on specific locational factors (e.g. increased ‘‘outsourcing’’ of work to lower labour cost economies, growth in work from home). A shift in employment towards smaller, less established firms and new entrants via ‘‘leapfrogging’’, which in this context refers to the opportunities inherent in the new ICT technologies for SMEs and new entrants to bypass extensive earlier investments by rivals in terms of the time or cost of innovative developments. A more highly skilled and better-educated workforce required within economies which now depend less on physical inputs than on knowledge. A shift in the focus of education and training to foster generic skills, with individuals no longer seen as passive recipients of facts but as active, lifelong learners. The ability at all levels of expertise to learn new approaches and transform existing knowledge into new knowledge becomes still more important in work environments that rely increasingly on rapid innovation and on the interpersonal exchange and creation of knowledge.

Forray and Lundvall (1996) propose a classification of ‘‘types’’ of knowledge which is particularly useful when reviewing education/ training goals in knowledge-based societies: . knowing what: procedural knowledge which involves the transfer of codified knowledge into facts; . knowing why: cognitive knowledge involving an understanding of basic principles, rules and ideas; . knowing how: knowledge that derives from direct experience or ‘‘know how’’; . knowing who: knowledge that involves the ability to communicate and work in teams. The World Employment Report (2001) suggested that procedural knowledge, i.e. knowledge about facts, is becoming

progressively less important in the modern, information-rich economies. The emphasis is switching towards knowing why and understanding the basic principles which can then be applied flexibly to a range of new situations. The increased importance given to such cognitive knowledge and to the skills needed for its acquisition, are placing education and lifelong learning at the centre of governmental policy initiatives in modern economies. As the World Employment Report observes, increased emphasis must now be placed on ‘‘ . . . a variety of foundation skills, such as the ability to learn, to communicate and to analyse and solve problems, all of which are essential to work environments that rely on rapid innovation, and the interpersonal exchange and creation of knowledge’’ (World Employment Report, 2001, p. 10). Any attempt to overly prescribe educational and training policies for individual countries is, of course, fraught with dangers. Nevertheless Luthans et al. (2000) firmly advocate the need for formal entrepreneurial training and educational opportunities to be provided in the transition economies. Such a proactive stance by governments is seen as a means of supporting and directing a range of intentional entrepreneurial experiences involving purposive and volitional goal-bound activities toward entrepreneurial development. They note that, if executed successfully, these experiences will lead to an increase in entrepreneurial self-efficacy and help avoid an excessive dependence on external and often non-intentional attributions (e.g. having the right connections). Social cognitive theory suggests that reliance on such external attributions is far less likely to translate into higher selfefficacy (Stajkovic and Sommer, 2000). What, then, are the elements that might be considered for inclusion in a proactive education and training policy by transition economies seeking to position themselves to take full advantage of the opportunities provided by an increasingly knowledge-based global society? Broad-based literacy initiatives A well-educated workforce has been shown to be a prerequisite for harnessing the use of ICT technologies in developing countries such as India, the Philippines and elsewhere. However many of the statistical relationships

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established often identify broad-based initial levels of educational attainment as the key independent variable. For example differences in school enrolment (per cent of school-age children actually attending school) are closely correlated with various indicators of ICT usage. A major report of the International Labour Office (2000) found a close and positive correlation (r = 0.77) between the percentage of school enrolment and the number of Internet hosts per 1,000 population. A survey of OECD and Central European Countries (Hudson, 2001) found that, in 14 out of 20 countries surveyed, at least 15 per cent of adults had only ‘‘literary skills at the most rudimentary level, making it difficult to cope with the rising demands of the information age’’. In the countries surveyed, from one-quarter to an astonishing threequarters of the adult population failed even to meet the literacy standard of Level 3, defined as the minimum for coping with the demands of modern life and work, i.e. capable of participating fully in the knowledge and information society. Curriculum content Throughout the curriculum attention needs to be given to the acquisition of the more cognitive skills of knowing why and how to learn, rather than fact based procedural knowledge. Transition economies must clearly seek to bring the types of knowledge conveyed explicitly and implicitly throughout the curriculum and at all educational levels into line with the needs of modern knowledge-based societies. Overcoming the digital divide Access to ICT technologies at home and work remains restricted to the more educated and higher income groups in most countries, whether developed or in transition. For example households with a ‘‘head of household’’ possessing a university degree in Canada were more than twice as likely to regularly use a computer than in cases where the head of household had only completed secondary education (OECD, 2000b). Although by no means a panacea, increasing Internet connectivity in schools, colleges and community centres has been an important policy mechanism for overcoming this digital divide in developed and transition economies. Estonia achieved 100 per cent connectivity in

its school system in 2000, with Chile meeting the same criterion in 2001 for its secondary schools, though primary schools lag behind at around 50 per cent. Of course Internet connectivity per se is an imperfect indicator! For example although all Portuguese schools have been connected to the Internet with the help of EU funding since 1998, actual access is restricted by the high number of students per computer (around 40 students per computer in 1998 for secondary schools and over 100 students per computer for primary schools). Skills training and lifelong learning It has been pointed out that by 2010, over 80 per cent of the workforce in the EU will have received their formal education and training at least a decade earlier. In a rapidly evolving ICT context, the ability of workers to find and retain a job will increasingly depend on their possessing appropriate ‘‘foundation skills’’ that are transferable in terms of job flexibility and which can be regularly updated. These ‘‘foundation skills’’ must, of necessity, extend beyond those required in the ICT sector itself, which employs less than 5 per cent of the workforce across most OECD countries. Clearly a key policy focus must entail the provision of adequate numbers of those with these skills, which include the ability to learn, to communicate and to analyse and solve problems.

References Acs, Z.J. and Audretsch, D.B. (1990), Innovation and Small Firms, The MIT Press, Cambridge, MA. Acs, Z.J. and Audretsch, D.B. (1991), ‘‘R&D, firm size and innovative activity’’, in Acs, Z.J. and Audretsch, D.B. (Eds), Innovation and Technological Change, Harvester Wheatsheaf, London. Benacek, V. (2001), ‘‘Lost changes in small and medium enterprising’’, Hosoda´rske´ Noviny, 15 March. Biegelbauer, P., Griessler, E. and Leuthold, M. (Eds) (2000), The Impact of FDI on the Knowledge Base of CEE Countries, Institute for Advanced Studies, Political Science Series, No. 77, Vienna. Czech Statistical Office (2000), Statistical Yearbook 1999, Czech Statistical Office, Prague. Drucker, P. (1985), Innovation and Entrepreneurship, Heinemann, London. Forray, D. and Lundvall, B.A. (1996), Employment and Growth in the Knowledge-based Economy, OECD, Paris. Galbraith, J.K. (1952), American Capitalism, Houghton Mifflin, Boston, MA.

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Hudson, H. (2001), ‘‘The potential of ICT’s for development: opportunities and obstacles’’, background paper for the World Employment Report 2001, available on the CD-ROM of the Report pp. 24-5. International Labour Office (2000), ‘‘Globalisation Europe: decent work in the information economy’’, Report of the Director General to the Sixth European Regional Meeting, Geneva, December. Luthans, F., Stajkovic, A. and Ibrayeva, E. (2000), ‘‘Environmental and psychological challenges facing entrepreneurial development in transitional economies’’, Journal of World Business, Vol. 35 No. 1. Maddison, A. (1987), ‘‘Growth and slowdown in advanced capitalist economies’’, Journal of Economic Literature, Vol. 25 No. 2, pp. 649-98. Mintzberg, H. (1983), Structures in Fives: Designing Effective Organisations, Prentice-Hall, London. Muller, K. (2001), ‘‘National innovation policy profile: Czech Republic’’, Innovation Policy in Six Applicant Countries: the Challenges, Charles University, Prague, May. OECD (2000a), Economic Surveys, Czech Republic, February. OECD (2000b) Literacy in the Information Age, OECD, Paris. Politika (2000), ‘‘Policy of fostering SME enterprise over the years 1999-2002’’, Information Bulletin, Ministry of Industry and Trade, Prague. Rothwell, R. (1985), Innovation and the Smaller Firm, First International Technical Innovation and Entrepreneurship Symposium, Utah Innovation Foundation, Salt Lake City, UT. Rothwell, R. (1989), ‘‘Small firms, innovation and industrial change’’, Small Business Economics, Vol. 1, pp. 51-64.

Rothwell, R. and Dodgson, M. (Eds) (1994), ‘‘Innovation and size of firm’’, The Handbook of Industrial Innovation, Edward Elgar, Aldershot. Schmookler, J. (1996), Invention and Economic Growth, Harvard University Press, Boston, MA. Schumpeter, J.A. (1942), Capitalism, Socialism and Democracy, Harper & Row, New York, NY. Solow, R.M. (1955), ‘‘Technical change and the aggregate production function’’, Review of Economics and Statistics, Vol. 39, pp. 312-20. Stajkovic, A. and Sommer, S. (2000), ‘‘Self-efficacy and casual attributions: direct and reciprocal links’’, Journal of Applied Social Psychology. Vossen, R.W. (1996), R&D Decisions, Firm Size, and Market Structure, Capelle a/d Ijssel, Labyrint Publication, Ijsell. Vossen, R.W. (1998), ‘‘Relative strengths and weaknesses of small firms in innovation’’, International Small Business Journal, Vol. 16 No. 3, Issue No. 63, April-June. World Economic Outlook (2001), ‘‘The information technology revolution’’, International Monetary Fund, October. World Employment Report (2001), ‘‘Life at work in the information economy’’, International Labour Office, Geneva. Zemplinerova, A. (1998), ‘‘Impact of FDI in the restructuring and growth in manufacturing’’, Prague Economic Papers, Quarterly Journal of Economic Theory and Policy, Vol. VII, December. Zenger, T.R. (1994), ‘‘Explaining organisational diseconomies of scale in R&D: agency problems and the allocation of engineering talent, ideas, and effort by firm size’’, Management Science, Vol. 40 No. 6, pp. 708-29.

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Introduction

Do they or don’t they? A comparison of traditional and discourse perspectives of HRD in SMEs Clare Rigg and Kiran Trehan

The authors Clare Rigg is Senior Lecturer and Kiran Trehan is Head of Division of Management, both at the Centre for Action Research and Learning (CARL), Business School, University of Central England, Birmingham, UK. Keywords Human resource development, Management, Training, Learning, Small- to medium-sized enterprises Abstract Understanding of HRD in SMEs has frequently been based on impoverished research resulting from underdeveloped theory. This article argues for the potential offered to researching, understanding and practising HRD in small organisations, of taking a discourse perspective on organisation, learning and development. Through a comparative interpretation, from a traditional and a discourse perspective on HRD, of research material collected ethnographically in three small companies, the article aims to contribute to an approach which can deepen understanding of HRD in SMEs by combining three strands that have not generally been integrated: ideas from recent debates on what HRD comprises, perspectives on learning, and a discourse perspective on organisation. The implications for research indicate a need for methods that enable the study of HRD in action – the micro-processes of development. Electronic access The research register for this journal is available at http://www.emeraldinsight.com/researchregisters The current issue and full text archive of this journal is available at http://www.emeraldinsight.com/0040-0912.htm Education + Training Volume 44 . Number 8/9 . 2002 . pp. 388–397 # MCB UP Limited . ISSN 0040-0912 DOI 10.1108/00400910210449222

It has become almost routine to point out the importance of human resource development (HRD) within small business development. Ram et al. (2000, p. 334) maintained that ‘‘academic commentary (Hendry et al., 1995) and the crowded platform of enterprise support initiatives (Matlay, 2000, Storey 1994) are testimony to the coupling of training and small business performance’’. More recently, Matlay (2002, p. 13) has described this as ‘‘the dominant training paradigm in Britain’’. Yet what are we talking about and what are we looking at when we consider training or HRD in SMEs? Understanding of human resource development within SMEs has been dominated by representationalist perspectives of organisation, by narrow definitions of HRD as training and by quantitative research methods. Whilst there have been more recent exhortations to advance the understanding of SME HRD through qualitative and longitudinal methods, as a consequence of limited theorising on HRD, there has also been a lack of clarity over what might be researched. Within the small firms literature, intensive studies of the workplace are comparatively rare, yet policy on HRD activities has predominantly been informed by snapshot approaches based on survey evidence (Curran et al., 1996; Matlay, 1999). As McGoldrick et al. (2001a) argue concerning the impact of impoverished research on theory: ‘‘The process of defining HRD is frustrated by the apparent lack of boundaries and parameters, and elusiveness created through the lack of depth of empirical evidence for some conceptual aspects of HRD’’ (McGoldrick et al., 2001a, p. 344). They go on to say that ‘‘empirical elusiveness derives from an inability to show that HRD has a substantive presence in organisations’’ (McGoldrick et al., 2001a, p. 349). It is to this space that this article is intended to contribute, drawing from research undertaken by Rigg (2001). The article will argue for the potential offered to researching, understanding and practising HRD in SMEs, of taking a discourse perspective on organisation, learning and development. The arguments are demonstrated through presenting a comparative interpretation of research material collected ethnographically in three small companies, contrasting a

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traditional and a discourse perspective on HRD. The article aims to contribute to an approach which can deepen understanding of HRD in SMEs by combining three strands that have not generally been integrated: ideas from recent debates on what HRD comprises, perspectives on learning, and a discourse perspective on organisation. The argument is that impoverished research results from underdeveloped theory and that this integration offers new insights for fruitful research into and practice of HRD in SMEs. The article is structured as follows: the next section introduces the three case study companies, providing brief details on their size, business and engagement with formal HRD activity. This is followed by an outline of the theoretical context, which explores literature on HRD in small organisations, and draws from current debates on how HRD might be theorised, before offering a discourse perspective on organisation and learning. Following explanation of the research context, this conceptual framework is applied to demonstrate contrasting interpretations of the three companies’ HRD derived from a discursive reading compared with a traditional reading and to discuss implications for furthering HRD in SMEs.

Introducing the case study companies The three companies[1] are: (1) Metal Tubes. Metal Tubes was founded in the early 1990s by two men, friends who used to work together, and now has ten direct employees. Their business is to project manage the design and installation of air-conditioning systems. The business is successful and steadily growing. Company members’ engagement in formal HRD is summarised below: . 50 percent of staff have engineering degrees; . both directors did Diploma in Management Studies (DMS) and MSc during first three to four years of Metal Tubes; . one has begun a Doctorate in Business Administration (DBA); . two project staff have begun DMS; . one trainee is sponsored on a parttime degree;

two modern apprentices are employed and sponsored in training. (2) Feeding the Stars. Feeding the Stars was started in the late 1980s, providing mobile accommodation, food, shopping, servicing for film sets on location around Britain. The founder was a woman who had worked for several years in the television industry. There are now 10-15 employees, varying month by month with assignment. Company members’ engagement in formal HRD is: . the owner-manager completed a DMS in 1999; . no others are formally training, although the owner-manager is encouraging two of the staff to also begin a DMS; . no other post-school qualifications have been taken apart from HGV licences. (3) Radical ReDesign. Radical ReDesign was created as a design agency in the early 1990s by the current Managing Director. It is successful and growing, with 30 employees currently. Their business is now defined as ‘‘designing the customer brand experience’’, deploying graphic design, interior design and architecture to help clients rebrand themselves. Formal HRD activity is: . over 80 percent of staff have professional/graduate qualifications in graphic design, interior designer, architecture and marketing; . two account managers have recently done the Chartered Institute of Marketing’s post-graduate Diploma in Marketing; . short (one-day) formal courses are annually used. .

In summary, if a traditional HRD reading of the companies is made, defining HRD as training, measured quantitatively by number of training days or spend per head per annum, Metal Tubes would be hailed as a high HRD investor. Radical ReDesign would be described as having a very highly qualified workforce and as having moderate HRD activity. Of Feeding the Stars it would be said that there is currently no training going on, and the workforce is not highly skilled, although the owner-manager is relatively unusual amongst entrepreneurs in having a formal management qualification. However,

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taking a discourse perspective on organising, managing and learning, produces quite a different reading of the companies’ HRD activity.

Defining and measuring HRD Whilst theorizing of HRD has recently taken great strides, published empirical research into HRD in general, and specifically about SMEs, remains dominated by narrow definitions of HRD, limited theorizing and methods that have been confined to measurement of the easily measurable. Westhead and Storey (1997) in their review of research on training and HRD argue that they were unable to consistently document methodologically well-conducted research, which produced reliable results that could be generalised across the whole sector. Matlay (1999) identified that most of the research conducted in this area appears to be quantitative, and longitudinal research is virtually absent in the area of training and HRD (Matlay, 2002). The prevailing wisdom on HRD in small firms is that not much is done: the evidence is that SMEs do not spend equivalent on training compared to medium and large companies, and rarely have a staff member with a dedicated HRD or training role (Westhead and Storey, 1997; Matlay, 1998; Hill and Stewart, 1999; Hill, 2001). Hence it is assumed their HRD is inferior and unorganised, if not non-existent. Academic and policy-orientated consultancy research into SME HRD activity, has, until recently, predominantly been through quantitative survey, using such measures of HRD activity as the training expenditure or number of days training per head (e.g. Hitt, 1998; SadlerSmith et al., 1999; Training, 1998; Welch, 1996; Westhead and Storey, 1997), or the take-up rates of NVQs or other SME provision (FEFC, 1994, as critiqued by Jennings et al., 1996; Matlay and Hyland, 1997). Some studies have taken a broader definition of HRD, for example, Jennings et al. (1996) refer to training and organisation development, when discussing HRD in small firms; Hill and Stewart (1999, p. 108) define HRD as: ‘‘an intricate web of issues and activities’’. However, most frame HRD as training and development, with the traditional

ASK model: attitudes, skills and knowledge. For example the definition within the UK’s Investors in People (IIP) is ‘‘any activity that develops skills and/or knowledge and/or behaviour . . . including formal courses, onthe-job, shadowing, mentoring, coaching etc.’’ (Investors in People UK, 1996, p. 271). There are voices critical of the assumption that the barometer of HRD activity in SMEs is expenditure on training. For example, Curran et al. (1996) critique the focus on vocational training and quantitative research methods, and broaden the field, presenting a typology of training that incorporates informal and off-the-job sources, such as trade fairs and networking. Nevertheless, this still constrains HRD to training activities. Anderson and Skinner (1999, p. 236) have argued: ‘‘Previous studies of small firms . . . have tended to take a quantitative, crosssectional approach . . . (which) cannot fully incorporate the complexity of management and organisation development processes’’. Vickerstaff and Parker (1995, p. 60) make a similar argument, arguing the benefit of qualitative research: ‘‘case study based work has revealed a high degree of unplanned and informal training activity in small firms’’. This is also a perspective reinforced by the case study research of Ram et al. (2000, p. 337): ‘‘an absence of formal training does not mean that firms do not train per se’’. Theorising HRD – beyond counting training Recent debates on how to define HRD have produced some stimulating insights (e.g. Lee, 2001; McGoldrick et al., 2001a). One of the developments is the broadening of HRD beyond a focus on training to encompass learning. For example, McGoldrick et al. (2001a, p. 351) propose a holographic metaphor to understand HRD as: . . . ‘‘the fluid, multifaceted, integrated social artefacts’’ which are the ‘‘continuing outcome’’ of contextualized learning. HRD then serves as collective noun for the various concepts, theories and methods devised to manage and control learning (McGoldrick et al., 2001a, p. 351).

Concluding the benefits of their holographic metaphor McGoldrick et al. (2001a, p. 351) say:

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. . . it emphasizes the analytical significance of mutually involved processes of social and discursive construction . . . [and] provides interesting methodological questions concerning empirical research.

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Summing up authors’ perspectives in their recent edited collection, McGoldrick et al. (2001b, p. 396) conclude: HRD has a central focus on and concern with learning . . . . Therefore we can conclude that HRD will be increasingly concerned with facilitating the learning of individuals, teams and organizations through the design, structuring and organization of work itself.

It is not that in the past there have not been voices calling for recognition of learning within HRD. Marsick and Watkins (1990, p. 215) are perhaps most notable, drawing attention over ten years ago to informal and incidental sources of learning:

action’’ and in Czarniawska’s (1998, p. 26) conception of ‘‘an institutionalised action-net . . . interconnecting acts of organizing’’. Fletcher (1997, p. 94) draws on the idea of network, suggesting an organisation is ‘‘a network of interactively shared meanings . . . (where) . . . collective meanings become institutionalised within the organisation through social relational patterns and the development of a common language’’. The role of talk is also fundamental to a discourse perspective of organisations (Grant et al., 1998; Mumby and Clair, 1997). Grant et al. (1998, p. 12) argue: . . . ‘‘organization’’ can be seen as a continuous process of social accomplishment which, in both senses of the term is articulated by and through the deployment of discursive resources (Grant et al., 1998, p. 12).

Informal learning . . . can be planned, but includes learning that is not designed or expected. Incidental learning, by definition, includes the unexpected.

Not only does this perspective collapse any boundary between work and rest-of-life, in that experiences outside work can provoke learning about work, but they also acknowledged learning as a collective, not simply an individual process: In the process of seeking answers to collective problems, other people learn along with the person initiating the action (Marsick and Watkins, 1990, p. 217).

Other writers who present a perspective on HRD as integral to organisation processes, include Walton (1999), who talks of human development as part of the fabric of an organisation, and Kessels (2001) who likens HRD to a ‘‘corporate curriculum’’ – ‘‘the ‘rich landscape’ of the work environment that invites you to explore, meet others and develop’’ (Kessels, 2001, p. 388). The implications of such processual views of organising are significant as will now be elaborated. Conceptualising organisation: what is an ‘‘organisation’’ that there might be development? – a discursive view of managing and organising Most HRD research has been dominated by what Chia (1996, p. vii) describes as ‘‘representationalist thinking’’ the attempt to capture and describe an external reality, or what Reed (1992) categorises as where an organisation is defined by its structure rather than through the individual members. More processual perspectives of organisations have been offered by perceptions such as Clegg and Hardy’s (1999, p. 3) ‘‘sites of situated social

For Mumby and Clair (1997, p. 181) ‘‘discourse is the principal means by which organization members create a coherent social reality that frames their sense of who they are’’. Whilst discourse often refers simply to spoken dialogue (Sinclair and Coulthard, 1975), or to written and spoken text (e.g. Gilbert and Mulkay, 1984; Potter and Wetherell, 1987), in this study a broad understanding was taken, defining discourse more broadly, as discursive practices: not only language, but also ideas and philosophies (Van Dijk, 1997). If discourse is understood in this way, discursive practices ‘‘do not just describe things, they do things’’ (Potter and Wetherell, 1987, p. 6), i.e. talk is intended to shape practices; discourse is ‘‘a piece of language in action’’ (Watson, 1999, p. 4). The study reported here deployed Sambrook and Stewart’s (1998) distinction between discourse as noun and as verb to take the following definition of discourse: A coherent, but not watertight, system of meanings encompassing discursive resources – individual ideas and language coalesced together with apparent logic and coherence, and communicated through discursive practices – the communicative acts deployed to express dominant values, beliefs and ideas (Rigg, 2001).

The distinction between discursive practice and discursive resource has methodological implications, in that a focus on resources is a focus on the content, whilst inclusion of discursive practices[2] encompass a range of communicative acts, both verbal and nonverbal, including stories, narratives, rituals

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such as making the tea or the format of meetings, rhetoric, language games such as names, conversations, sense-making, signs and architecture – the physical organisation of space and bodies. Learning as encounter with new discourse When a learning perspective on HRD is adopted, this opens up greater recognition that development is ongoing through informal, continuous processes, what Hendry (1994) describes as learning through, rather than on, the job. Anderson and Skinner (1999, p. 241) suggest: Indeed, as the process of business development occur, those involved will be constantly developing, largely through informal, often unplanned, training and experience as part of their normal job.

However, these mystical processes of ‘‘learning’’ are rarely articulated. We want to argue that learning can usefully be conceived of as encounter with new discourse: an engagement with new discursive resources and practices – put simply, new ways of thinking about, talking about and doing work. The literature on learning theory suggests that learning at higher levels, what Bateson (1973) terms Level III or Belenky et al. (1986) refer to as Level 5[3] is concerned with people challenging dominant discourses and discovering or creating others in which they have reframed themselves, and, with different discursive practices are able to engage in different actions. This constant interplay between talk, meaning and action, at an individual level and collectively within relationships, resonates with Watson and Harris’s (1999) concept of the ‘‘emergent manager’’, drawing on Chia’s (1996) ‘‘ontology of becoming’’ in which ‘‘people engaged in managing as a kind of work are seen as making their worlds at the same time as their worlds are making them’’. Managers are seen as involved in ‘‘emergence’’ both in shaping their personal sense of ‘‘self’’ and in shaping organisational work activities through ‘‘organising’’’ (Watson and Harris, 1999, p. 238). In summary, if we move away from the representationalist assumptions of organisations on which most HRD research has been predicated, and take a discourse perspective on organisation, as outlined above, this provides a framework for

researching micro-processes of learning through researching everyday social interactions that company members engage in as they undertake their work. Figure 1 summarises the conceptual framework for the study reported in this article, in which the notion of discourse is central to perspectives on organisation, management, making managers and learning. Research design As we have argued, a discourse perspective on organisation and managing opens up the prospect of researching management practice through studying the talk/action in use, the ‘‘network of action’’ or in other words, the discursive practices of a particular organisation and the language or discursive resources managers use. This focus lends itself to ethnography because of the possibilities to collect accounts, to observe actions and processes and to explore the feelings, thoughts and meanings people attribute to situations, as they happen. In particular this study used: Microethnography [which] zeroes in on particular settings drawing on the ways that a cultural ethos is reflected in microcosm in selected aspects of every day life . . . (Wolcott, 1995, p. 102).

The form of micro-ethnography employed in this study was shadowing of key managers interacting with other people in the course of their work, combined with semi-structured ethnographic or narrative interviews of them and their colleagues. Czarniawska (1998, p. 28) describes her use of shadowing as allowing ‘‘me to move with them and to move from one point in an action net to another because I am after not individual experience but a collective construction’’. In this study Figure 1 A discourse perspective on managing, organising and learning

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the aim of the shadowing was to observe key collective events, such as particular kinds of meetings, which could constitute Wolcott’s cultural ethos in microcosm. This was combined with two other ethnographic methods, narrative interviews and ethnographic interviews. In narrative interviews, using Czarniaswska’s (1998, p. 28) definition of ‘‘chronological relations of events that occurred under a specified period of time’’, I explicitly asked for stories, for example, of organisation members’ early impressions when they joined the company; for accounts of funny and difficult incidents. Ethnographic interviews (Spradley, 1979) were defined as generalised, of the moment, not necessarily collecting stories. An example would be taking the opportunity at a teabreak in the middle of a meeting, as we waited for the kettle to boil, of asking someone what they meant, felt or thought about a particular aspect of the meeting. In the three case study companies presented here, three core managers were shadowed; accompanying them throughout a day at their workplace, observing them interacting with their work colleagues, interviewing them and several of their colleagues, talking to people opportunistically, observing organisation members going about their work as a nonparticipant observer. In total 11 people were interviewed. The resultant research material was a mixture of tape recordings, which became transcribed texts; notes and documents such as compliment slips, and project records from the key meeting and logos. The material therefore combined research notes and verbatim records of language used in various interactions, and accounts of discursive practices employed. This was analysed with the aid of Ian Parker’s framework for discourse analysis (Parker, 1992) and Weick’s (1995) concept of sensemaking. This article presents just a small part of the research analysis.

HRD in the case study companies – comparing a traditional with a discourse reading

Company 1. Metal Tubes In Metal Tubes there is a strong ethos that improvement comes from learning, which can be formal, but also everyday. Much of this is done collectively, socially, through reviews that enable reflection and questioning of experience, as well as systematically researching some areas (e.g. project management literature) to share with all staff. Formal, course-based learning is encouraged to be brought into the company, through practice, and explicitly, not simply to affect the individual’s knowledge and qualification. One form is through a project review stage built into the project management steps applied to every piece of work. Another is the ways in which Sam and others have researched and presented ideas in their monthly Communication Forum on quality management, risk management and project management. At this forum, which is attended by all staff, except the apprentices, each project manager reviews their progress, problems and achievements. Others question them on what they have done and why. They can be asked to come to the next meeting having researched into a particular area. For example, one project manager had recently prepared a presentation on planning; one Director and another project manager were reading up on project management, preparing a workshop for the other staff. The forum is also a place for ‘‘bringing issues with other people to the table’’, for giving and receiving feedback. A standard item on the Communications Forum agenda is ‘‘training and development’’ when each person’s current or future training and development is discussed. A fundamental principle is that individuals learn, formally on courses, from their work experiences, and from research into theory and practice outside a course context. However, there is also an expectation that this individual learning is systematically shared with others so that all members can learn. So much of the source of new practice comes in this way. As Sam, the director, said:

In this section the three companies are revisited and a comparative picture presented of their HRD activity from a traditional and a discourse reading of HRD. 393

We find that individuals tend to learn themselves but don’t pass that learning on to others and to the wider organisation, and to change the systems that we use, so we have put certain things into play from the projects that Don and I did to try to enable this company to do that, and we go through a cycle of doing it better and doing it not so good.

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In the ensuing accounts Sam explained how aspects of how they organise evolved from his Diploma in Management and his MSc course: You can overlay action research on to the sort of company that we wanted to be, that was a company that knew very little to start with but wanted to improve ourselves through the methods that we were getting from the DMS and MSc. Risk management is another one that we are doing just now . . . I have gone to the books, done the risk management reading, now I am going to present at the next Communications Forum, but also I have given them copies of the various chapters that I think . . . , I have read and summarised most of them, to other people so we can have a proactive meeting on risk management. So I will do 15 minutes on it, saying this is what I have read, this is what I think, this is what a risk register is, you have read the stuff, so what do you think and how can we then simplify it as much as possible. . . . and then we will — people will go away with some understanding of risk management and some forms and some — or I will go away with their thinking on what I have done, plus what they have read, and we will have a new process in place.

serious misinterpretation of what was involved. He concluded: This is another example of something special or different that should go on the risk register. We didn’t have one then.

In this interaction Sam’s discursive act was to use his mistake as a parable of learning for them all, to reinforce his earlier directive on using a risk register. In conventional training terms HRD in Metal Tubes would be visible in terms of the formal courses staff participate in. However, taking a discursive approach to HRD the level of development reaches far beyond these, through the everyday interactions by which company members develop and change their ways of working. Company 2. Feeding the Stars Dale, the owner-manager, described how she brought her course learning into the workplace: . . . each week was – I was on a learning curve and that was it, every week, and not only did I teach myself – I was learning, my husband was learning as well, . . . so each week I used to come in and practice, practice on them . . . I put everything into practice and they all used to know. . . . so I sat down next to Jim (the mechanic) and I was talking to him as I used to. Every Wednesday he used to say ‘‘How did you get on?’’ and I just said ‘‘I can’t get my head round this’’, and he was coming out with stuff that he didn’t realise he knew, you know . . . and he was really giving me loads of information. I said to him ‘‘do you realise?’’ He said, ‘‘I’m thick I’m only a mechanic’’ and I said no you’re not. And he was actually feeding on it.

This story illustrates both the use of ‘‘external expertise’’ to gain ideas, but also a collaborative way of evolving a process of working. Another manager echoed the use of projects as a source of learning, as well as drawing from literature: We are working on a new project now, in Torbay, and it’s a very prestigious project for us at the moment. Sam is going to be the design manager and he has kind of picked his team for the project, and basically Sam and I are doing the design work together and we are kind of reading lots of books about project management and getting loads of ideas and just doing things in a far more effective manner than we did on Cardiff, so I suppose the learning from Cardiff has really helped me on this project for Torbay, its good.

These accounts illustrate ‘‘big’’ sources of developments in practice. However, the Communications Forum, a discursive practice directly modelled on Sam’s management course, also illustrated how a small exchange was used as a discursive practice to bring about new actions from members. On one project there was a significant unexpected cost. As the project manager circulated his cost sheets, there was general laughter and banter on the contra charge item. It referred to an item which Sam had significantly under-costed based on a

Some of the micro-processes which promote learning are small examples of reflective practice, for example, Jim, the mechanic related how . . . now we make notes and Dale (the ownermanager) wants to put everything in a book and I put everything in a book and it just corresponds. I mean like last night, I was round the house last night and we had a half hour talk and we sorted it out, so communication I think is the main thing, which I think we lacked before.

These are examples of informal processes, discursive practices, which opportunistically develop people. However, Dale has also formally introduced what she sees as a key idea from her course experience. Communication meetings are held involving all the team, albeit erratically because of the staff being away on location for two to three

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months at a time, particularly in the summer. The purpose of these was described as being to air problems; to share feelings about work; to be open and clear the air; to exchange experiences of working. The model for these is the action learning set which Dale engaged in during her DMS. Company 3. Radical ReDesign In Radical ReDesign, learning is not a dominant discursive resource of the company, and neither formal nor informal learning interactions are part of the discursive practices deployed to develop new ways of working. A few individuals have attended formal courses, but they initiate this themselves, and whether their learning affects their practice is incidental. There is no training and development agenda item within regular meetings and there is no developmental appraisal system. Jack the brand consultant had recently completed the Chartered Institute of Marketing’s postgraduate Diploma in Marketing. Jack was enthusiastic about his course learning and has drawn from his Diploma to organise seminars for his colleagues, with the aim of sharing his newly formed ideas on brands and the role of design. He said his Diploma in Marketing gave him both a business language that helped him talk to clients and a new language of thought that gave him a different way of thinking about graphic design, and of enacting his role, in other words new discursive practices. As a result of his course learning he has redefined his role from account manager to brand consultant and in parallel he said he had redefined the company business from one of producing graphic design products, to one of providing consultancy in creating a customer experience, to help clients rebrand themselves. From other people’s stories and from observations the dominant discourse of this company is implicitly one of non-learning. For example, in one of the account manager’s comments she suggested a climate of fear that stifled exchange and described her perception of how people conceal their mistakes, and become adept at managing appearances within the weekly sales meeting, which is supposed to be the main site where managers exchange progress reports on their projects: . . . if you can blag it in the meetings, you can get away with it anyway. If you can just say ‘‘yep,

done that. Two grand, no problem.’’ You could be lying. It’s all about attitude, it’s not about a reality, it’s not about honesty. By any means. I don’t think it is anyway. ‘‘cause I think there’s a lot of lies that go around in that atmosphere as well’’. Because you have to defend yourself, ‘‘cause you’re in a forum, public debate in front of your colleagues’’. So, if you have to blag it a bit, then you probably will. And I have done in the past.

She went on: . . . we never ever sit down together, apart from that Monday morning meeting, we never sit down as a team of people, running accounts, and say ‘‘what’s happening on yours?’’. So I’ve got no idea what Adrian does, and I don’t really know what Louise does. We chat occasionally, but it’s not a relaxed atmosphere downstairs either. Because everybody needs to be seen to be working because of that driving person there.

In her view the style of the most dominant individual, the marketing director, stifles talk, to the detriment of exchanging experiences of each other’s projects, or of bringing about more or different working practices. The suggestion here is of a an organisation discourse that neither encompasses discursive resources of sharing or continual learning and improvement nor promotes discursive practices of exchange or collaborative problem-solving.

Interpretation – do they or don’t they? Taking a traditional HRD reading of the three companies, defining HRD as training, measured quantitatively by number of training days or spend per head per annum, Metal Tubes would be hailed as a high HRD investor. Radical ReDesign could be described as having a very highly qualified workforce and moderate current HRD activity. Of Feeding the Stars it would be said that there is currently no training going on, and the workforce is not highly skilled, although the owner-manager is relatively unusual amongst entrepreneurs in having a formal postgraduate management qualification. In contrast, the picture of HRD presented if the cases are interpreted from a discourse perspective is quite different. Then Metal Tubes emerges as a company in which learning and improvement are integral discursive resources – they are ideas that imbue many company practices, through

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both formal means, and everyday acts such as project reviews, meetings and conversations. Within Feeding the Stars several processes are discursive practices that promote learning, through conversations that share the ownermanager’s formal course learning, and through the communications meetings. A discursive reading of this company’s HRD presents a picture of more extensive HRD activity than a traditional reading. In Radical ReDesign the dominant organisation discourse neither encompasses discursive resources of sharing or continual learning and improvement nor promotes discursive practices of exchange or collaborative problem-solving. With everyday processes coalescing to communicate an ethos of non-learning, a discourse reading of the company’s HRD presents a worse picture than conventional measures would indicate.

Conclusion There has been much interest recently in whether HRD benefits companies’ bottom line. However, the policy implications of this debate are restricted, whilst it is dominated by definitions of HRD as training and research methods that measure training spend and qualification levels. One observation from the three case companies here is that these methods fail to detect patterns of organising, or relations between individual learning and organising. In other words they misconstrue HRD practice in SMEs. Three conclusions are offered from this study for the research and practice of HRD. First, a significant source of HRD can be the engagement of one or two influential individuals in formal learning, that gets fed back into the company, through changed language and practices, in effect producing new organisation discourse. Processes of learning and development then go well beyond the individual who did a course, affecting other staff both individually and collectively in their working practices. Second, formal HRD investment is undermined by organisation processes that block learning, so measuring organisations’ formal HRD activity alone can give a highly distorted perspective.

Third, to enhance understanding of HRD within SMEs, a discourse perspective on organisation and on HRD, indicates a need for research methods that enable the study of HRD in action – the micro-processes of development. Taking a discursive view of HRD is therefore to research how it is done, and talked about; how development occurs in the course of talking and working. In summary, we have argued that although recent theorising on HRD has broadened to encompass learning and to see HRD as integral to organising processes, most HRD research and in this context most research on HRD in small organisations remains dominated by HRD defined as training activities and by a reification of organisations in which they are conceived as ‘‘things’’, particularly structures. This frames the possibilities for research narrowly, encouraging a quantitative approach, only measuring the easily measurable dimensions like expenditure, training days and qualifications. We also argue that, although a number of people have been advocating qualitative and longitudinal research for some time, there has frequently been no clarity as to what to research. However, if HRD is framed as learning, the research focus shifts to processes through which individuals learn and onto organisational processes which promote learning. If a discourse perspective is taken where ‘‘organisations’’ are conceived as ‘‘networks of shared meaning which are created, perpetuated and modified through discursive practices’’, research can focus on the ‘‘social relationship processes’’, the language used, the discursive resources and practices deployed.

Notes

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1 All names are fictitious pseudonyms to protect the identities of individuals and companies. 2 Discursive act and discursive practice will be used interchangeably. 3 At Bateson’s (1973) level III a person has an ability to step outside their previous worldview, has an awareness of their own subjectivity, has gained control over habitual ways and can take responsibility for making changes. Belenky et al.’s (1986) Level 5 is termed constructed knowledge: where the learner comes to view knowledge as contextual and themselves as potential creators of knowledge, through both subjective and objective strategies.

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Entrepreneurship education at university: a driver in the creation of high growth firms?

Introduction

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In the 2000 White Paper Excellence and Opportunity (DTI, 2000) the government outlines the need to ‘‘encourage science to flow throughout our society . . . into entrepreneurial start-ups’’ and foster ‘‘a new culture, where people think ahead, see opportunities and can take risks’’ (DTI, 2000). In particular, government claims that universities should be exploiting their resources and expertise in order to contribute best to the national economy. In its Strategic Framework, the DTI (2000-2001) states: ‘‘it is only when ideas are commercialised that jobs and wealth are created,’’ and ‘‘scientific and technological knowledge needs to be combined with other forms of expertise, such as knowledge of markets and customer needs to create innovative new products and services’’. To this end (along with increased commercialisation activity), much intervention on the part of government and universities themselves has resulted in the creation and expansion of entrepreneurship teaching in HE – whether through dedicated centres, units or departments; as add-ons in other departments or courses, such as marketing or business administration; or as profile and awareness raising exercises. The central aim of the current paper is to estimate the extent to which the effects of entrepreneurship education in HE will change the nature, and improve the quality of business starts of graduates in the long term. It also aims to show that while the facilitation of student start-ups is an important aspect of the presence of ‘‘entrepreneurship’’ at university, the number of these start-ups cannot be said to be the benchmark upon which entrepreneurship ‘‘departments’’ can be judged. The role of entrepreneurship education in HE is much wider than immediate start-up rates. Entrepreneurship education is likely to be a significant contributor to the improved quality of graduate start-ups, as well as societal and intellectual attitudes to entrepreneurship, in the longer term.

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Research background

Education + Training Volume 44 . Number 8/9 . 2002 . pp. 398–405 # MCB UP Limited . ISSN 0040-0912 DOI 10.1108/00400910210449231

Prior to the inception of dedicated entrepreneurship departments and units and teaching in HE, UK graduates have started

Laura Galloway and Wendy Brown

The authors Laura Galloway is a Lecturer at the Scottish Institute for Enterprise, Heriot-Watt University, Edinburgh, UK. Wendy Brown is a Research Assistant, Hunter Centre for Entrepreneurship, University of Strathclyde, Glasgow, UK. Keywords Universities, Education, Entrepreneurialism, Growth, Small- to medium-sized enterprises, United Kingdom Abstract There is, in the UK, increasing attention being paid to the potential of university education to facilitate high quality growth firms. While some commentators believe that this potential can be realised in the short term, many believe that only a long-term view of the entrepreneurial potential of graduate entrepreneurship is feasible as new graduates lack the resources, skills and experience necessary for sustainability and growth of ventures. Like most university entrepreneurship ‘‘departments’’, the Hunter Centre for Entrepreneurship at the University of Strathclyde examines the profile of students and outcome of entrepreneurship electives in terms of student ambition and motivation. Using data from this exercise along with data from a study of 2,000 Strathclyde alumni, an impression of potentiality and actual outcome of entrepreneurship electives is possible. Electronic access

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firms. For example, at the University of Strathclyde, the original entrepreneurship unit, the Strathclyde Entrepreneurship Initiative (renamed the Hunter Centre following a £5 million endowment from an alumnus entrepreneur), was not established until 1996. The sample of alumni entrepreneurs used in this study bears witness to the fact that Strathclyde graduates have started firms, despite having received no entrepreneurship education at university. Entrepreneurship education in universities has achieved start-ups from students to varying degrees. To a large extent this is determined by the type of entrepreneurship education delivered, and to whom. For example, the University of Stirling had good start-up rates from its Graduate Enterprise Programme (Fletcher, 1999), but this aimed specifically to facilitate students who had already declared intention to start-up. Similarly, throughout the world there are universities where start-up rates for students are extremely high, such as Babson College in the USA (Upton et al., 1995) and the University of Twente in The Netherlands (Deakins, 2000). With associated and dedicated student incubators, as well as a prevailing culture and expectation of entrepreneurial realisation as a strategic priority, however, these universities are more adequately equipped to facilitate student start-ups than most. The hope is that by including enterprise and entrepreneurship within HE, the number of graduate enterprises will increase, and given the intellectual capital of graduates, the quality of their ventures should be correspondingly high (see for example, Scottish Executive, 2000). Within the changing economy, where corporate life is being eroded (Coulson-Thomas, 1999), both the intention and ability to create and sustain high quality growth firms should be promoted in universities. While as a direct action within the current economic climate, this proposed culture change is laudable, practice is often not straightforward. Notwithstanding issues such as resentment of wealth, distrust of establishment and negative image of entrepreneurs within wider society (see Levie and Steele, 2000; Fraser of Allander, 2001), the traditional culture within universities is to further understanding and create intellectual wealth for a society. Within the economic constraints of the domination of large

corporations, there has been, for a century, little demand for the creation of entrepreneurs (Gibb, 1993). It can also be said that there has long been a tradition within universities that as publicly funded institutions, commercialisation of discovery is ethically dubious. While traditional notions such as these have been, at least since the 1980s, effectively challenged in light of the potential benefits of enterprise within the modern economy (Gibb, 1993), culture change is always inherently slow. Negative stereotypes within general society can prevail long past their social significance, and within universities the situation is no different. The key to improving perceptions and attitudes within society and within HE lies in education. In addition to developing skills for business start-up and ownership, entrepreneurship education in universities can represent a positive influence in terms of general attitudes to entrepreneurship, and in turn promote entrepreneurship as a useful and respectable career prospect for graduates (Kolvereid and Moen, 1997, p. 155). What few entrepreneurship departments are equipped to do, though, is to significantly increase the immediate number of businesses started by their students. The many reasons for this include lack of follow-on support after graduation, brought about by not having the funds or infrastructure to facilitate business starts (though it must be remembered that many universities have incubator provision for staff, and often student, spin outs). The most important reason why rates of immediate graduate entrepreneurship remain low is, however, that students themselves rarely claim to want to start a business upon graduation. This is not particularly surprising, as upon graduation students most often have debt, no collateral, lack of industrial experience and alternative personal priorities. Indeed, for many science and technology students opportunity cost can completely prohibit personal investment in business ownership upon graduation, as a preregistration period within a particular industry can be necessary before practitioner status is gained. Carter (1998) found in her focus group study of alumni perceptions of entrepreneurship education in HE, that many ‘‘believed it was important to gain some work experience prior to start-up as it not only gave them detailed sectoral knowledge, it also provided a network of business contacts and

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the appropriate finance to start-up.’’ Indeed, some commentators have noted that immediate start-ups can often be disappointing in terms of the number of them which produce any significant impact in terms of growth and wealth creation (Rosa, forthcoming). This does not, however, devalue the impact entrepreneurship education in HE can have on an economy. Along with long-term perceptions about entrepreneurship being improved, so too are skills, information and understanding of the entrepreneurial process and businesses ownership/management. These skills can be drawn upon and further developed throughout an individual’s professional life.

The research study The Hunter Centre for Entrepreneurship aims to ‘‘increase substantially the level of entrepreneurial capability among Strathclyde students’’, and act as ‘‘a catalyst for a profound increase in successful business startups’’ (Hunter Centre, 2001). The Hunter Centre refers to Massachusetts Institute of Technology (MIT) as a model. 1996 figures for MIT state that 13 percent of companies started within 15 years of student graduation have 100 or more employees, and MITrelated companies tend to be knowledgebased software, manufacturing or consulting (MIT, 1997). The Hunter Centre also aims by 2004 to facilitate six student start-ups (i.e. within one year of graduation) per year, and to increase the number of high quality companies started by University of Strathclyde graduates. While data about which industries students of entrepreneurship intend or aim to enter is not available, focused support of science, engineering and technology students is a priority at the Hunter Centre. This is evidenced by the university’s inclusion in the Scottish Institute for Enterprise (for which education elements are dealt with by Hunter Centre staff), from its inception, along with four other universities: the Universities of Edinburgh, Glasgow, Heriot Watt, and Dundee. The Scottish Institute for Enterprise (SIE), now represented by every university in Scotland, is an OST-funded consortium which aims to develop entrepreneurship education in Scottish universities, particularly amongst science and technology students,

and to increase the amount of technology transfer from both students and staff. The current study uses two samples to investigate the difference between those who have not had the opportunity to study entrepreneurship at university and those who have attended an entrepreneurship elective. The two samples comprise: (1) a sample of students who have completed at least one of the 14 Hunter Centre modules; (2) a sample of alumni of the University of Strathclyde who would not have had the opportunity to study entrepreneurship. The latter sample was created for the purpose of comparing the entrepreneurial behaviour of Strathclyde alumni, to findings from the Global Entrepreneurship Monitor Scotland (Galloway and Levie, 2001). Results from the subsequent study (Levie et al., 2001) revealed several things. These include: . When compared to the general population, Strathclyde University alumni are no more entrepreneurial than the rest of the population. The Global Entrepreneurship Monitor (GEM) Scotland found that the entrepreneurship rate in Scotland is around 4 percent (Galloway and Levie, 2001). Using the same measurement of entrepreneurship, the rate for alumni of the University of Strathclyde is 5.2; not much higher. Within the GEM Scotland sample, when graduate rates are isolated from those for the general population a rate of entrepreneurship of 7.3 is revealed. This suggests that Strathclyde alumni are slightly less entrepreneurial than the graduate population of Scotland as a whole. . Alumni nascent entrepreneurs intend to employ at least two others at a greater rate than the general population in Scotland. This difference, however, tails off when intent to employ greater numbers of people is considered, and there is no evidence that alumni-owned business will exhibit traits associated with high growth. This is not, however, corroborated by data from GEM Scotland, which found that nascent and new entrepreneurs who are graduates are more likely to employ more people, and those with a postgraduate qualification are more likely to start larger-scale ventures. It must be

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.

.

noted, however, that when data is split to show entrepreneurs by educational qualification in the GEM Scotland sample, cell sizes are very small, and conclusions drawn from them correspondingly tenuous. Similarly, alumni entrepreneurs tend to be concentrated in business services. Most of the alumni business services start-ups are consultancies, which are rarely associated with high numbers of employees. While the entrepreneurship rate (using the GEM measurement) of engineering faculty alumni was 7.3, the highest rate of the five faculty groups, the rate for science alumni was the lowest at 2.7 (the other faculty groups were business, arts and social sciences, and education).

For the current paper a number of hypotheses can be drawn, based on aims of entrepreneurship education in universities (in general), and the findings in Levie et al., 2001: H1.

Entrepreneurship education in universities will increase the number of immediate student start-ups (i.e. upon graduation).

H2.

Entrepreneurship education in universities will increase the quality and rate of growth oriented graduate businesses.

H3.

Entrepreneurship education in universities will increase the range of industry sectors represented by graduate businesses, specifically those associated with technology and science.

Research sample and methodology The Hunter Centre for Entrepreneurship at Strathclyde University currently runs 14 credit-bearing elective modules for undergraduate and postgraduate students. Students of any faculty may take a Hunter Centre elective during any semester of their university studies. An ongoing exercise in the Hunter Centre is to study the profile and reactions of students who take entrepreneurship electives. Students are given a questionnaire asking about their attitudes towards entrepreneurship and their reasons for taking the course at the start of every module. In order to assess any impact the

electives have on these attitudes, students are given a similar questionnaire at the end of their module. This second ‘‘end of course’’ questionnaire also asks students about their professional and career intentions and their appraisal of the module they have just received. For the present study ‘‘end of course’’ questionnaires from 210 undergraduate students were analysed on the basis of students’ career ambitions and, if appropriate, ambitions they had within the context of future business ownership. In 2001 the Hunter Centre conducted a telephone survey of over 2,000 University of Strathclyde alumni. The original reason for this was in order to be able to compare the rate and profile of entrepreneurship of the University of Strathclyde with that for the general population in Scotland, as detailed in the Global Entrepreneurship Monitor, Scotland. Results in Levie et al. (2001) are based on the GEM measurement of entrepreneurship, which involves, essentially, adding the proportion of those in the active process of starting a business (nascent entrepreneurs) with the proportion who own a business which is less than 42 months old (new entrepreneurs) (Reynolds et al., 2001, p. 10). While this measurement is most appropriate for the purposes of GEM, and the GEM definition of entrepreneurship, for the current paper ‘‘entrepreneurship’’ is defined more broadly. The current paper describes a respondent as an entrepreneur if he or she is either: . in the active process of starting a business; or . a business owner, with no age limit to the business. This measurement gives a truer picture of the proportion of the alumni sample who are involved in business ownership. Only data from respondents aged between 18 and 64 (i.e. the economic adult population) were analysed, reducing sample size to 1,954. A further 21 respondents had given insufficient data, leaving a final sample size of 1,933. For both samples, all faculties were represented except for education in the student sample. This reflects the very low proportion of students from the education faculty who take entrepreneurship electives. Of students sampled, 78 percent stated that they aimed to start a business at some point in their lives (the same rate found by Hayward

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and Sundes (1997), for students from all Scottish universities, and similar to that found by Henderson and Robertson (2000), in their study of undergraduates at Leeds Metropolitan University). Of alumni respondents, 9.3 percent were business owners at the time of the questionnaire, and 2.9 percent were in the process of starting up. It is important to note that comparisons between the two samples must be treated with some caution as not only do questions often vary (these are flagged up where appropriate throughout the findings), but for the student sample, what is being measured is intent, which is far from absolute. Trice (1991), however, has argued that career aspirations among adolescents are significantly predictive of eventual career choice, and previous studies, such as Autio et al. (1997), and Ajzen (1991), have shown that, as a methodology, analysis of intent can be useful.

Findings and discussion While H1 can be neither confirmed nor denied, results are revealing. From the student sample there is evidence that business start-ups within five years of graduation are an ambition of some students who take at least one entrepreneurship module. Of the 78 percent of students who claimed that they intend to start a business at some point in their lives, 19 percent claimed that they would like this start-up to occur within the next five years. A total of 38 percent claimed that they would like to start a business between five and ten years from the time of the questionnaire, however, and a further 43 percent said they expected to start-up after ten years. The majority of students, therefore, seem to want to wait significant lengths of time before starting a business (similar results can be found in Hayward and Sundes, 1997). This is likely to be as a result of issues, personal, financial and professional – particularly in terms of experience, mentioned above. When we compare the results for entrepreneurship students with those of the alumni sample, we find that there are some differences, as in Table I. The comparison illustrated in Table I can not be said to be definitive, as it compares responses to different questions in the two questionnaires. The general trend is evident, however, as it shows that where

entrepreneurship has not been studied at university, the majority of businesses start up more than ten years later, and that for those students who do study entrepreneurship, their ambitions for business start-up follow this trend. Indeed, on first sight Table I suggests that recent students of entrepreneurship are actually more cautious in terms of ideal time after graduation to start a business, as fewer students than alumni claimed that they aimed to start up within five years. It is most likely, however, that the figure of 33 percent of alumni who started their business within five years of graduation is misleading as a result of ‘‘post university’’ postgraduate studies while in the employment market. It may still be the case, however, that information and knowledge about entrepreneurship and enterprise actually encourage students to wait before entering business ownership. Further, and more exhaustive, research would be required before this could be any more than speculation, however. Results based on the investigation of H2 are also encouraging. Figure 1 shows that more than 30 percent of the Strathclyde alumni entrepreneurs are self-employed, and that three-quarters of respondents employ ten people or less. While it would be unreasonable to ask students to predict how many people they think they may employ at some point, more general questions can still reveal ambitions for future business. For example, 45 percent claimed that they aspired to create a large business, whilst only 26 percent wanted their future business to be small. Further, 35 percent claimed that their ambitions for business would be to ‘‘grow and sell’’ the firm. In terms of other indicators of growth and quality, 42 percent of students claimed that they would aim for their business to sell internationally, compared with only 10 percent who claimed that they would prefer trade locally. This data, though again not definitive, strongly suggests that aspirations on the part of students of entrepreneurship towards business ownership are ambitious, relative to responses from graduate alumni. H3 is supported. Due to sample sizes, industry sectors are grouped into four categories in order to avoid too much subdivision. These categories, for the purposes of consistency of data handling, are the same as those used for GEM. They comprise:

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Table I Research sample Student sample ‘‘I plan to start a business . . .’’ (prediction)

Alumni sample Time between last graduation and year when business first made profit or wages

19 38 43 100

33 26 41 100

Within 5 years 5-10 years More than 10 years Total Figure 1 Number of employees

(1) extractive (e.g. mining, fishing); (2) transforming (e.g. manufacture, construction); (3) business services; and (4) consumer services. Data from the alumni sample revealed that of those who owned or were in the active process of starting a business, there was much concentration in the business services sector, as illustrated in Figure 2. When we investigate what respondents had studied at university we find that over a third of alumni entrepreneurs are business faculty graduates, and over a quarter are from the Faculty of Engineering. Figure 3 illustrates the difference between the distribution of alumni and recent entrepreneurship students by faculty attended. Consultancies are

common amongst those with engineering or business qualifications, and it is likely that small scale consultancies of these types account to a large extent for the high numbers of self-employed alumni and micro-business owners shown in Figure 1. Very few (less than 10 per cent) of alumni entrepreneurs are graduates of either the education faculty or the arts and social sciences faculty. This is not particularly surprising when the employment market for graduates of these faculties is considered. Similarly, science has been regarded in terms of employment as affording opportunities in large, often multi-national firms, along with academia and education, which most likely accounts for the relatively low number of science faculty alumni entrepreneurs. It is only in the last decade that

Figure 2 Proportion of entrepreneurial alumni

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Figure 3 Entrepreneurial alummi and students by faculty

real focus on the exploitation of science and technology, outwith the international corporate context, has occurred. Indeed, as mentioned, the aim for many university entrepreneurship ‘‘departments’’, and entrepreneurship development groups in HE such as the Scottish Institute for Enterprise, is to encourage and foster science and technology transfer. The distribution by faculty attended on the part of recent students taking entrepreneurship electives shows a greater proportion of science faculty students than the alumni sample. This may, in part, be as a result of the ‘‘new’’ science, IT/IS/Computer Science, which has a higher profile than most sciences as commercially lucrative, particularly since the advent of the DotCom type of organisation. The student sample also revealed that while the proportion of students from the arts and social science and the education faculties is low (in fact for the current sample no entrepreneurship students from the education faculty could be identified), the proportion of engineering students is actually higher than the proportion of business students. The relatively greater number of science and engineering students, with an interest in entrepreneurship, as illustrated in Figure 3, suggests that the range of industries in which graduates start businesses should increase.

Conclusions Studies of particular projects, such as Fletcher (1999) on Stirling University’s graduate enterprise programme, have shown disappointing outcomes in terms of numbers of high quality graduate start-ups. The graduate enterprise programme was, however,

more focused on increasing ‘‘business competence’’ than on raising awareness of entrepreneurship and motivating those whose main subjects have not been associated traditionally with encouraging the development of creativity and ideas for commercialisation (Rosa, forthcoming). Many entrepreneurship ‘‘departments’’, including the Hunter Centre, have modules in which the focus is about the development of both competence and motivation. Indeed, other studies have found that in terms of encouraging alumni to start businesses, entrepreneurship courses, where available, have ranked as the highest influence (e.g. Valera and Prieto, 2001) Results from the current study are limited in terms of their ability to show ‘‘actual’’ outcomes of entrepreneurship education, since they are based entirely on what students say they are likely to do in the future. Ongoing tracking of these students in order to be able to compare their aspirations with what actually occurs is a central aim of the Hunter Centre. The value of the current study lies in: (1) the indication of the extent to which students of different faculties who study entrepreneurship perceive business startup as a valid and attainable career option; (2) the extent to which entrepreneurship education has given students information about, as well as the motivation to start, high quality, growth businesses compared with their alumni antecedents. The ambitions of students to start high quality, wealth creating firms at some point in their lives should be seen as encouraging to those who have invested, financially or otherwise, in the development of entrepreneurship education in HE. Without this ambition for enterprise on the part of

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those who are best placed to contribute to the knowledge driven economy, there would be no reason to, or benefit of, increasing entrepreneurial competence. The current study finds, however, that return on the investment in HE entrepreneurship education is most likely to be long-term rather than immediate. This eventuality is likely to be of most benefit to the enterprise economy, as industry experience, maturity and developed networks are more likely to generate quality and sustainability in business. Is the potentiality of an eventual cultural norm of graduates who have knowledge of and motivation towards enterprise valued less because of a lack of measurable outcomes of entrepreneurship education in HE in the short term? The current authors would contend that immediate start-up may not be the best vehicle for the expansion of high growth, quality firms, and as such, the potential of the long-term benefits of entrepreneurship education in HE is a more appropriate measure of its value.

References Ajzen, L. (1991), ‘‘The theory of planned behaviour’’, Organizational Behaviour and Human Decision Processes, Vol. 50, pp. 179-211. Autio, E., Keeley, R.H., Klofsten, M. and Ulfstedt, T. (1997), ‘‘Entrepreneurial intent among students: testing an intent model in Asia, Scandinavia, and USA’’ Frontiers of Research, paper presented at Babson College-Kauffman Foundation Entrepreneurship Research Conference. Carter, S. (1998), ‘‘Entrepreneurship education: alumni perceptions of the role of higher education institutions’’, paper presented at the 8th Internationalizing Entrepreneurship Education and Training Conference, European Business School, Schloß Reichartshausen. Coulson-Thomas, C. (1999), Individuals and Enterprise: Creating Entrepreneurs for the New Millennium through Personal Transformation, Blackhall Publishing, Dublin. Deakins, D. (2000), Twente University Entrepreneurship & Commercialisation Programmes, PERC internal report. DTI (2000), Excellence and Opportunity, White Paper, HMSO, London. DTI (2000/2001), Strategic Framework, HMSO, London. Fletcher, M. (1999), ‘‘Promoting entrepreneurship as a career option – the graduate enterprise programme’’, Journal of European Industrial Training, Vol. 23 No. 3, pp. 127-39. Fraser of Allander (2001), ‘‘Promoting business start-ups: a new strategic formula’’, University of Strathclyde, Glasgow.

Galloway, L. and Levie, J. (2001), Global Entrepreneurship Scotland, University of Strathclyde, Glasgow. Gibb, A.A. (1993), ‘‘The enterprise culture and education: understanding enterprise education and its links with small business, entrepreneurship and wider entrepreneurial goals’’, International Small Business Journal, Vol. 11 No. 3, April-June, pp. 11-34. Hayward, G. and Sundes, O. (1997), Evaluating Entrepreneurship Education in Scottish Universities, University of Oxford, Oxford. Henderson, R. and Robertson, M. (2000), ‘‘Who wants to be an entrepreneur? Young adult attitudes to entrepreneurship as a career’’, Career Development International, Vol. 5 No. 6, pp. 279-87. Hunter Centre (2001), Staff Handbook, University of Strathclyde, Glasgow. Kolvereid, L. and Moen, O. (1997), ‘‘Entrepreneurship among business graduates: does a major in entrepreneurship make a difference?’’, Journal of European Industrial Training, Vol. 21 No. 4, pp. 154-60. Levie, J. and Steele (Galloway), L. (2000), Global Entrepreneurship Monitor Scotland, University of Strathclyde, Glasgow. Levie, J., Brown, W. and Steele (Galloway), L. (2001), ‘‘How entrepreneurial are Strathclyde alumni? an international comparison’’, paper presented at 4th McGill Conference on International Entrepreneurship, University of Strathclyde, Glasgow. Massachusetts Institute of Technology (1997), The Impact of Innovation: A Special Report of the BankBoston Economics Department, MIT, Boston, MA. Reynolds, P., Camp, S.M., Bygrave, W.D., Autio, E. and Hay, M. (2001), Global Entrepreneurship Monitor Executive Report, Kauffman Centre for Entrepreneurial Leadership, Ewing Marion Kauffman Foundation, Kansas City, MO. Rosa, P. (forthcoming), ‘‘Hardly likely to make the Japanese tremble: the business of recently graduated university and college ‘entrepreneurs’’’, submitted to International Small Business Journal. Scottish Executive (2000), ‘‘Nichol Stephen call for growth of pioneering graduate enterprise scheme’’, press release SE2574/2000. Trice, A. (1991), ‘‘Relationships among first aspirations, parental occupations and current occupations’’, Psychological Reports, Vol. 68 No. 1, pp. 287-90. Upton, N.B., Sexton, D.L. and Moore, C. (1995), ‘‘Have we made a difference? an examination of career activity of entrepreneurship majors since 1981’’, Frontiers of Research, paper presented at Babson College-Kauffman Foundation Entrepreneurship Research Conference. Valera, R.V. and Prieto, J.E.J. (2001), ‘‘The effect of entrepreneurship education in the universities of Cali’’, Frontiers of Research, paper presented at Babson College-Kauffman Foundation Entrepreneurship Research Conference.

Further reading DTI (2002), Opportunity for All in a World of Change, a White Paper on enterprise, skills and innovation, implementation plan as at 31 January, 2002.

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Introduction

Defining the development needs of entrepreneurs in SMEs John Davies Mick Hides and James Powell

The authors John Davies is Head of School, and Mick Hides is a Lecturer, both at the School of Management, University of Salford, Salford, UK. James Powell is Pro-Vice Chancellor for Academic Enterprise and Regional Affairs, University of Salford, Salford, UK. Keywords Entrepreneurs, Development, Small- to medium-sized enterprises, Higher education, United Kingdom Abstract This paper focuses on the theme of entrepreneurship education, learning and development and specifically, on the challenge for higher education institutions (HEIs) of supporting entrepreneurial and enterprising individuals and organisations. This is examined from the perspective of the definition of appropriate development needs of entrepreneurs in small- and medium-sized enterprises (SMEs). HEIs are undergoing a phenomenal amount of change driven by the various stakeholders (e.g. government, students and local committees). The government continues to emphasise the importance to the economy of the set up and development of SMEs. If this is to happen then SMEs will need support in developing entrepreneurial and enterprising individuals. This convergence of needs presents the opportunity for HEIs to contribute to this support. A prerequisite for this support is the definition of the development needs of entrepreneurs in SMEs. Electronic access The research register for this journal is available at http://www.emeraldinsight.com/researchregisters The current issue and full text archive of this journal is available at http://www.emeraldinsight.com/0040-0912.htm Education + Training Volume 44 . Number 8/9 . 2002 . pp. 406–412 # MCB UP Limited . ISSN 0040-0912 DOI 10.1108/00400910210449240

Over the last 20 years or so successive UK governments have emphasised the importance to the economy of the set up and development of small and medium-sized enterprises (SMEs) (Chell, 2001). Clearly if this is to happen then there is a need for entrepreneurial and enterprising individuals to operate effectively within these organisations. It follows that these individuals are likely to be most effective if they maximise their potential through appropriate development. The last five years has seen the UK government (through the Higher Education Funding Council for England (HEFCE)) introduce a significant third funding stream to higher education institutions (HEIs) with the aim of stimulating universities to ‘‘Reach Out’’ to business and the community. The broad aim of this initiative is to add value to society and the economy through the transfer of knowledge. This convergence of the needs of SMEs and the aims of HEFCE presents the opportunity for HEIs to contribute to the development of entrepreneurial and enterprising individuals in SMEs. An entrepreneur is defined, by Hamilton and Harper (1994), as someone who exploits an invention or (technological) possibility ‘‘in an environment in which adventure and risk are inherent’’. Thompson (1999) continues this theme by stating that ‘‘an entrepreneur is a person who spots a new opportunity and is minded to act on it and start something’’. Bygrave (1998) in Thompson (1999) states that ‘‘entrepreneurs are people who show initiative, imagination, creativity and flexibility. They are willing to think conceptually and to see change as an opportunity.’’ Kao (1989) in Thompson (1999) states that ‘‘enterprising people translate what is possible into reality’’. Parston (1998) as cited in Thompson (1999) defines the process of entrepreneurship as ‘‘managerial behaviour, which consistently exploits opportunities to deliver results beyond one’s own capabilities’’. In terms of general business and management education at HE level, the Quality Assurance Agency (QAA) has developed an undergraduate subject benchmark within the last two years (QAA, 2000), which indicates the knowledge and skills expected of an honours graduate in

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general business and management. The expectation is that the large majority of these graduates will join well-established organisations rather than setting up their own enterprises or joining fledgeling ones. A draft consultation paper for subject benchmarking business and management at Master’s level (QAA, 2002) has just (February 2002) been circulated to the academic community. This begs the question of whether a degree in business and management properly prepares individuals to operate in the entrepreneurial environment of a developing SME. This question will be addressed later in the paper. The three authors of the paper are all active in this ‘‘third leg’’ activity of knowledge transfer and reaching out to business and the community, hence their interest in defining the development needs of entrepreneurs in SMEs and building these into a suitable development vehicle. The University of Salford have termed this ‘‘third leg’’ activity Academic Enterprise. The core strategic objective is to establish the University of Salford, nationally and internationally, as a leading Enterprise University. This is a university that is: . closely attuned to the needs and problems generated by business, industry, the civil and voluntary services and the wider community; . proactive in seeking out new ways of fulfilling this socially responsive and inclusive remit; . focused on achieving excellence – locally, nationally and internationally – as judged by external standards; in certain areas the university is already pioneering new standards for the UK. Hence it can be seen that the work described in this paper fits well with the University of Salford’s core strategic objective. The research objective is to establish how HEIs might support entrepreneurial development in SMEs. The research questions that flow from this are: (1) What are the development needs of entrepreneurs working in enterprising SMEs? (2) How might HEIs support entrepreneurial learning for individuals in SMEs? This paper will more thoroughly describe the context outlined above and then move on to the identification of the development needs of entrepreneurs in SMEs. How HEIs can

support the development needs of entrepreneurs in SMEs is explored and the learning needs of entrepreneurs are compared with the QAA business and management subject benchmarks.

Context Successive UK governments have emphasised the importance to the economic wellbeing of the country of the development of SMEs. Patricia Hewitt, Minister of State for Small Business and E-Commerce, attending the Entrepreneur of the Year 2000 ceremony stated ‘‘One of my aims is to develop a pro-enterprise culture’’ (Facilities, 2000). Within the EU 99.8 percent of all enterprises qualify as an SME providing 66.52 percent of all jobs and 64.85 percent of turnover, emphasising the importance of small and medium-sized enterprises to the future of EU economic development (Henderson and Robertson, 1999). However, in the UK over 40,000 small businesses have failed annually for the last six years. In contrast the number of startups has been falling each year and in the last year start-ups have fallen by 26 percent. As a consequence the overall number of small businesses is decreasing (Bank of England, 2002). Beaver and Jennings (2001) updated earlier thinking on the reasons why businesses fail by compiling a list as follows: . inadequate accounting systems; . poor location; . lack of marketing skills; . lack of capital budget; . inadequate provision for contingencies; . lack of management skills;; . incompetence; . lack of experience; . neglect; . fraud; . disaster; . poor record keeping; . reckless money management; . lack of formal planning; . insufficient marketing talents; . indifferent employees; . inability to cope with growth; and . excessive inventory. Deakins (1998) noted a link between the ability of an entrepreneur to learn and small firm failure; importantly Beaver and

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Jennings (2001) quote research undertaken by the National Westminster Bank stating that during the first three years of trading only 33 percent of small firms had invested in any management or workforce training. Firms primarily develop around the ideas of entrepreneurial individuals, for example the development of Virgin around Richard Branson (Branson, 1998), Dyson around James Dyson (Dyson, 1997) and Microsoft around Bill Gates (Andrews, 1999). The growth of successful small enterprises into medium-sized firms and beyond presents a multitude of managerial and organisational challenges for these entrepreneurs (Beaver and Jennings, 2001; Schindehutte and Morris, 2001). Their ability to deal with these challenges is critical to the survival and development of the SMEs. It is not unusual, however, for these entrepreneurs to lack qualifications and to rely on their experiential learning and in a study by Littunen (2000) over 45 percent of entrepreneurs had no formal education beyond elementary schooling. In a study conducted by Choueke and Armstrong (1992) cited in Sullivan (2000) they found that the key learning method for entrepreneurs (95 percent) is through past experience. Any process that improves learning from this mode must therefore improve effectiveness. Higher education institutions in the UK are being directed to ‘‘reach out’’ to business and the community through the statement taken from the HEFCE five-year strategy: Promote and support productive interaction between HE and business and the community in order to encourage the transfer of knowledge and expertise, and enhance the relevance of programmes of teaching and research to the needs of employers and the economy (HEFCE, 2001).

The importance of SMEs and entrepreneurs to the economy of Europe generally and the UK specifically has been shown and the need for educational development of entrepreneurs working within these SMEs. As the HEFCE strategy is encouraging universities to support businesses in this way then it is appropriate that suitable learning mechanisms are developed by universities to fill this development gap.

Identification of the development needs of entrepreneurs in SMEs The identification of the development needs for entrepreneurs in SMEs will be tackled in two ways. The first part will establish the necessary subject matter, whilst the second will examine the learning methodology best suited to this type of learner. Appropriate subject material The small firm owner-manager requires specific, transferable managerial skills directly related to entrepreneurship, professional management and leadership within the operating environment of the business (Beaver and Jennings, 2001).

Thompson (1999) identified ten key characteristics of entrepreneurs which are defined as: (1) Entrepreneurs are individuals who make a difference. (2) Entrepreneurship is about spotting and exploiting opportunities. (3) Entrepreneurs find the resources required to exploit opportunities. (4) Entrepreneurs add value. (5) Entrepreneurs are good networkers. (6) Entrepreneurs have ‘‘know-how’’ and ‘‘know-who’’. (7) Entrepreneurs create capital. (8) Entrepreneurs manage risk. (9) Entrepreneurs are determined in the face of adversity. (10) Entrepreneurship involves creativity and innovation For entrepreneurs to deal with the unknown, they must be comfortable with uncertainty and manage risk (Schindehutte and Morris, 2001). To be successful an entrepreneur must think less about entrepreneurial activities and more about a set of qualities influencing behaviour and enabling flexibility and creativity (Henderson and Robertson, 1999). Learning methods Powell (1998, 1999b) has shown that few SMEs are academically contemplative or conventionally rigorous in the way that they learn. In his work he demonstrates that many SMEs are ‘‘dynamic’’ or ‘‘focused’’ in the way that they learn. Dynamic learners wait to sense an issue for themselves before acting on it whereas the focused, while also wishing to feel the whole context-problem dipole for themselves, often stand back to take a

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‘‘helicopter’’ view before doing something (Powell, 1998, 1999b). The role of experiential learning is acknowledged by a number of authors (Sullivan, 2000; Mitchell, 1997; Boussouara and Deakins, 1999). In many cases the entrepreneur has no one within the work environment to reflect on ideas or share experiences. Mentors whilst not being able to lecture to an entrepreneur can give meaning to, or aid the understanding of, an experience (Sullivan, 2000). Research conducted by Littunen (2000) demonstrated an increase of ‘‘entrepreneurship mastery’’ where personal support networks had been improved. Henderson and Robertson (1999) report on work undertaken for the Institute for Public Policy Research which suggest the introduction of entrepreneur clubs within universities. Until recently it has been almost impossible to help SMEs and entrepreneurs learn about new methods of working. The main reasons for this are their size and scale of working, and their ‘‘hand-to-mouth’’ existence, which does not permit them to release staff for sufficient time to take part in realistic higher education, no matter how well designed or delivered. The development of ‘‘remote’’ technologies such as the Internet, e-mail, the World Wide Web and the concept of the virtual university have enabled a more flexible approach to learning (Powell, 1999a). How HEIs can support the development needs of entrepreneurs in SMEs Babson College (USA) developed a series of programmes aimed at entrepreneurs, with the underlying belief that entrepreneurship cannot be taught, but the skills to be successful can be (Henderson and Robertson, 1999). In response to the needs identified in the previous section, the University of Salford in conjunction with several other Northern universities (i.e. Liverpool John Moores University, Manchester Metropolitan University, University of Central Lancashire, Bolton Institute) have developed a Master of Enterprise (MEnt.) programme. The programme is modular, allowing students to work towards a postgraduate certificate and then progress through a postgraduate diploma to a Masters degree. The intended learning outcomes for the programme are defined below. To aid analysis later in this paper each learning outcome has been given a letter code.

On completion of the Certificate stage of the programme, candidates will be able to: A Demonstrate their understanding of current management concepts in the fields covered by three programme modules. B Critically appraise the relevance and usefulness of different management tools and concepts to a particular organisational context. C Apply appropriate processes in the development of solutions to work problems. D Collect and analyse appropriate data in a problem solving process. E Develop and apply innovative ideas which will enhance the management of their own or other enterprises. F Research and utilise Web-based learning material in their own personal development. G Work with others in analysing problems and making effective decisions. H Reflect on their own learning and identify their preferred learning style. I Write reports on problem situations that show understanding of the problem causes and present recommendations for action based on evidence from primary and secondary data sources. On completion of the Diploma stage of the programme, candidates will have developed further their competence in management and problem solving, so that in addition to the outcomes at Certificate level they are able to: J Demonstrate their understanding of current management concepts in the fields covered by a further three programme modules. K Critically review and apply a wider range of processes and techniques in the development of solutions to work problems. L Lead others in analysing problems and making effective decisions. On completion of the Masters stage of the programme, candidates will have achieved the learning outcomes for the Diploma, and in addition will be able to: M Formulate research questions that are relevant to the solution of a work-based problem. N Design a strategy for a major research project.

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O Collect and analyse data in order to present solutions to problems or recommendations for change that are based on evidence. P Present the findings of a research project in a coherent manner, and in accordance with recognised good practice. The programme does not use conventional class-based teaching. Participants meet regularly in action learning sets in which they discuss and evaluate solutions to business problems which they have themselves brought to the group. They are able to draw on relevant theory, models of best practice and research evidence, through tutor input and from support learning material provided through a Web site. Special features of the programme are: . utilisation of the workplace as part of the learning resource; . encouragement of a collective approach to learning through action learning sets; . emphasis on meeting the needs of owners and managers of small and medium sized enterprises; . encouragement of lifelong learning based on the use of networks and Web-based learning materials; and . modular structure that enables candidates to shape their programme of study to their own needs. The modular nature of the programme (i.e. Certificate, Diploma and Masters) allows students to develop at an appropriate speed and time. Comparison of the learning needs of entrepreneurs with the business and management subject benchmark A comparison of the learning outcomes of the MEnt programme stages (which reflect the learning needs of entrepreneurs in SMEs) and the Business and Management Subject Benchmarks is simplified by the use of a simple correlation matrix as seen in Figure 1. Both the learning outcomes and the benchmarks have been reduced on the diagram, to aid clarity. However, the fuller explanation is used in the comparison. The subject benchmark for honours degrees in business and management states that the purpose of such programmes is threefold (QAA, 2000):

(1) The study of organisations, their management and the changing external environment in which they operate. (2) Preparation for and development of a career in business and management. (3) Enhancement of lifelong learning skills and personal development to contribute to society at large. Similarly, the draft subject benchmark for Master’s programmes, that has recently been circulated for comment, states that the purpose of such programmes is fourfold (QAA, 2002): (1) The advanced study of organisations, their management and the overall context in which they operate. (2) Preparation for and/or development of a career in business and management by developing skills at a professional or equivalent level. (3) Development of the ability to apply knowledge and understanding of business and management to complex issues, both systematically and creatively, to improve business and management practice. (4) Enhancement of lifelong learning skills and personal development so as to be able to work with self-direction and originality and to contribute to business and society at large. It can be seen from Figure 1 that the Certificate stage of the programme satisfies the requirements of an honours programme and this is helpful given the educational level of many entrepreneurs. The Diploma builds on this and begins the transition to Master’s level. The draft benchmark for a Master’s programme is aligned to the Master’s of Enterprise learning outcomes. This is encouraging as the MEnt was designed prior to the publication of the draft Master’s level subject benchmark. The nature of the programme allows for a multitude of inputs (i.e. educational level of the students) and ensures that at the end of each stage students have attained a minimum level in alignment with QAA guidelines.

Concluding remarks This paper has focused on the theme of entrepreneurship education, learning and development and, specifically, on the challenge for HEIs of supporting

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Figure 1 Comparison of MEnt learning outcomes and QAA benchmarks

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entrepreneurial and enterprising individuals and organisations. This was examined from the perspective of the definition of appropriate development needs of entrepreneurs in SMEs. From this work the following items can be concluded: . The development needs of entrepreneurs in SMEs differ from those of individuals working in "established" organisations. . The draft Master’s level business and management subject benchmark appears to support the development needs of individuals working in enterprising SMEs better than the undergraduate business and management subject benchmark. . There is a need for more ‘‘entrepreneurship’’ in the undergraduate business and management subject benchmark, so that more graduates have the necessary skills and knowledge to start up and develop businesses if they choose to. . HEIs have a role to play in bringing government objectives for SME growth together with the development needs of entrepreneurs in SMEs via knowledge transfer. . There is a need for HEIs to be more flexible in delivery to these customers and ‘‘less formal’’.

References Andrews, P. (1999), How the Web was Won: Microsoft from Windows to the Web: The Inside Story of How Bill Gates and his Band of Internet Idealists Transformed a Software Empire, Broadway Books, New York, NY. Bank of England (2002), Quarterly Report on Small Business Statistics, January, Domestic Finance Division. Beaver, G. and Jennings, P. (2001), ‘‘Human resource development in small firms: the role of managerial competence’’, Entrepreneurship and Innovation, June, pp. 93-101. Boussouara, M. and Deakins, D. (1999), ‘‘Market-based learning, entrepreneurship and the high technology small firm’’, International Journal of Entrepreneurial Behaviour and Research, Vol. 5 No. 4, pp. 204-23. Branson, R. (1998), Losing My Virginity: The Autobiography, Virgin, London.

Chell, E. (2001), Entrepreneurship: Globalisation, Innovation and Development, Thomson Learning, London. Deakins, D. (1998), ‘‘Learning and the entrepreneur’’, International Journal of Entrepreneurial Behaviour and Research, Vol. 4 No. 2, p. 1. Dyson, J. (1997), Against the Odds, Orion, London. Facilities (2000), ‘‘The search begins for the entrepreneur of the year 2000’’, Facilities, Vol. 18 Nos 5/6), p. 61 Hamilton, R.T. and Harper, D.A. (1994), ‘‘The entrepreneur in theory and practice’’, Journal of Economic Studies, Vol. 21 No. 6, pp. 3-18. HEFCE (2001), HEFCE Strategic Plan 2001-06, July. Littunen, H. (2000), ‘‘Entrepreneurship and the characteristics of the entrepreneurial personality’’, International Journal of Entrepreneurial Behaviour and Research, Vol. 6 No. 6, pp. 295-309. Henderson, R. and Robertson, M. (1999), ‘‘Who wants to be an entrepreneur? young adult attitudes to entrepreneurship as a career’’, Education + Training, Vol. 41 No. 5, pp. 236-45. Mitchell, R.K. (1997), ‘‘Oral history and expert scripts: demystifying the entrepreneurial experience’’, International Journal of Entrepreneurial Behaviour and Research, Vol. 3 No. 2, pp. 122-39. Powell, J.A. (1998), ‘‘Action learning in construction’’, Proceedings of ENTAC, Porto Negre´. Powell, J.A. (1999a), ‘‘Using learning styles and action learning, over the Internet, to drive learning for innovation in small and medium enterprises: a case study from construction’’, in van Molen, H.J. (2001), Virtual University? Educational Environments of the Future: Proceedings from a Symposium held at the Wenner-Gren Centre, Stockholm in October, 1999, Portland, London. Powell, J.A. (1999b), ‘‘Action Learning for continuous improvement & enhanced innovation in construction’’, in Tommelein, I. (1999), Lean Construction, University of California, Berkeley, CA, July. QAA (2000), General Business and Management Subject Benchmark, Quality Assurance Agency for Higher Education, Gloucester. QAA (2002), ‘‘Academic standards: Master’s awards in business and management’’, available at: www.qaa.ac.uk/crntwork/benchmark/mast/ MBAintro.htm Schindehutte, M. and Morris, M.H. (2001), ‘‘Understanding strategic adaptation in small firms’’, International Journal of Entrepreneurial Behaviour and Research, Vol. 7 No. 3, pp. 84-107. Sullivan, R. (2000), ‘‘Entrepreneurial learning and mentoring’’, International Journal of Entrepreneurial Behaviour and Research, Vol. 6 No. 3, pp. 160-75. Thompson, J.L. (1999), ‘‘The world of the entrepreneur – a new perspective’’, Journal of Workplace Learning: Employee Counselling Today, Vol. 11 No. 6, pp. 209-24.

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Towards a healthy high street: identifying skills needs in small independent retailers John Byrom Cathy Parker and John Harris The authors John Byrom is a Research Assistant and Cathy Parker is a Senior Research Fellow in the Department of Retailing and Marketing, and John Harris is a Senior Lecturer in the Department of Business Studies, all at the Manchester Metropolitan University Business School, Manchester, UK. Keywords Training, Skills, Retail trade, Small firms, United Kingdom Abstract This paper details work undertaken to identify and assess the skills needs of small, especially food-related, independent retailers in the United Kingdom. The paper, part of a European Social Fund (ESF) assisted project: ‘‘Towards a healthy high street (II)’’, considers the specific skills areas deemed to be lacking at present in the sector. From this, higher-level learning materials will be developed which relate to the skills areas identified. The prime source of evidence for skills needs identification draws upon research undertaken as part of two previous ESF projects. The key aim of this paper is to combine and articulate the findings from this earlier ESF research with material published by practitioners, academics and government pertaining to the provision of training in this vital sector of the economy. Three key areas upon which to focus training in the sector are explored: ‘‘Building and sustaining competitive advantage’’, ‘‘E-commerce’’ and ‘‘Retail operations’’.

Introduction The small independent retail sector The small independent retail sector in the UK has been progressively ‘‘squeezed’’ throughout the last 30 years. Once the bastion of both food and non-food shopping, the sector has long been overtaken as the main site for shopping by the large, multiple retailers. Even in the small independent food retail sector, the traditional advantage offered by such shops, that of convenience, has been increasingly eroded by the actions of the major grocery retailers which have implemented 24-hour opening at many of their stores and established new convenience formats such as Tesco’s ‘‘Metro’’ and ‘‘Express’’ and J. Sainsbury’s ‘‘Local’’ (Baron et al., 2001). A number of authors, including Baron et al. (1999), Dawson and Kirby (1979), Peston and Ennew (1998), and Pickering et al. (1998) have identified the competitive pressures affecting small retailers as falling into six key areas. These have been summarised by Byrom et al. (2000a, p. 366) as follows: First, there is increasing competition in the retail sector itself caused by the dominance of the large retailers, price wars, reduction in supplier lines and the encroachment of the large and multiple retailers into the convenience shopping market. Second there are certain changes in the political and economic environment that impact on small independent retailers, such as legislation concerning planning, weights and measures and food handling; local road and traffic changes; and the minimum wage legislation. Third, economic factors such as the recent punitive interest rates have reaped their toll on the sector. Fourth there are the factors that affect the whole small and medium enterprise (SME) sector, such as the tendency of small business owners to avoid market research activities, investment into training and succession planning . . . Fifth, there have been major shifts in patterns of population, affecting how much time people spend at work with resultant impacts on shopping roles and behaviours; all of which can influence independent retailers. Finally, recent innovations in technology, and especially e-commerce look set to revolutionise the sector.

Electronic access The research register for this journal is available at http://www.emeraldinsight.com/researchregisters The current issue and full text archive of this journal is available at http://www.emeraldinsight.com/0040-0912.htm

Education + Training Volume 44 . Number 8/9 . 2002 . pp. 413–420 # MCB UP Limited . ISSN 0040-0912 DOI 10.1108/00400910210449259

The authors gratefully acknowledge the financial support of the European Social Fund in the execution of this research. An earlier version of this paper was presented at the 2001 Annual Manchester Conference for Contemporary Issues in Retail Marketing held at the Manchester Metropolitan University on 7 September.

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The quote presented above would suggest that the state of small independent retailing is such that it is in a state of terminal decline. Indeed, the number of grocery stores, for example, had dropped from a level of 147,000 in 1961 to just 28,700 by 1997 (CB Hillier Parker and Savill Bird Axon, 1998), the result of significant consolidation into larger outlets through the growth of multiple organisations. Yet it is also becoming apparent that the provision of relevant training into the sector may go some way to arresting this decline (Parker and Byrom, 2000). The next part of this section, therefore, turns to consider the aims of this paper in the light of the potential role that training can play in improving the lot of small independent retailers. Aims of the ‘‘Towards a healthy high street’ (II)’’ project and this paper Earlier ESF-assisted projects undertaken within The Manchester Metropolitan University Business School (‘‘Small retail skills forecasting’’ and ‘‘Towards a healthy high street (I)’’) have sought, respectively, to forecast skill needs in the independent retail sector and to assess the role of training in the same sector to improve the ‘‘health’’ of the UK’s high streets. The aim of the current project (‘‘Towards a Healthy High Street (II)’’) is to analyse and forecast: . . . changes in the sector’s skills needs, developing and delivering new distance learning materials customised to these business needs, establishing and operating a mentoring brokerage programme to promote workplace learning and establishing a support network between small and large retailers, NTOs and the university (Manchester Metropolitan University, 2000, p. 1).

operations’’, have been chosen as a result of earlier related work, as mentioned above. The envisaged route through the programme, leading eventually (if desired) to the award of a University Certificate in SME Retail Management – equivalent to NVQ Level IV[1], along with indicative detail of modules is shown in Figure 1. The aim of this paper, therefore, is to present a secondary review of skills needs in the small, specifically micro-sized, independent retail sector in order to illustrate the relevance of the proposed training provision. This is achieved through the synthesis of material gathered for the two earlier projects. The next part of this section briefly discusses the importance of SMEs in the UK economy and highlights the role of training for such organisations. This is followed by brief consideration of the methodology adopted. The discussion then moves on to provide justification for the choice of three areas proposed in the original bid (Manchester Metropolitan University Business School, 2000). The final section then concludes the paper with some conclusions and suggests some provisional recommendations prior to the wholescale rollout of the training programme and the online mentoring scheme. SMEs: the role of training Despite decreases in the number of independently owned shops in the UK, it is still the case that overall, SMEs, in terms of actual numbers at least, continue to dominate Figure 1 Progression routes and core mandatory/core elective modules

Distance learning modules (equivalent to NVQ Level IV) will be developed which will be related to the skills and training needs of small independent retailers. In order to develop materials most relevant to the requirements of such organisations, one of the objectives listed in the original bid for ESF support stressed that the project would undertake ‘‘an analysis of the skill needs of small independent retailers in the food sector, providing the basis for the development of training materials and programmes’’ (Parker and Harris, 2001, p. 5). The three areas of training provision that form the proposed core of the project’s distance learning effort, namely ‘‘Building and sustaining competitive advantage’’, ‘‘E-commerce’’ and ‘‘Retail 414

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the UK economy. Although responsible for only 42 per cent of the turnover of the UK economy, SMEs account for some 99 per cent of the total number of businesses (Manchester Metropolitan University, 1999). In terms of defining small, medium and micro-sized businesses, the Commission of the EC (1992) has presented the following guidelines based on the number of employees within firms: . micro = 0-9 employees; . small = 10-99 employees; and . medium = 100-499 employees. In the wholesale, retail and repairs sector of the economy, a recent review in the Labour Market Quarterly Report (1999) has stated that 46.4 per cent of such businesses have no employees at all whilst 52.6 per cent of businesses have between one and 49 employees. The focus here on small, especially micro-sized, independent retailers is therefore borne out by the preponderance of this category in the retail sector of the economy with 99 per cent of wholesale, retail and repair enterprises classed as small or micro-sized. Despite the prevalence of small and microsized enterprises in the UK, it is also the case that formal training in the sector is generally seen as a low priority. Professor Allan Gibb, chairman of Durham University Business School and a leading expert on SMEs, has recently outlined the obstacles to training amongst small firms at a Skills and Enterprise Conference held in Nottingham (Skills and Enterprise Network, 2000a). He noted that time and money are often given as the main reasons for small firms not offering training. Also at issue is the hostility of many firms towards formal education and the fact that many could not see the link to company profits or the relevance of training that was not deemed to be closely related to tasks gained ‘‘on the job’’. However, research carried out for the Department for Education and Employment (Winterton et al., 2000) looking at the future skill needs of managers, stresses the role of training in the rapidly changing external environment faced by organisations. The report indicates that more time will be required for management development and that managers will in future require knowledge-based technical specialisms in addition to generic management competences. Clearly, for retail

organisations to prosper in the highly competitive markets of tomorrow, it will not be enough for them to focus on tried and tested styles of management and operations with little emphasis on formal training. The training modules in the ‘‘Towards a healthy high street (II)’’ project, which focus on higher-level skills acquisition related to retail business development, will instead provide target beneficiaries with workable and relevant routes to sustainability and growth. Having presented a concise introduction to the aims and objectives of this paper and the importance of SMEs and training in the UK economy, the paper now turns to consider the methodology adopted to analyse the skills needs apparent in the independent retail sector.

Methodology The methodology adopted here largely entails a qualitative secondary analysis of material gathered as part of the two ESF-assisted projects undertaken within the Business School that were listed above. Combined, the two projects resulted in a significant published output including the following: . two refereed academic journal articles published or under review (Baron et al., 2001; Byrom et al., 2000a); . two refereed academic conference papers (Byrom et al., 2000b; Oldfield et al., 2000); . three project reports (Baron et al., 1999; 2000; Parker and Byrom, 2000); . one poster presentation at an academic conference (‘‘Towards a healthy high street’’ Project Team, 2000); . one report in the trade press (Urban Environment Today, 2001). The earlier ESF projects employed a diverse methodology to achieve their aims of assessing the skills needs of small independent retailers and effecting training in the sector. They involved, inter alia, a large-scale questionnaire survey of convenience retailers, exploratory interviews and discussion with practitioners and industry representatives, and the auditing and evaluation of relevant training materials. The projects also benefited from the input of valued ‘‘partners’’ at series of meetings including representatives from various NTOs, retail trade associations,

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multiple retailers and training organisations. As this paper is a secondary review of the earlier work, it naturally draws on these methods. In addition, further analysis of academic, government and practitioner training literature sources has taken place. The choice of three types of modules to form the core of distance learning provision as part of this project, namely ‘‘Building and sustaining competitive advantage’’, ‘‘E-commerce’’ and ‘‘Retail operations’’ is based first on knowledge established through the course of the execution of the two earlier projects. Second, through its secondary review of literature and material, this paper provides further evidence for the choice of the three areas. The next stage of the skills needs analysis entails confirmatory interviews on our choice of topics with a number of stakeholders on the High Street, for example owner/managers of independent retail outlets, town centre managers, and representatives from NTOs and other trade associations.

Discussion The paper now moves to consider in turn the choice of the three areas for the project: ‘‘Building and sustaining competitive advantage’’, ‘‘E-commerce’’ and ‘‘Retail operations’’. It draws on published literature and provides discussion of the relevance of these three areas of training provision. First, however, it is necessary to articulate why more ‘‘higher-level’’ skills needs are being addressed through the choice of these unit areas. Research carried out as part of the ‘‘Towards a healthy high street (I)’’ project identified a number of skills needs amongst both small independent retail managers and employees (Parker and Byrom, 2000): (1) Owner/manager: . training needs; . financial and accounting practices; . VAT requirements; . health and safety; . legal requirements; . promotion and advertising skills; . IT; . strategic thinking; . ‘‘switching on’’ to learning; . group working; . problem solving; . negotiation;

communication; and supervisory/management skills. (2) Employees: . interpersonal skills; . telephone skills; . numeracy; . selling; . stock rotation; . product knowledge; . cash handling; . literacy; . IT; . health and safety; . customer service; . point-of-sale technology; . security and emergency procedures; and . supervisory skills. . .

From the list of training needs here, it can be seen that they relate largely to more basic, generic types of skills. Such skills are, of course, manifestly required by many SMEs if they are to be successful (see also Skills and Enterprise Network, 1998; 2000b). The decision was taken for the ‘‘Towards a healthy high street (II)’’ project to move away from training in basic numeracy, customer service and food hygiene[2], to concentrate on higher-level skills development. As noted by Baron et al. (2000, p. 9) in their research undertaken for the ‘‘Small retail skills forecasting’’ project: Owners and managers of small retail businesses perceive that they and their staff are competent in general retail skills, customer care, health and safety, hygiene and store operations. Current training programmes in these areas and/or selfteaching appear to be adequate.

In their discussion of competence-based training in large multiple retail organisations, Davison et al. (1998, p. 239), for example, also suggest a move away from basic level, generic skills in the following quote:

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Due to the nature of retailing prior to the 1980s, the need for retail-specific courses at the undergraduate level was not recognized. Whilst many of the skills, knowledge and abilities required for effective employee performance were (and still are) generic and transferable, the retail environment has undergone significant changes. For example, increased competition, the introduction of information technology and structural changes require today’s managers to be more aware of the environment and to respond proactively and flexibly to the forces impinging upon it.

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The decision of this project to follow this lead and focus on more retail business-specific, higher-level skills development is in part justified by the experiences of large retail organisations who have sought to ‘‘buy-in’’ to industry relevant education. This is evidenced by larger retailers’ support for undergraduate retail education, such as that offered by the Manchester Metropolitan University Business School and others, and the provision of training for staff on programmes pertaining directly to retail management development. A report by the TEC National Council (1998, p. 3) provides further support for focusing on higher-level skills acquisition with its recognition that: . . . [m]anagement development in SMEs . . . is best delivered within the context of business development . . . [d]elivery of management development services should be . . . competence based; operationally driven . . . [and] promoted as something different from existing management provision.

A recent report into management skills by Steven Johnson of Middlesex University Business School (quoted in Skills and Enterprise Network, 1999) gives further justification for this route with its recognition of the need for flexibility in any training provision (either one or all modules can be taken by beneficiaries) for SME managers. It also notes that the provision of training should be linked to the development of the individual business and that owner/managers need to see that training ‘‘will have a clear benefit in terms of business performance, and will help him or her to tackle immediate and specific issues’’ (Skills and Enterprise Network, 1999, p. 4). To that end, this paper now discusses the justification behind the choice of the three specific skills areas through consideration of the relevance of each area to small independent retailers. Building and sustaining competitive advantage The area of ‘‘Building and sustaining competitive advantage’’ involves potential beneficiaries taking on board modules entitled ‘‘Retail trends in the 21st century and their impact upon SME retailers’’, ‘‘Alternative sources of competitive advantage’’ and ‘‘Building and maintaining relationships’’. It is expected that training in these areas can enable participants to see the value that can be added to their businesses. The topic of

‘‘Building and sustaining competitive advantage’’ also emphasises the need for training provision to relate directly to the development of retail businesses. A conclusion from the ‘‘Towards a healthy high street (I)’’ project was that ‘‘the training of retail SMEs is best carried out within the context of business development and planning’’ (Parker and Byrom, 2000, p. 29). Training such as this, which highlights the benefits that small independent retailers can offer including the role of personal service and the provision of a social experience for customers (Baron et al., 2001), will hopefully enable beneficiaries to realise where competitive advantage can be applied and leveraged over others and also to become aware of particular market openings that may be appropriate for them. Related to this, a quote from Pickering et al. (1998, p. 46) on improving management performance in the sector seems an appropriate point at which to conclude this section and highlights how training in the area of competitive advantage will be of value: The establishment of appropriate niche market positions will not help the survival of the neighbourhood store if the internal management of the store is inadequate . . . a sense of professionalism, personal service and pride in sustaining the quality of the outlet and its services will assist the efforts to achieve a viable position in the market.

E-commerce The advent of new technologies, including electronic point of sale (EPoS) and the Internet, has had a significant effect on the way business is conducted: this is expected to continue into the future. It has been decided to offer modules relating to ‘‘E-commerce’’ as part of the ‘‘Towards a healthy high street (II)’’ project, with units on ‘‘E-commerce: rhetoric and reality’’, ‘‘Going on-line: how to set up a web-page’’ and ‘‘Trading on-line’’. This is in recognition of the important role that e-commerce is having at the moment in retailing and its perceived role in the future. Research undertaken by Baron et al. (2001) noted that there was a low Internet take-up amongst small independent retailers: only 15 per cent of survey respondents had a Web site for their businesses. Further work by Peston and Ennew (1998) also acknowledges that small independent retailers find it hard to realise the advantages of trading through the

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medium of the Internet. Baron et al. (2001, p. 397) also found that: . . . the respondents who have not set up a Web site believed that setting up a Web site would be difficult and would require specialist advice, and that the creation and maintenance of the site would be costly. This is in contrast to those who have actually set up a Web site. There is, therefore, an identified need for training and information on how to set up a Web site (and the values of so doing).

A shortage of information technology (IT) and information and communication technology (ICT) skills in the economy has been recognised by a number of government bodies of late including the National Skills Task Force (Blunkett, 2000; National Skills Task Force, 1998; 2000a; 2000b; Skills and Enterprise Network, 2000c). Any training which enables an enhanced level of IT and ICT skills to be effected will go some way to answer such calls for a more IT-literate workforce. From the ‘‘Towards a healthy high street (I)’’ project, it can be seen that courses for small retailers which focus on the use of the Internet can be successful: an ESFassisted ADAPT project set up by Stockport College of Further and Higher Education, for example, has allowed local small retailers to benefit from the provision of training in this area (Parker and Byrom, 2000). Evidence from a recent Internet training project amongst small firms (Blackburn and Athayde, 2000) has found that Internet awareness and the knowledge of the benefits of Internet connection for such firms can be raised through the roll-out of a training programme. Retail operations There is little in either government, academic or training literature to suggest that the area of retail operations is one that is currently suffering a deficit of training provision in the small independent retail sector. However, anecdotal evidence from customers of various small independent retail establishments can sometimes reveal otherwise! It is likely that although owner-managers of retail outlets may not themselves identify a need for further training in retail operations (Baron et al., 2000), many could benefit from education in merchandising and product display (see also Byrom et al., 2001). The decision to offer ‘‘Positioning for profit’’, ‘‘Controlling operations’’ and ‘‘The retail game’’ as part of the current programme of training provision is intended to benefit small independent

retailers through highlighting this vital part of their retail offer. Indeed, retail operations is recognised by City and Guilds (1999) as an important component to retail education, given that it is available as a Modern Apprenticeship to NVQ Level 3. The Association of Business Schools also acknowledges this area with operations management and shop floor control offered as constituent elements to a recent MBA by distance learning package (see Sladen, 1998).

Conclusions From the discussion posited above, it is clear that the areas of training provision decided upon as part of this project have their routes in clear articulation of perceived training needs in the literature. Evidence from earlier ESF-assisted projects further highlights why it will be beneficial to focus on ‘‘higher-level’’ relevant skills areas as opposed to the more generic topics such as health and safety, bookkeeping and customer service. It is hoped that micro-sized independent retailers will benefit significantly from training in these three areas and that topics will relate directly to them and their businesses. However, analysis of skills needs is but one part of a bigger picture. Clearly, appropriate ‘‘hooks in’’ need to be devised to encourage retailers to take part in any training programme (Parker and Byrom, 2000). Such debate has been beyond the scope of this paper: however it can be stated that making any training flexible and relevant to the sector must, of course, be paramount. The establishment of an online mentoring brokerage system will also, it is hoped, aid independent retailers in the growth of their businesses; providing such a system avoids the pitfalls outlined by O’Dwyer and Ryan (2000) who note that the risk of a breach of confidentiality and the danger of being drawn into using systems that work for a larger business but not necessarily a smaller one may negate against the successful deployment of a mentoring scheme. The discussion presented above suggests that training provision in the areas of ‘‘Building and sustaining competitive advantage’’, ‘‘E-commerce’’, and ‘‘Retail operations’’ has fundamental justification in terms of evidence from our earlier ESFassisted projects and other practitioner and

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academic literature. The next step in the skills needs analysis lies in confirmatory interviews with other relevant stakeholders to assess the viability of offering training in the areas identified here and elsewhere.

Notes 1 For a discussion on the experience of NVQ implementation in diverse types of organisations, including retail ones, see Davison et al., 1998; Hales et al., 1999; Matlay and Hyland, 1997; Messenger, 1997. 2 See Mortlock et al. (2000) for a review of the level of food hygiene training in the UK food industry, including the small independent retail sector.

References Baron, S., Harris, K., Leaver, D. and Oldfield, B.M. (2001), ‘‘The independent food retailer: beyond convenience’’, The International Review of Retail, Distribution and Consumer Research, Vol. 11 No. 4, pp. 383-402. Baron, S., Leaver, D., Oldfield, B.M. and Cassidy, K. (1999), Economic and Social Trends and the Non-Affiliated Independent Retailer, the Manchester Metropolitan University Small Retail Skills Forecasting Unit, Manchester. Baron, S., Leaver, D., Oldfield, B.M. and Cassidy, K. (2000), Independent Food and Grocery Retailers: Attitudes and Opinions in the Year 2000, the Manchester Metropolitan University Small Retail Skills Forecasting Unit, Manchester. Blackburn, R. and Athayde, R. (2000), ‘‘Making the connection: the effectiveness of Internet training in small businesses’’, Education + Training, Vol. 42 Nos 4/5, pp. 289-98. Blunkett, D. (2000), Opportunity for All: Skills for the New Economy: Initial Response to the National Skills Task Force Final Report from the Secretary of State for Education and Employment, Department for Education and Employment, London. Byrom, J.W., Harris, J. and Parker, C. (2000a), ‘‘Training the independent retailer: an audit of training needs, materials and systems’’, Journal of European Industrial Training, Vol. 24 No. 7, pp. 366-73. Byrom, J.W., Harris, J. and Parker, C. (2000b), ‘‘Training the independent retailer: an audit of training needs, materials and systems’’, in Proceedings of the Academy of Marketing Annual Conference, University of Derby, Derby, 5-7 July, CD-ROM. Byrom, J.W, Medway, D. and Warnaby, G. (2001), ‘‘Issues of provision and ‘‘remoteness’’ in rural food retailing – a case study of the southern Western Isles of Scotland’’, British Food Journal, Vol. 103 No. 6, pp. 400-13. CB Hillier Parker and Savill Bird Axon (1998), The Impact of Large Food Stores on Market Towns and District Centres, The Stationery Office, London.

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Skills and Enterprise Network (2000b), Labour Market and Skill Trends 2000, Department for Education and Employment, London. Skills and Enterprise Network (2000c), ‘‘The Skills Task Force final report’’, Skills and Enterprise Executive, issue 3/2000, Department for Education and Employment, London. Sladen, C. (Ed.) (1998), Internet Learning Materials for MBA Students, University of Bristol, Bristol. TEC National Council (1998), Management Development for Small & Medium Enterprises: Setting out the Challenge, TEC National Council, London. ’’Towards a healthy high street’’ Project Team (2000), ‘‘Towards a healthy high street: training the independent retailer’’, poster presented at the Academy of Marketing Annual Conference, University of Derby, Derby, 5-7 July. Urban Environment Today (2001), ‘‘Small retailers ‘need more targeted training’’’, Urban Environment Today, 18 January, p. 5. Winterton, J., Parker, M., Dodd, M., McCracken, M. and Henderson, I. (2000), Future Skill Needs of Managers, Department for Education and Employment, London.

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Entrepreneurship education and training in Canada: a critical assessment A.B. Ibrahim and K. Soufani

The authors A.B. Ibrahim is Canadian Imperial Bank of Commerce Distinguished Professor of Entrepreneurship and Family Business Director, Centre for Small Business and Entrepreneurial Studies and Associate Dean, John Molson School of Business, Concordia University, Montreal, Canada. K. Soufani is Assistant Professor, Department of Finance, John Molson School of Business, Concordia University, Montreal, Canada. Keywords Entrepreneurialism, Education, Training, Small firms, Management, Canada Abstract Management training is constantly seen as an effective way of providing small-medium size enterprises with the management expertise they require in order to develop and grow. The SME sector in Canada plays a prominent and essential role in the growth and expansion of the domestic economy through its contribution to the domestic output and job creation. However, this sector suffers from a considerably high failure rate that is largely attributed to the lack of management skills and planning, which can potentially be improved by providing training and education in different business areas. This paper assesses the entrepreneurship education and training efforts in Canada and identifies the common challenges that face this process. Electronic access The research register for this journal is available at http://www.emeraldinsight.com/researchregisters The current issue and full text archive of this journal is available at http://www.emeraldinsight.com/0040-0912.htm Education + Training Volume 44 . Number 8/9 . 2002 . pp. 421–430 # MCB UP Limited . ISSN 0040-0912 DOI 10.1108/00400910210449268

The small business sector plays a significant role in the health and growth of the Canadian economy and is emerging as Canada’s strategic sector in the new millennium. In 2001 over 2.5 million firms in Canada were categorized as small businesses, representing over 98 percent of the total number of Canadian businesses. As a group, Canadian small businesses employ nearly 60 percent of the work force and produce 45 percent of the gross national product and approximately two-thirds of the new jobs (Ibrahim, 1999; Ibrahim and Ellis, 2002). Despite the importance of the small business sector to the Canadian economy, the failure rate in this segment is alarming. It is estimated that approximately two thirds of all start-ups fail within the first five years. According to Industry Canada – Entrepreneurship and Small Business Office the bankruptcies rate is extremely high. Research studies of small business failure in Canada have attributed the high failure rate to lack of management skills (Ibrahim and Ellis, 1998; 1986; Landesberg and Edmunds, 1983). Managerial skills include: strategic planning, marketing, cash management, networking, negotiation and general management skills. According to a study by Dun and Bradstreet (1983), 90 percent of small business failure in Canada is attributed to managerial incompetence.

Training and education of entrepreneurs in Canada Training and education of Canadian entrepreneurs have been repeatedly cited as an effective way to reduce small business failure in Canada (Ibrahim and Ellis, 2002; Menzies and Gasse, 1999; Carrier, 1999; Menzies, 1998; Blais, 1997; Be´chard and Toulouse, 1997). A recent study by Menzies and Gasse (1999) suggests that entrepreneurship education and training are valuable tools to enhance the managerial skill of Canadian small business owner and managers. The authors noted that entrepreneurship training is gaining popularity among Canadian universities.

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The objectives of this research are twofold: first to assess and review entrepreneurship education and training efforts in Canada, in particular the role of the various government and non-government organizations in the process; second to identify and discuss the challenges facing entrepreneurship education and training. A number of organizations play a significant role in training Canadian entrepreneurs. These include: . universities and colleges; . small business centres affiliated to universities; . The Business Development Bank of Canada (BDC); . major Canadian banks; . the Institute of Canadian Bankers (ICB); . the Canadian Federation of Independent Businesses (CFIB); . youth employement services (YES); . provincial small business centres; . YMCA programs. In the following sections we discuss the contribution of each of these organizations to entrepreneurship education and training. Entrepreneurship programs in Canadian universities University entrepreneurship programs tend to be the driving force behind training Canadian entrepreneurs. Menzies (1998) and Menzies and Gasse (1999) found that 53 Canadian universities offer courses in entrepreneurship and small business management aimed at enhancing managerial skills for aspiring and existing entrepreneurs. Indeed previous research has found a significant relationship between training and the propensity for entrepreneurship career. Upton et al. (1995) found that 40 percent of those who attended courses in entrepreneurship have started their own businesses, while 30 percent joined family businesses and only 30 percent worked for large organizations. Ibrahim and Ellis (1986) reported similar results. Those attending entrepreneurship courses have a high tendency to start their own businesses compared with those attending other business courses. Further research evidence suggest that entrepreneurship training is critical to venture success (Ibrahim et al., 2001; Be´chard and Toulouse, 1997; Vesper, 1993;

McMullan and Vesper, 1987; Ibrahim and Goodwin, 1986). A Canadian study by Be´chard and Toulouse (1997) suggests that entrepreneurship knowledge can be grouped into three different categories. These include: (1) orientation and awareness; (2) new venture creation; (3) venture management – survival and growth. Menzies and Gasse (1999) found that these three areas have been the focus of most entrepreneurship education and training programs in Canadian universities. Entrepreneurship courses covered topics such as developing the business plan, the venture creation process and small business management. However, Menzies and Gasse (1999) noted that Canadian entrepreneurship courses tend to focus more on the pre-venture creation process and less on management of existing small businesses. This limitation was supported by Vesper and Gartner’s (1999) international survey of entrepreneurship education. Further several studies of entrepreneurship training in Canada have noted the need to provide technological training to Canadian entrepreneurs in order to enhance their innovation skills in an increasingly hostile and competitive environment. Clarke and Reavly (1987) and Clarke (1990) suggest that Canadian engineering schools should provide technical training to entrepreneurs. Blais (1997) contends that Canadian engineering schools should play a major role in training technological entrepreneurs. Menzies and Paradi (1999) found that 40 percent of engineering graduates who had received entrepreneurship training had started their own small business. Entrepreneurship and small business centres Research studies suggest that entrepreneurship and small business centres affiliated to universities and colleges play a critical role in training and mentorship of entrepreneurs and managers of small businesses. Menzies and Gasse (1999) found that 32 Canadian universities have an entrepreneurship and small business centre. These centres provide training and mentorship to local small business owners

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and managers in their communities. However the impact of these centres on the growth and success of small businesses in their communities is not known. The Business Development Bank of Canada (BDC) BDC is a Crown Corporation and is considered Canada’s small business bank. Its role is to promote the establishment and development of small and medium sized businesses in Canada. A key activity of the BDC is to provide training, counseling and mentoring of entrepreneurs and small business managers. The bank has provided training to various groups including the young, women, and exporters, expanding and Aboriginal entrepreneurs. The objective of training and mentorship is to promote sound management practices in small business. However the BDC training activity is limited and has yet to reach its full potential. Major Canadian banks In the past few years the major Canadian banks have played a key role in providing training not only to Canadian entrepreneurs but also to bankers and risk managers who deal with small businesses. The contribution of key players is discussed below. The Canadian Institute of Bankers has developed a small business program to provide rigorous training to account managers in various financial institutions on small business including management, risk, skills and legal aspects. The first author of this paper has been a principal developer and advisor of this program (Ibrahim, 1999; Ibrahim and McTavish, 1998). Over 20,000 account managers dealing with small businesses have received entrepreneurship training since 1994. Further, major Canadian banks, individually or through joint agreement with universities, and non-government organizations have provided much needed training and mentorship programs to Canadian entrepreneurs. For example the Canadian Imperial Bank of Commerce has supported small business training and mentorship programs at both Concordia and Carleton Universities. The Bank of Montreal, Institute for Small Business in conjunction with the University of Western Ontario have developed a three-day training program for

entrepreneurs of high growth small businesses. The Royal Bank has also developed a training course specifically designed for women entrepreneurs. The bank also offers an entrepreneurship-training program for the First Nations community in New Brunswick as well as a program for knowledge-based entrepreneurs. The Scotia bank also supports a training program for women entrepreneur at Simon Fraser University as well as a training program for Aboriginal small businesses at the University of Saskatchewan. Further the Toronto Dominion Bank has developed a training program to educate small business owners and managers about how to use the Internet. The Association of Canadian Bankers has also teamed with Concordia University to provide training to Aboriginal and minority entrepreneurs. The association also provides educational self-learning materials for Canadian entrepreneurs. However, it must be noted that most of these training activities by the banking industry started in the early 1990s as a result of public pressure (Report of the Standing Committee on Industry, 1994; Wynant and Hatch, 1990). Further these efforts are still not sufficient in light of the high failure rate in the Canadian small business sector (Report of the Task Force on the future of the Canadian Financial Service Sector, 1998; Ibrahim, 1999). Non-government organizations (NGOs) Non-government organizations are active in the training of Canadian entrepreneurs. These include the Canadian Federation of Independent Business, Youth Employment Services and YMCAs. We discuss their contributions briefly: . Youth Employment Services (YES). These are non-profit organizations created by business leaders, educators and other volunteers. A key activity of these organizations is to provide training seminars to local entrepreneurs. . The Canadian Federation of Independent Business (CFIB). The CFIB is an advocacy organization for small and medium sized enterprises in Canada. The CFIB publish statistics as well as educational materials for self-learning. . YMCA. The YMCA has developed a number of programs to train

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entrepreneurs across Canada. These programs are supported by volunteers, local businesses and banks. For example the Young Women’s Entrepreneurship program is supported by the Canadian Bankers Association. While the contribution of these organizations is admirable it is still limited, and lacks continuity despite the significant growth of the small business sector and in particular new economy small firms such as soft and hardware, biotech and communication companies. If these companies are to remain competitive, training efforts must be intensified and conducted within a coherent framework. Federal and provincial initiatives Provincial government with the support of the Federal government and private sectors developed province wide network of Small Business Enterprise Centres. A key activity of these centres is training and mentorship of local entrepreneurs. For example, the Ontario government has established five centres across the province to support small business. Further Federal government organizations such as Industry Canada and Canada Economic Development have provided support in the area of entrepreneurship training. However Federal and provincial efforts lack coherence and focus, despite the intense competition and the hostile environment facing small Canadian firms both in the domestic and global markets (Ibrahim, 1999; Matlay, 1997).

The training challenge We believe entrepreneurship training in Canada faces a number of challenges. First, both empirical and conceptual research on entrepreneurship training in Canada is lacking. Most studies tend to be survey type and lack methodological rigor. Further, these studies tend to focus on entrepreneurship education and training in Canadian universities and affiliated Small Business Centres. This may be partly due to lack of data available to researchers on the contributions of various Canadian organizations to entrepreneurship training.

We believe that data sharing is the key to developing an effective entrepreneurship training strategy in Canada. Second, there is a lack of conceptual clarity on the appropriate paradigm for entrepreneurship training. Basically, there are no systematic efforts to identify the personality traits and skills that make for a successful entrepreneur. As a result there is confusion about the appropriate approach to entrepreneurship training. Third, there is a lack of a national strategy for entrepreneurship education and training. This is a major concern to many observers. Indeed globalization may force many Canadian small companies out of business as a result of the lack of technical skills and managerial competencies (Ibrahim, 1999; Matlay, 1997). Therefore, if the Canadian small business sector is to remain competitive in a free trade environment, a coherent national policy agenda must be developed. We believe the national agenda must first develop a framework of entrepreneurship training in terms of the appropriate traits and skills that are necessary for a successful entrepreneur. Second, it must identify the various organizations involved in entrepreneurship training. Third, it must coordinate the training activities between these organizations. Finally, it must ensure that these organizations work within the national framework.

Entrepreneurship training and education in Canada: a conceptual model The previous discussion points to a need for a conceptual framework for entrepreneurship training in Canada. Indeed despite the high failure rate in the Canadian small business sector little effort has been made to explore training and development needs of entrepreneurs and identify the role of the various organizations in the process. In this section we offer a conceptual model of entrepreneurship education and training in Canada. The model addresses a number of fundamental questions: . What are the traits and skills associated with successful entrepreneurs? . Can we predict the personality traits associated with successful entrepreneurs?

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.

What is the appropriate training and development approach? What is the role of the various organizations in training and development of entrepreneurs?

Figure 1 depicts the proposed model.

Entrepreneurship traits – the right stuff Many research studies have examined the personality traits associated with successful entrepreneurs personality traits such as high need for achievement, independence, moderate risk taking propensity, tolerance for ambiguity, and innovation were found to have a significant impact on the making of a successful entrepreneur (McClelland, 1985; Hornaday and Aboud, 1978; Ibrahim and Goodwin, 1986). We briefly discuss these traits. David McClelland (1985) noted in his classical work, The Achieving Society that the entrepreneur’s need for achievement predisposes them to perform different activities exceptionally well as a measure of achievement. McClelland’s theory of the need for achievement (n-Ach) identified three traits associated with successful entrepreneurs: (1) the desire to solve problems and gain satisfaction from attaining goals that they have set and prioritized themselves; (2) the ability to take moderate risks after assessing the alternatives; and (3) the need for feedback as a measure of their success. According to McClelland (1987), those who score highly on the n-Ach were found to have a higher probability of success in business and

of benefiting from business training and education. McClelland’s need for achievement has been cited in the small business literature as a fundamental trait associated with successful entrepreneurs. A moderate risk-taking propensity is a typical trait associated with successful entrepreneurs and venture creation. Research studies found that successful entrepreneurs do not deliberately seek out high-risk situations, nor do they strive to avoid risk altogether. In essence they are willing to accept the risk and uncertainty inherent in new opportunities (McClelland, 1987; Bird, 1989; Ibrahim and Ellis, 1990). Mintzberg and Waters (1982) noted that the notion of controlled boldness is a key characteristic of successful entrepreneurs. They often take special care to research problems and consider several alternative solutions before reaching a decision. Tolerance for ambiguity has been identified as one of the traits associated with successful entrepreneurs (McClelland, 1985). This trait refers to the ability of the entrepreneur to perceive ambiguous situations in a positive and challenging way. Ambiguity in this sense is defined as a lack of complete and definitive information. This trait has been found to allow entrepreneurs to organize their thoughts and make decisions under conditions of uncertainty. Schrere (1982) tested a sample of entrepreneurs and managers and found successful entrepreneurs to be more tolerant of ambiguity than corporate managers. Joseph Schumpeter, the great economist, identified innovation as a key characteristic of a successful entrepreneur. In most industries, significant innovations originate from the garages and basements of entrepreneurs such

Figure 1 Conceptual model of entrepreneurship training

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as Steve Jobs, founder of Apple Computers, and William Hewlett and David Packard, founders of Hewlett-Packard. David McClelland’s research confirmed the successful entrepreneur’s predisposition to innovate suggesting a strong relationship between a high need to achieve and innovation (McClelland, 1987). Research studies have also reported that successful entrepreneurs possess a high need for independence and autonomy. Many entrepreneurs have left successful executive careers to start their own business because of the strong need to work independently and be their "own boss" (Ibrahim and Goodwin, 1986; Ibrahim and Ellis, 1990; Bird, 1989). The following list summarizes the entrepreneurial traits associated with successful entrepreneurs: . high need for achievement; . high need for independence; . locus of control; . tolerance for ambiguity; and . innovation.

Managerial skills and competencies A second set of factors associated with successful entrepreneurs is management skills and competence. Unlike large organizations, small firms have limited resources. Thus the entrepreneur must have the management skills to perform various functions effectively. In other words the entrepreneur is expected to assume the role of functional managers that are found in large organizations. This resource constraint requires that the entrepreneur develop skills and competencies in critical areas such as strategy, cash flow management, marketing, human resources, and networking. These areas of competencies have been cited in the small business literature as a critical element to successful small business (Ibrahim and Goodwin, 1986; Hofer and Sandberg, 1987; Birley, 1985). We discuss these skills and competencies briefly. Studies have shown that carving a niche strategy is effective for the small firm (Ibrahim and Goodwin, 1986). Successful entrepreneurs must be able to tailor the firm’s product or service to meet a specific customer need. In a highly competitive cut-throat environment only those firms that have established a unique competitive position

based on their areas of distinctive competence will succeed. Distinctive competence refers to the unique skills and activities that the small firm has developed over rival firms (Porter, 1980; Crawford and Ibrahim, 1985). Hofer and Sandberg (1987), noted management scholars, examined critical success factors in new ventures and concluded that business strategy, the entrepreneur’s traits and characteristics as well as the industry structure are key factors for a venture’s success. Effective management of cash flow was also identified as a critical skill for a successful small business. Indeed, in small business, profits do not guarantee a healthy cash flow situation especially if the firm is growing rapidly without prior financial planning. Financial management skills are therefore critical to a successful entrepreneur. Knowledge of managerial accounting techniques such as break-even and sensitivity analysis as well as cash flow projection and financial performance analysis is a prerequisite for a successful entrepreneur. Further effective management of inventory allows the entrepreneur to reduce cost and obsolescence. However, designing a proper inventory policy requires knowledge of cost system, market condition and suppliers bargaining power (see, for example, Ibrahim and Goodwin, 1986; Said and Hughey, 1977). Research evidence also reveals that marketing skills are critical for a successful entrepreneur and a growing small firm. The flow of goods and offering of services to fulfill the needs and desires of customers are critical to the success of the small firm. Marketing skills include the ability to conduct proper market research to position the product or service competitively, to set an effective pricing and promotion strategy (Levitt, 1980; Kotler, 1987; Greenfield, 1984). Research studies reported that successful small business is the result of the entrepreneur’s ability to divorce themselves from the day-to-day routine business activity and to focus on strategic issues (Ibrahim and Ellis, 1987). Many studies have linked small business failure to the entrepreneur’s reluctance to delegate small details that could be handled by their staff (Ibrahim and Ellis, 1986).

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Furthermore research has found that the entrepreneur’s skills to develop and maintain a network of contacts are critical for operating successful small businesses. Networking provides the entrepreneur with a pool of information and advice (Birley, 1985). The following list summarizes the managerial skills associated with successful entrepreneurs: . strategy; . cash flow management; . financial planning; . marketing skills; . delegation skills; and . networking.

The making of a successful entrepreneur The previous discussion suggests that entrepreneurial traits and managerial skills are key ingredients in the making of a successful entrepreneur and in developing a strong and competitive small business sector. The relationship between particular traits and skills and small business success raises two fundamental questions in the context of training and education: (1) Can we predict entrepreneurial traits? (2) How can we develop and enhance entrepreneurial traits and skills? Prediction and development of successful entrepreneurs Research studies revealed that most entrepreneurial traits can be predicted in individuals early in their life (Kourilsky, 1977; Ibrahim and Goodwin, 1986). In a study by Kourilsky (1977) a number of entrepreneurial traits such as innovation were identified in a sample of elementary school children. Furthermore, McClelland (1987) developed a test that would predict which person shows a greater or lesser probability of succeeding as an entrepreneur. He found that those who score highly on the need to achieve have a high probability of success and are more likely to benefit from business training courses. The ability to predict entrepreneurial traits draws our attention to the significant role of entrepreneurship training and development including the mentorship and the grooming process in pre and early adulthood. Prediction also draws our attention to the significant role of the family, the education system and the government and non-government

organizations that have a vested interest in developing a strong small business sector that is capable of competing effectively worldwide. The family in particular plays a significant role in developing entrepreneurial traits. The role of the family brings to focus the role of the culture. Studies have shown that some cultures see entrepreneurship as a more desirable career opportunity than others and thus encourage individuals at a young age to develop entrepreneurial behavior (Ibrahim and Ellis, 2002). A survey of 11 nations by the Canadian Federation of Independent Business revealed that Canada had the highest percentage of entrepreneurs who were born outside the country. Further research suggests that two-thirds of Canadian entrepreneurs come from families where the father or mother is self-employed. The entrepreneurial environment and parental guidance and support were found to be conducive to fostering entrepreneurial traits such as risk-taking, innovation and independence. The self-employed parent becomes a role model and a mentor to the nascent entrepreneur and is usually inclined to encourage entrepreneurial behavior. In other words the family provides the potential entrepreneur with the aspiration to follow the same career choice. The family role in developing these traits at a young age can be observed in simple acts such as encouraging children to set a lemonade stand in their front yard, in working during school holidays, to disassemble and reassemble their toys. These acts were found to develop traits such as independence, innovation, risk-taking and achievements. The school and education system play a pivotal role in predicting and developing entrepreneurial traits. Schools’ curricula should focus on encouraging autonomy and independence, innovation and creativity as well as risk-taking. The pedagogical approach should encourage children to make decisions and to accept mistakes as part of the learning process (Ibrahim and Ellis, 2002). Studies have shown that experiential type learning can play a critical role in developing entrepreneurial traits. Experience-based education was found to enhance entrepreneurial traits in pre and post adulthood. Further case studies allow nascent entrepreneurs to develop their risk-taking,

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innovation and autonomy traits (Clark et al., 1984). Government and non-government organizations can play a significant role in developing entrepreneurial traits. For example, government programs to provide financial support, contacts and training to nascent entrepreneurs could help enhance entrepreneurial activities. A recent non-government initiative known as the Shad Valley was established with support from banks; private sectors and the Canadian government select bright high school students from across Canada for a summer program. Students work on their business ideas under a mentor and develop a business plan. The objective is to enhance entrepreneurial traits in nascent entrepreneurs. Mentorship program has also been found to enhance entrepreneurial traits, in particular innovation. The mentor provides the guidance and support to the nascent entrepreneur. Mentors are often successful entrepreneurs in the community who volunteer their time.

Development of managerial skills Education and training play a pivotal role in developing the managerial skills necessary for a successful small business. Skill development courses were found to enhance the entrepreneur’s chance of success. However, for many years business education in Canada and elsewhere has followed the traditional paradigm that large organizations are responsible for job creation and economic growth in general. Thus skill development courses in various business functions such as accounting, finance, marketing and general management have focused to a great extent on large organizations. Recent research on job creation (Ibrahim, 1999) has changed this traditional view. Small businesses are gradually seen as the engine of economic growth and the creators of jobs. As a result more courses in entrepreneurship education are offered. However, specific courses in functional skills are still lacking. Furthermore, most business courses in Canada and most countries tend to focus on specific business functions such as accounting, marketing, finance and human

resources. The objective of this type of education is to create functionalists rather than decision makers. Entrepreneurial education requires emphasis on decision making skills, in other words the ability to utilize the various functional skills in making decisions. Typically the entrepreneur runs the small firm with limited numbers of employees due to resource constraints. Specialized functions do not exist or are often limited to one or two key functions. As a result the entrepreneur has to make decisions based on the overall picture of the business. Thus entrepreneurial education requires a shift to a decision-making paradigm. This type of business education integrates the functional knowledge and thus is more suited to entrepreneurs and small business training in general. Case studies of small business and entrepreneurs in action were found to develop and enhance decision-making skills of potential entrepreneurs (Clark et al., 1984). Mentorship and incubator programs were also found to enhance the entrepreneur’s decision making and managerial skills and competencies. Various government and non-government organizations could play a significant role in the training of budding entrepreneurs. Government agencies such as the Business Development Bank of Canada as well as Industry Canada Entrepreneurship and Small Business office could provide the needed support directly by offering training programs to entrepreneurs or indirectly through grants to small business programs in universities and colleges across Canada. The federal and provincial government could also support mentorship and incubator programs. Non-governmental organizations (NGOs) could play a significant role in the training and development of local entrepreneurs in communities across Canada. Youth employment centres could provide the mentorship needed to nascent entrepreneurs in collaboration with universities and colleges. The Canadian banking industry has a vested interest in developing a successful small business sector. Banks could provide support to incubator programs as well as scholarship funds to support entrepreneurial education and small business centres across Canada.

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Conclusion The Canadian small business sector plays a significant role in the economy. Despite its importance the failure rate is quite alarming. A major cause of this high failure rate is the entrepreneur’s lack of managerial skills and competencies. It has been argued that entrepreneurship training is a key strategy to reduce the high failure rate in the small business sector. Many Canadian government and non-government organizations have contributed to entrepreneurship training. However, these efforts are still limited. Further the lack of a coherent national strategy and a policy agenda regarding entrepreneurship training could threaten the global existence of the Canadian small business sector. We offered a model for entrepreneurship training and education.

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Said, K. and Hughey, K. (1977), ‘‘Managerial problems of small firm’’, Journal of Small Business Management, January-March. Schrere, J. (1982), ‘‘Tolerance of ambiguity as as discriminating variable between entrepreneurs and mangers’’, Academy of Management Proceedings. Upton, N., Sexton, D. and Moore, C. (1995), ‘‘Have we made a difference? an examination of career activity of entrepreneurship majors since 1981’’, Frontiers of Entrepreneurship Research. Vesper, K. (1993), Entrepreneurships Education, Los Angeles Center for Entrepreneurial Studies, University of California, Los Angeles, CA. Vesper, K. and Gartner, W. (1999), University Entrepreneurship Programs-1000, Lloyed Greif Center for Entrepreneurial Studies, University of Southern California, Los Angeles, CA. Wynant, L. and Hatch, J. (1990), Banks and Small Business Borrowers, The Western Business School, London, Ontario.

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Introduction

Developing managerial skills in Palestine Mohammed Al-Madhoun and Farhad Analoui

The authors Mohammed Al-Madhoun is a Lecturer and Farhad Analoui is a Reader, both at the University of Bradford, International Development, Bradford, UK. Keywords Training, Management, Development, Small- to medium-sized enterprises, Palestine Abstract This paper assesses the contribution of management training and development programmes (MTPs) to the development of managerial skills in small and medium enterprises (SMEs). Different sets of variables were used to explore the managers’ skills development by dividing the managerial skills into three main categories: self, people, and task-related skills. After the peace agreement, many training programmes were established in the Palestinian Territories in order to solve managerial weakness, and these almost always use off-the-job training. A combination of survey questionnaire and interviews were used to collect the primary data (field study). The target respondents for this first time study were the managers of SMEs who participated in the MT courses. The results of the study highlighted the presence of clusters of managerial skills for SME managers and supported the evidence in the literature suggesting that managerial skills should be analysed as a system of interrelated skills. Electronic access The research register for this journal is available at http://www.emeraldinsight.com/researchregisters The current issue and full text archive of this journal is available at http://www.emeraldinsight.com/0040-0912.htm

Education + Training Volume 44 . Number 8/9 . 2002 . pp. 431–442 # MCB UP Limited . ISSN 0040-0912 DOI 10.1108/00400910210449277

This paper is primarily concerned with the effectiveness of management training and development programmes (MTPs), especially those which are expected to benefit the managers of small and micro enterprises (SMEs) in Palestine. Many writers (Drucker, 1954; Katz, 1974; Laird, 1985; Peel, 1984; Mol and Vermeulen, 1988; Kubr and Prokopenko, 1989; Davis, 1990; Analoui, 1993, 1997; Liedholm and Mead, 1999; MacMahon and Murphy, 1999; Analoui and Hosseini, 2001) consider that for businesses to be successful managers with adequate managerial knowledge and skills are needed to support the enterprise. Various studies find that managerial problems are at the root of the most frequently voiced reasons for the failure of the SMEs in developing economies (Schmitz, 1995; McCormick and Pedersen, 1996; Van Dijk and Rabellotti, 1997; Burke and Collins, 2001). A significant component of the MTP was to educate the managers in role-related concepts as a means of self-appreciation of appropriate role behavior. A significant complementary development in recent years has been the attention to changing the management styles and administrative practices in the SMEs (Das, 2001). Since managers play a critical role in the success of the business, one way to develop managerial competencies and effectiveness as a result, is to provide the managers with opportunities to attend management training programmes (Pickett, 1998; Willcocks, 1998; Analoui, 2002). A number of analysts have argued that geographical concentrations of such programs, like those in Palestine, provide significant benefits to those who participate in the training courses (Schmitz, 1995; McCormick and Pedersen, 1996; Van Dijk and Rabellotti, 1997). The main objective of the paper is to explore the contribution of MTPs to the development of managers and their businesses in Palestine. Following the brief review of the literature and the introduction of the respondents the data generated will be analysed using ‘‘factor analysis’’ to identify the clusters of skills. Thus, the host of managerial skills offered in these programs will be measured by dividing them into three main categories namely: self-related, peoplerelated, and task-related. Attempts will be

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made to explore the contribution of each category, their interdependence and their combined contribution to the development of the SME managers. Finally, based on the results, several conclusions will be reached.

Managerial skills Katz (1974, p. 94) defined skill as an ‘‘ability which can be developed and which is manifested in performance, not merely in potential, the ability to translate knowledge into practice’’. Many studies (Livingston, 1971; Mintzberg, 1973; Katz, 1974; Whetten and Cameron, 1980; Albanese, 1989; Lewis and Kelly, 1989; Armstrong, 1994; Analoui and Hosseini, 2001; Burke and Collins, 2001) propose that all managers require management skills and that they are crucial for the managers’ success. In relation to this study, MacMahon and Murphy’s (1999) and Hankinson’s (1991) assertions would appear to be accurate in that the general response was one which indicated a lack of understanding of the whole concept of managerial effectiveness. Managerial skills and effectiveness are very hard disciplines to put any sort of efficiency on. ‘‘It is very hard because of the type of work managers do’’; ‘‘It’s very hard to appraise people anyway’’; ‘‘It’s all research and development’; ‘It’s hard to appraise them’’. On the down side, as in many larger companies, small firm owner-managers usually lack the necessary skills to carry out effective performance reviews, and in the short run may perceive such a system as taking up too much time (MacMahon and Murphy, 1999). In the long run, however, the benefits of efficient training needs identification, clarity for employees on what needs to be achieved and linking productivity to rewards in an objective fashion are points which this research exercise has identified as crucial to the survival and growth of the enterprise. Analoui (1993, 1995, 1997) incorporated three managerial categories, namely analytical and self-related, people-related and taskrelated skills, and asserts that they are necessary for the successful performance of managers. He proposes that there is a direct relationship between the level of the skills and the effectiveness of the managers.

Conceptual in nature, the analytical and self-related skills become most important as managers progress to higher positions (Analoui, 1997; Analoui et al., 2000). Managers, therefore, become increasingly reliant on their abilities to think strategically, and to develop an overview of the business (Karami and Analoui, 2001). This means resorting to strategic planning and commitment towards the realisation of the SME’s objectives. At this level, conceptual skills become the most important of all for successful performance (Katz, 1974; Analoui et al., 2000). These include personal (selfrelated) skills such as clear and creative thinking, continuous improvement, crisis management, objective setting, report writing, time management, presentation skills, information gathering and problem analysis, decision making and generally developing a natural management style. The main conclusion emanating from the Greenbank (2000) study is that decision making can generally be regarded as the most appropriate for micro-businesses. People-related skills or human (social) skills are argued to be essential for managing people at work. These relate to the interpersonal abilities that managers must possess to influence people and affect their actions. Human skills also involve the ability to lead, delegate and develop subordinates and staff, and are crucial to executives and senior managers. These include communication, motivation, team building and team management, negotiation, consulting, developing people, co-ordinating, leadership and SME skills, and conflict management. In their study Burke and Collins (2001) contend that to be an effective manager, one must be proficient in the skills investigated in this study: communicating, delegating, conflict management, time management, personal adaptability, analysis and decision making, and coaching and developing. The results indicate that the need on the part of managers for people-skills remains generally higher than that for task-related ones (Labbaf, 1996). The findings also correspond to the results of other studies on senior managers and their effectiveness in a number of developing countries (Analoui, 1990, 1995, 1997, 1999). It is contended that the senior managers’ effectiveness is a function of competencies shown in working with people, and that people-related skills such as

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leadership, communication, interpersonal and others, are perhaps the most vital attributes for their success in managing their work. According to Analoui (1993), task-related skills are those which enable managers to manage the task in hand effectively by determining objectives, forecasting, planning, and organising the tasks involved. These may include a range of managerial skills and knowledge, which are specific to the nature of the task performed by managers. The findings also correspond to the results of other studies on managerial effectiveness of business managers in Iran (Analoui and Hosseini, 2001). In general, the manager’s increased effectiveness is dependent more on taskrelated and analytical and self-related categories of skills than on people-related skills. Further analysis showed that 26.9 per cent of the respondents believed that selfrelated skills and analytical categories are essential for managers’ effectiveness. This result complements the earlier findings of the study where the combination of task and selfrelated aspects of business management training were viewed as the most important management needs for the increased effectiveness of managers. The comparative analysis of the results, however, indicates that people-related skills are perceived as slightly less important than the task and self-related areas. One interesting issue that has emerged from all this is that in reality the identified managerial skills are so overlapping that it is difficult to make a clear-cut distinction between the three categories. The line of demarcation can, therefore, only be drawn theoretically and only for the ease of analytical purposes (Analoui et al., 2000). As Katz (1974, p. 102) aptly states: ‘‘in practice these skills are so closely interrelated that it is difficult to determine where one ends and another begins’’. Furthermore, there is a clear indication that managers, irrespective of their seniority, require a comprehensive range of managerial skills for their increased effectiveness (Willcocks, 1998; Analoui, 1999). It is claimed that the required managerial skills form an integrated whole, thus implying that no single managerial skill can be ignored if the manager is to do his job effectively (Mintzberg, 1975). In a study of managerial skills (Boyatzis, 1982), the American Management Association and McBer consultants suggested a management

development model based on four clusters of skills. These clusters were identified empirically on the basis of the magnitude of correlation between skills. In their view, a set of managerial skills is regarded as a system in which each part is in relation to other parts, and managers’ skills should be examined in the context of the entire set.

The dynamic model for management training skills Analoui (1997) has introduced a threedimensional model for the training and development of senior managers. This descriptive approach is primarily concerned with what actually managers do and what their real training and development needs are. He further has incorporated this concept into an integrated model of management training and development, in which the three identified categories of managerial skills necessary for the successful performance of managers are: ‘‘analytical and self-related, people-related, and task-related skills’’ (Analoui, 1997, p. 77). As shown in Figure 1, it is suggested that the main reason for the changing needs of managers as they progress in their career from junior to senior and executive positions is the development of their managerial areas of concern. All managers at the beginning of their career show concern for specific aspects of managerial activities, and their need to cope with the demands and constraints in those areas reflects the development of three major areas of concern: their own analytical and self-related skills, people-related skills and knowledge. This includes dealing with subordinates, peers, bosses, clients, and those with whom they may interact during the course of daily activities, even outside the physical boundaries of the business; and the concern for task-related aspects which enable them to function as managers and meet the technical (operational) aspect of their job. It is demonstrated that, as managers move away from junior positions towards more senior and executive responsibilities, their concerns will also develop from task-related and purely operational activities to people and self-related behaviours. Each of these concerns, whether analytical and self, people

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Figure 1 Managers’ areas of concern

or task, will develop and consequently managers will become increasingly aware of their environment. It is proposed that managers’ awareness extends beyond the closed and their own individual environment of the work towards the wider environmental context (Analoui, 2002). Middle managers at this developmental stage of their managerial concerns are typically concerned with, and are aware of, the business activities, and as they take up even more senior management and executive positions, the more likely they are to develop further awareness of aspects of their own self, people and task, which are beyond the conventional boundaries of the business. These concerns may even extend to national and international activities related to the people and cognitive concerns of their work (see Figure 1). For Mol and Vermeulen (1988, p. 22), the message is that ‘‘two-thirds of the factors that are essential to the success of a management development programme depend on the management of the business, and more specifically, top management, rather than on the trainers’’. In this regard it has been postulated that top management commitment is probably the most critical requirement for the success of any development effort (House, 1967). In order for a development effort to succeed, top management must meet two fundamental requirements: active participation in the establishment of the development programme and acceptance of responsibility

for providing an environment conducive to development (House, 1967, p. 60).

Management training development in Palestinian territories In recent years management training development in the developed economies has become an increasingly important part of the business life. In the Arab countries, like other developing economies, management and development efforts have become an increasing concern but unfortunately they have often led to poor results and failed to contribute to the effectiveness of the managers involved (Mintzberg, 1975; Analoui, 1999). Most training specialists and managers in the Arab states describe training effectiveness in their countries as being generally ‘‘low’’ (Al-Ali and Taylor, 1997). Accordingly, the Palestinian Development Plan (PDP) (1998-2000) focused on effectively developing the Human Resources for three years. This ‘‘program was heavily financed (24.41 percent) from the general budget’’ (Shath, 1998, p. 11). The financial assistance aimed at supporting the Palestinian National Authority, and ‘‘to finance the building of the economy and society of both the West Bank and the Gaza Strip’’ (Ministry of Planning and International Cooperation, 1997, p. 7). As a result, many training programmes were established in the PT which, not surprisingly,

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were almost always of an off-the-job nature. Al-Madhoun and Analoui (2001) refer to most training programmes in the PT, after the peace agreement, as ‘‘trying to solve managerial weakness’’. These include: . Governmental programmes consisting of three types of training aimed at developing the public sector. These include training departments in ministries, the National Centre for Public Administration, and the technical and professional training organisations. . International training programmes. These include international training programmes for the private and public sector. . Non-governmental organisations (NGOs) training programme. These consist of training programmes for the private sector and those prepared for the Palestinian people (see Figure 2). The Centre for Palestine Research and Studies (CPR) has assessed the impact of the aid from donors (CPR, 1997). The results revealed the extent of the human resource development (HRD) needs at the Palestinian National Authority. Almost 75 per cent of the Palestinian managers stressed that aid agencies ought to give attention to the issues related to HRD. The remaining 25 per cent believed that the impact of aid on training and HRD has been positive. The differences between the needs for training and the weak results from the training indicate the problematic nature of the training programmes themselves. Shaban (1998) in discussing the training programme in Palestine aptly states that the problem is not about whether or not the

amount of aid allocated is sufficient for training programmes, rather it is about the most suitable methods of management training. He argues that existing training programmes do not specify the alternatives, target groups or specific training need. The training courses generally lack practical components and their impact is not systematically evaluated. In response to these constructive criticisms the Palestinian Economic Council for Development and Rebuilding organised a national training conference in which the best ways to achieve quality results from the training were discussed (Dajany, 1999).

Scope of the study Studies of the role of MTPs for SME managers development based on Palestinian census data are of limited value in answering some of the important questions regarding the role of MTPs and their relative level of managerial efficiency (Al-Madhoun, 1997; UNRWA, 1998; Safi, 1998). For this research, therefore, a cross-sectional data collection method collected was applied to generate primary data. A combination of survey questionnaires and interviews was utilised (Ackroyd and Hughes, 1992; Churchill, 1995). A five-page questionnaire, which consists of 113 questions, was designed and used in this study. Some of the questions were openended to allow for greater flexibility and descriptive choice of response. A decision was made to involve all SMEs’ managers, from five different areas, which attended the MT

Figure 2 Kinds of training programmes in PT

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courses between 1995 and 1999. To achieve this 449 were initially contacted and were invited to participate in this first time study of whom 127 replied and were eventually administered with questionnaires. It is important to note that although the self-administered method is known for being highly time consuming and expensive in so far as research resources are concerned, a decision was made to adopt this approach of collecting data to ensure the highest rate of response as well as allowing for clarification of possible ambiguities related to the questions asked (Churchill, 1995). Despite adopting the above strategy, primary analysis indicated that only 106 completed questionnaires could be qualified as valid responses. Nevertheless, the rate of return was around 70 percent (see Table I) equivalent to 23.6 percent of the whole population (106 out of 449 respondents).

Measurement of manager skills development Respondents were asked to indicate their views on a five-point Likert-type scale, ranging from: 1 = strongly disagree; to 5 = strongly agree; the totals of each of the five agreement scores were then multiplied by their respective importance ratings. The resulting five scale scores were averaged to construct a composite measure of firm performance. This composite measure reflects an aggregate view of performance based on the level of skill development satisfaction. Using multiple-item instruments requires a method that can be used in order to arrive at an overall measure for the instrument or the variable. Many researchers have used this method. Table I SMEs and valid completed questionnaires Area of SMEs Gaza North Middle Khanyones Rafah Total

Chosen businesses

Valid questionnairesa

Response (%)

53 25 23 27 24 152

41 17 16 19 13 106

77.0 68.0 69.5 70.0 54.0 70.0

Notes: a Valid questionnaire: establishment agreed to participate in the survey and answer more than 75 percent of the questions

This method of aggregating the multipleitems that measures a variable is explained by Judd et al. (1991). They demonstrate that when an individual indicates his or her own attitude (or opinion) relating to an object on some scales, a substantial element of intuitive judgement is involved, no matter how precise the rating instructions and no matter how well trained the individual. Such judgement in the use of rating scales makes the ratings vulnerable to bias. Averaging the scores for several variable items reduces this bias. Following the result of the factor analysis, the pattern of factor loading suggests that the three factors may be interpreted as information related to three major aspects of self development (Factor I), people development (Factor II), and task development (Factor III). Composite measures representing each factor were computed by summing the scores of the variables with loading on the factor. Regarding the reliability analysis the scale (Alpha) model resulted in the extraction of five common factors accounting for 92 percent of total variance. This indicates that the measurement has a standard level of reliability. Furthermore, a reliability analysis was conducted, and Cronbach’s alpha was calculated for each of the six factors to be sure about their reliability. Each factor reveals the reliability coefficient (Alpha) accounted for by the derived factors. Self-development skills This factor accounts for 41.1 percent of total variance. Three variables have high loadings on this factor. Analytical and self-related skills (clusters 1 and 2) seem to have clustered together. Initially, this variable was considered to be a self-related variable; however, it may be argued to have an analytical dimension. This factor was therefore regarded as being of an analytical and self-related nature. Analytical and self-related skills (Cluster 1) The objective of the questions posed was to identify the factors that were developed more in the opinion of MSE managers. The application of the alpha model resulted in the extraction of all accounting factors (alpha = 0.88). Nine indices were designed to measure the frequency of self-development skills. Selfdevelopment skills that load on this factor are:

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confidence, effective communication, draw correct conclusions, time management, cope with stress in my job, flexibility, transfer of training, negotiation and manage change. As shown in Figure 3, the majority of the participant managers (84.2 per cent) answered that displaying confidence is developed the most as a result of attending MT courses. A total of 84 percent answered that effective communication is the second skill developed more as a result of attending MT courses. On the other hand, 83.5 percent answered that finding how to be clear about ideas and arrive at the correct conclusions is the third skill that was developed further. Furthermore, 83 percent of respondents commented that time management is the fourth, and coping with stress in the job (82 percent) is seen as the fifth most developed skill as a result of attending MT courses. A total of 83.2 percent answered that flexibility is the sixth skill which was developed. Interestingly, 80 percent ranked transfer of the training into practice as seventh and negotiation as the eighth (78 percent). The lowest ranking skill developed as a result of attending MT courses (75.8 percent) was the ability to manage change effectively (see Figure 3). Analytical and self-related skills (Cluster 2) This factor is regarded as being of an analytical and self-related nature. The objective of the questions posed was to identify the skills that were developed more, in the opinion of the MSE managers. The

application of the alpha model resulted in the extraction of all accounting factors (alpha = 0.79). Four a priori indices were designed to measure the frequency of analytical and selfrelated skills. The four skills that load on this factor are presentation skills, managing meetings, writing reports and using computers in management. As shown in Figure 4, the majority of the participant managers (79.6 percent) answered that presentation is the most developed skill as a result of attending MT courses. Not surprisingly, managing meetings (75.7 percent) is the second, report writing third (71 percent) and using the computer in management (66.4 percent) as the fourth skill which respondents saw as being developed as a result of participating in the above training courses (see Figure 4). People-related skills This factor accounts for 22.9 percent of total variance. Two factors having high loadings on people-related skills (clusters 1 and 2) seem to have clustered together. Initially, this variable was considered to be a self-related variable. People-related skills (Cluster 1) Initially, this variable was considered to be a self-related variable; however, it may be argued to have an analytical dimension. This factor was regarded as being of a people-related nature. The objective of these questions is to identify the factors developed more, in the opinion of MSE managers. The application of the alpha model resulted in the extraction of all accounting factors (alpha = 0.80).

Figure 3 Analytical and self-related skills (cluster 2)

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Figure 4 Analytical and self-related skills (Cluster 2)

Three indices were designed to measure the frequency of people-related skills. The three a priori indices designed to measure the frequency of people-related skills that load on this factor are managing teamwork, creating organisational loyalty and conflict resolution. As shown in Figure 5, the majority of the participant managers (83.5 percent) answered that managing teamwork is the skill that was developed the most as a result of attending MT courses. They felt that creating organisational loyalty (81 percent) and conflict resolution skills (76.9 percent) were ranked as second and third respectively (Figure 5). People-related skills (Cluster 2) Initially, this variable was considered to be a people-related variable; however, it may be argued to have an analytical dimension. This factor was regarded as being of an analytical and people-related nature. The application of the alpha model resulted in the extraction of all accounting factors (alpha = 0.77).

Four indices were designed to measure the frequency of people-development skills. The four that load on this factor are managing people, use of new communication skills, developing people methods and use of other languages. As shown in Figure 6, the majority of the participant managers (80 percent) answered that managing people is the skill which saw the most development as a result of attending MT courses. The second and third skills are using the new communication methods (78.1 percent) and developing other people’s skills (74.8 percent) respectively. The lowest answer (77 percent) was that related to the use of other languages. This was seen as the skill that was least developed as a result of the MT courses (see Figure 6). Task-related skills This factor accounts for 36 percent of the total variance. Two factors having high loadings on task-related skills (Cluster 1 and 2), seem to have clustered together. However, the objective of these questions is to identify

Figure 5 People-related skills

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Figure 6 People-related skills (Cluster 1)

the factors (skills) most developed in the opinion of MSE managers. Task-development skills (Cluster 1) Initially, this variable was considered to be a task-related variable; however, it may be argued to have an analytical dimension. This factor was regarded as being of an analytical and task-related nature. The application of the alpha model resulted in the extraction of all accounting factors (alpha = 0.65). Three indices were designed to measure the frequency of task-development skills. The three that load on this factor are controlling, effective decision making and solving problems. As shown in Figure 7, the majority of the respondents (85 percent) claimed that controlling is the most developed skill as a result of attending MT courses. Effective decision making (84 percent) and problem solving (83.5 percent) were seen as the second and third skills developed (see Figure 7). Task-development skills (Cluster 2) The application of the alpha model resulted in the extraction of all accounting factors (alpha

= 0.74). Three indices were designed to measure the frequency of task-development skills. The three that load on this factor are planning, designing the business structure and preparing job description. As shown in Figure 8, the majority of the participant managers (80.2 percent) saw planning as the first skill developed. Designing the business structure (71 percent) was regarded as second and preparing job description was an important skill developed as a result of participating in MT courses (see Figure 8).

Comparison between skills developed and those to be developed The objective of this question was to identify the most important factor from the managerial skills, which was developed the most and the skills that needed to be developed. It should be noted that the research has considered three different categories (analytical and self-related, people-related, and task-related skills).

Figure 7 Task-related skills (Cluster 1)

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Figure 8 Task-related skills (Cluster 2)

As shown in Figure 9, respondents were asked to indicate development of the three factors on a three-point scale, 1=first, 2=second, 3= third. The number of the respondents for each of the three points was then multiplied by their respective importance rating. The resulting three totals were averaged to construct a composite measure of factor development. This composite measure reflects an aggregate view of each factor based on the level of development elements. Three answers were designed to measure the frequency loadings on each factor. The total number of respondents was 103 from 106. As shown in Figure 9, the majority of the participant managers (85 percent) answered self-related skills as the first, task-related (68.6 percent) skills second and the peoplerelated (43 percent) skills as the third factor developed as a result of participation in these courses. Then, the respondents were asked to specify the skills they wish to develop further. Three answers were designed to measure frequency loadings on each factor. The total number of respondents was 104 from 106. As

shown in Figure 9, the majority of the participant managers (69 percent) answered that self-related skills is the first factor they wish to develop, 63.6 percent answered that people-related skills is the second, and 60 percent answered that task-related skills is the third factor they wish to develop further. The results of the above analysis support the proposition that though managerial skills are interrelated, they form various clusters that may be more distinct than the broad categories referred to in the literature. While the analytical and self-related skills are by far more strongly interrelated, and should be regarded as an integrated set of skills, the same does not necessarily apply, at least not to the same extent, to the other two categories of skills. With respect to data collected from SMEs in Palestinian Territories, task-related skills seem to form, though rather weakly linked, two distinct patterns. Similarly, the people-related skills do not form an integrated single group of skills; rather they seem to form distinct clusters of subsets of such skills. The reader should be reminded that while these results are suggestive in various ways, they are

Figure 9 Comparison between skillls developed and skills to be developed

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nevertheless relevant to the SME managers in PT, and may, however, provide some insight into a rather complex issue of managerial training and development.

Conclusion The main objective of the paper evolved around the contribution of MTPs to the development of the SME managers. To determine and to assess the impact of managerial skills on these managers, dividing the managerial skills into three main categories used different sets of variables: selfrelated, people-related and task-related skills. There is a significant contribution of the MTPs to the SME managers’ development. The results clearly support the view that the degree of importance attached to each set of skills tended to vary according to the managers in the different places, and the fields in which they conducted their business. Generalisation about the need for acquisition of specific managerial activities is likely to be at least partially incorrect for any particular manager or group of managers. Managers in different sectors, various cultural backgrounds, and different places are likely to have different perceptions of the importance of such skills and their interaction for their increased effectiveness and development as a whole. For the development of managers, the implications of these findings are many. The five agreement scores were then multiplied by their respective importance ratings. Analytical and self-related skills (alpha = 0.88). Nine indices were designed to measure frequency of self-development skills (Cluster 1), while four indices were designed to measure frequency of analytical and selfrelated skills (Cluster 2) (alpha = 0.79). Three indices were designed to measure frequency of people-related skills (Cluster 1) (alpha = 0.80). For people-related skills (Cluster 2) (alpha = 0.76), four indices were designed for measurement. Three indices were designed to measure frequency of taskdevelopment skills (Cluster 2) (alpha = 0.65), and four indices were designed to measure frequency of task-related skills (Cluster 2) (alpha = 0.74). On the whole, the emerging pattern of variables and the forming of categories of skills show that managers perceive

effectiveness to be a function of self-related (85 percent) and task-related (68.6 percent) categories of managerial skills, rather than people-related skills (43 percent). Compared with skills they wish to develop, the majority of the participant managers (69 percent) answered that the self-related category of skills is the first factor they wish to develop further, 63.6 percent answered that the people-related category of skills is the second, and 60 percent answered that task-related skills is the third category. It can be claimed that people-related skills constitute the most important category for the increased effectiveness of managers, irrespective of their position in the hierarchy.

References Ackroyd, S. and Hughes, J. (1992), Data Collection in Context, 2nd ed., Longman, Harlow. Al-Ali, A. and Taylor, R. (1997), ‘‘Factors affecting management training development in Kuwaiti organisations’’, paper presented at the Arab Management Conference, 29-31 July, University of Bradford, Management Centre, Bradford. Albanese, R. (1989), ‘‘Competency-based management education’’, Journal of Management Development, Special issue, Vol. 8 No. 2, pp. 66-76. Al-Madhoun, M. (1997), ‘‘The role of needs analyses for the training programmes success in the GS’’, paper presented at the Second Workshop for the Training in Palestine. UNRWA, SMET Programme Office, GS. Al-Madhoun, M. and Analoui, F. (2001), ‘‘An assessment of the management training programme on small business development’’, paper presented at the 31st European Small Business Seminar, Dublin, 12-15 September. Analoui , F (1990), ‘‘Managerial skills for senior managers’’, International Journal of Public Sector Management, Vol. 3 No. 2. Analoui, F. (1993), Training and Transfer of Learning, Avebury, Aldershot. Analoui , F. (1995), ‘‘Workplace sabotage: its styles, motives and management’’, The Journal of Management Development, Vol. 14 No. 7, pp. 48-65. Analoui, F. (1997), Senior Managers and their Effectiveness, Avebury, Aldershot. Analoui, F. (1999), ‘‘Eight parameters of managerial effectiveness: a study of senior managers in Ghana’’, The Journal of Management Development, Vol. 18 No. 4. pp. 362-89. Analoui, F. (Ed.) (2002), Changing Patterns of Human Resource Management, Ashgate, Aldershot. Analoui. F, and Hosseini, M, (2001), ‘‘Management education and increased managerial effectiveness: the case of business managers in Iran’’, Journal of Management Development, Vol. 20 No. 9, pp. 785-94.

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Developing managerial skills in Palestine

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Analoui. F., Labbaf. H. and Noorbakhash. F. (2000), ‘‘Identification of clusters of managerial skills for increased effectiveness: the case of the steel industry in Iran’’, International Journal of Training and Development, Vol. 4 No. 3, pp. 217- 34. Armstrong, M. (1994), How to be Better Manager, Kogan Page, London. Boyatzis, R.E. (1982), The Competent Manager, John WIley & Sons, New York, NY. Burke. S. and Collins. K. (2001), ‘‘Gender differences in leadership styles and management skills’’, Journal of Women in Management Review, Vol. 16 No. 5, pp. 244-56. Centre of Palestine Research and Studies (1997), Prevailing Perceptions on Aid Management, Research Reports Series, No. 9, Nables, Palestine. Churchill, S. (1995), ‘‘Projecting a career: industry and education working together in Bexley’’ Journal of Education and Training, Vol. 37 No. 5, pp. 28-31. Dajany, M. (1999), ‘Preparing for the Training National Conference’’, Journal Al-ayyam, April, Economic Page, Palestine. Das, T.K. (2001), ‘‘Training for changing managerial role behaviour: experience in a developing country’’, Journal of Management and Development, Vol. 20 No. 7, pp. 579-603. Davis, T.R. (1990), ‘‘Whose job is management development? – comparing the choices’’, Journal of Management Development, Vol. 9 No. 1, pp. 58-70. Drucker, P.F. (1954), The Practice of Management, Harper & Row, New York, NY. Greenbank. P, (2000), ‘‘Training micro-business ownermanagers: a challenge to current approaches’’, Journal of European Industrial Training, Vol. 24 No. 7, pp. 403-11. Hankinson, A. (1991), Small Business Management and Performance: Survival for Engineering Firms, Avebury, London. House, R. (1967), Management Development: Design Evaluation and Implementation, Ann Arbor, Bureau of Industrial Relations, University of Michigan. Ann Arbor, MI. Judd, C.M., Smith, E.L. and Kidder, L.H. (1991), Research Methods in Social Relations, International Edition, 6th ed., Holt Rinehart and Winston, San Diego, CA. Karami, A. and Analoui, F. (2001), ‘‘Strategy, mission statement and firm performance in small and medium sized enterprises’’, paper presented at the Small Business and Enterprises Development Conference, University of Leicester, Leicester, 29-30 March. Katz, R.L. (1974), ‘‘Skills of an effective administrator’’, Harvard Business Review, Vol. 52, September/ October, pp. 90-102. Kubr, M. and Prokopenko, J. (1989), Diagnosing Management Training and Development Needs: International Labour Organisation, Geneva. Labbaf, H. (1996), ‘‘Managerial effectiveness and required skills: a study of the senior managers in Iran‘s steel industry’’, thesis submitted for the Degree of Doctor of Philosophy, University of Bradford, Bradford.

Laird, D. (1985), Approaches to Training and Development, 2nd ed., Addison-Wesley, Reading, MA. Lewis, M. and Kelly, G. (1989), 20 Activities for Developing Managerial Effectiveness, Gower Publishing, Aldershot. Liedholm, C. and Mead, D. (1999), Small Enterprise and Economic Development, The Dynamics of Micro and Small Enterprise, Routledge, London and New York, NY. Livingston, J.S. (1971), ‘‘Myth of the well-educated manager’’, Harvard Business Review, January/ February, pp. 79-93. MacMahon, J. and Murphy, E. (1999), ‘‘Managerial effectiveness in small enterprises: implication for HRD’’, Journal of European Industrial Training, Vol. 23 No. 1. McCormick, D. and Pedersen, P.O. (1996), Small Enterprises: Flexibility and Networking in African Context, Londhorn, Nairobi. Ministry of Planning and International Co-operation (1997), The Palestinian Development Plan (19982000), The Palestinian National Authority, Gaza. Mintzberg, H. (1973), The Nature of Managerial Work, Harper and Row, New York, NY. Mintzberg, H. (1975), ‘‘The managers job: folklore and fact’’, Harvard Business Review, July-August, pp. 49-61. Mol, A.J. and Vermeulen, L.P. (1988), ‘‘Is management development worth the effort?’’, Human Resource Management, August, pp. 18-29. Peel, M. (1984), Management Development and Training, British Institute of Management, London. Pickett, L. (1998), ‘‘Competencies and managerial effectiveness: putting competencies to work’’, Public Personnel Management, Vol. 27 No. 1, Spring, pp. 103-15. Safi, M. (1998), ‘‘Developing entrepreneurs GS utilising multidisciplinary approaches to strengthen training for Business Start-Up in the GS Strip’’, Durham University, Durham. Schmitz, H. (1995), ‘‘Collective efficiency: growth path for small scale industry’’, Journal of Development Studies, Vol. 31 No. 4, pp. 529-66. Shaban, O. (1998), ‘‘The non-success reasons for the training programmes in Palestine’’, Journal of Al-yyam, Vol. 4 No. 1, pp. 14-18. Shath, A. (1998), ‘‘Meeting with Dr Ali Shath’’, Journal of Alrsala, Alkhalas Party, Gaza. UNRWA. (1998), ‘‘Information about the local and international lending and training programmes in the GS’’, SMET Programme, Gaza. Van Dijk, M.P. and Rabellotti, R. (1997), Enterprise Clusters and Networks in Developing Countries, EADI Book Series 2, Frank Cass, London. Whetten, D.A. and Cameron, K.S. (1980), ‘‘An assessment of salient management skills’’, working paper, School of Business, University of Wisconsin, Madison, WI. Willcocks, S.G. (1998), ‘‘Managerial effectiveness in an NHS Hospital Trust’’, International Journal of Public Sector Management, Vol. 11 Nos 2/3, pp. 130-8.

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Introduction

The determinants of training in SMEs in Northern Ireland Renee S. Reid and Richard I.D. Harris

The authors Renee S. Reid is a Consultant at the Management Institute, Faculty of Business and Management, Newtownabbey, Northern Ireland, UK. Richard I.D. Harris is Professor of Economics, in the Department of Economics and Finance, University of Durham, Durham, UK. Keywords Family firms, Training, Human resource management, Small- to medium-sized enterprises, Northern Ireland Abstract This study looks at SME spending on training in Northern Ireland. We include a range of human resource management functions, as well as workforce characteristics, the external environment, size, and the impact of changes in ownership status as important determinants of training expenditure in SMEs. Particular attention is also paid to the importance of whether the enterprise is family owned and/or managed. Generally, our results show that HR functions do generally matter; however, workforce characteristics (other than shift working), ownership characteristics and external factors, and even to some extent size, were much less important than expected. What our results do show is that whether the firm is family-owned/managed is a major factor in determining training budgets in SMEs in Northern Ireland. Electronic access The research register for this journal is available at http://www.emeraldinsight.com/researchregisters The current issue and full text archive of this journal is available at http://www.emeraldinsight.com/0040-0912.htm Education + Training Volume 44 . Number 8/9 . 2002 . pp. 443–450 # MCB UP Limited . ISSN 0040-0912 DOI 10.1108/00400910210449286

While there has been widespread consideration of the role of small- to mediumsized enterprises (SMEs) in terms of their innovative and job creation capabilities, there has been much less attention paid to the acquisition of human capital. In general issues associated with HRM, and in particular training, have been largely assumed to be the domain of larger companies that have the resources to pay for such factors. HRM practices and associated organisational practices such as TQM and the introduction of new technology, are often studied using case studies of larger (often multinational) enterprises or using datasets that are significantly biased towards larger firms. Thus much less is known about which factors affect SME spending on training, and still less on the link between such training and subsequent organisational performance. We limit ourselves here to an initial consideration of what determines how much SMEs in Northern Ireland spend on training, with the principal aim being to see if such factors that typically are included when looking at larger firms spending carry over to smaller enterprises. We therefore look at the strength of the link between a range of HRM functions and training, as well as whether workforce characteristics, the external environment, size, and the impact of changes in ownership status are important determinants of training expenditure in SMEs. An important sub-theme is our expectation that one particular ownership characteristic (whether the enterprise is family owned and/or managed) will be important, given previous research that has shown that family-operated firms often have different HRM practices and indeed different commitments to training (e.g. Reid and Adams, 2001; Reid et al., 2001). The approach taken is based on estimating a multivariate regression model, given the linkages among many of the explanatory variables used to determine training expenditure. That is, we are interested in being able to measure the impact of (say) size on training having controlled for a range of other factors, which might otherwise be correlated with size. This should help to provide us with a richer set of insights into the factors that at the margin are most responsible for training with SMEs.

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Modelling the determinants of work-related training Most of the literature on training is at the individual, micro-level whereby the usual approach is to determine who receives training (and how much) by linking to the costs of such training against the potential returns. In contrast, we consider training at the level of the firm, but most of the factors that relate to who receives training will also determine how much is spent by the firm. Training is presumed to enhance an employee’s productivity and reduce their probability of quitting (as increased wages and other benefits accrue from increased productivity)[1]. But since training is costly, employees are screened to ensure that it is concentrated on those from whom there will be the maximum overall increase in productivity for a sufficiently long period of time. This screening is linked to various factors that at the firm level we usually cannot observe, for example personal characteristics such as age (since the period over which the investment can be amortised is shorter for older workers); formal qualifications (which proxy cognitive skills and ability, suggesting that training those with certain levels of qualifications will yield higher returns at lower cost since general education and training are likely to be complementary activities); skills currently possessed (often proxied by socioeconomic status); gender and ethnic origin (given the real or imagined link between these factors and productivity); family circumstances (marital status and the presence of children of different age groups might be linked to the perceived commitment of individuals – in particular, women – to the organisation); and tenure with the present company (ceteris paribus, the longer the length of employment with the organisation, the greater the stock of firm-specific human capital, and the lower the risk of turnover). Other characteristics are likely to be important, such as whether the individual is a member of a trade union. Union members are less likely to quit as membership of a trade union usually brings benefits that are realised through longer job tenure (Elias, 1994). Unions are also more likely to press for higher levels of training for their members, because of the (pecuniary) benefits that such training brings (see Booth and Chatterji, 1997).

At the firm level, we have aggregate characteristics that relate to the composition of the workforce (e.g. percentage casual/ temporary; fixed term; home based; shift workers; or on an annual hours contract), rather than individual level characteristics. But we know that aggregate and individual factors are related[2] and that a more skilled, educated, qualified, and longer tenured workforce are more likely to be ‘‘core’’ workers rather than peripheral, and therefore we expect composition effects like a large proportion of casual/temporary and fixedterm employment to be negatively related to firm-level spending on training (whereas shift workers and home-based workers are often more skilled and occupy more flexible jobs). Moreover, personal characteristics are also linked to the characteristics of the job itself. For instance, full-time workers are more likely to receive training than part-time workers, reflecting both the period over which the investment is realised and the type of job that is involved. Similarly, individuals with permanent as opposed to temporary contracts are likely to be seen as a lower risk with respect to training. Other factors which may be relevant proxies of the type of employment involved in a firm include whether the job involves flexible working hours (perhaps mirroring a more flexible and higher skilled job), and whether the employee works from home some or all of the time (again linked to flexibility and skills). The extent to which a firm operates with a range of (sophisticated) HRM functions might also be expected to relate to how much training takes place. Whereas it has been argued that large organisations tend to use HRM to introduce informality and flexibility into the workplace, smaller firms use it to introduce more formalised policies and procedures into their more informal cultures (Bacon et al., 1996). Taking this a stage further, and assuming that there is a link between HRM functions (including training) and firm performance, Pfeffer (1998) suggests that the impact on performance is more pronounced when complementary groups (or ‘‘bundles’’) of HR practices are used together. Indeed, this may be more appealing for smaller firms who possess less ability to utilise scale economies in HRM, and thus use this as a means to formalise rather than introduce informality and flexibility. Thus, we might expect that smaller firms that adopt more HR

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practices (e.g. the existence of a HR department, specific formal HR policies, and appraisal systems) are also more likely to spend more on training. The ownership characteristics of the firm are also likely to be relevant. Whether the firm is family owned or managed is likely to be important, given previous studies that find that family-owned businesses are likely to have different HR practices (Reid et al., 1999, 2001; Reid and Adams, 2001). Also firms that experience organisational changes (such as take-overs or mergers, or relocation) may have different commitments to training, either because they are attempting to grow and become more profitable (thus acquisition of another firm and/or merger is likely to be positively related to training) or because the opposite is the case and thus being taken over is likely to be negatively related to training expenditures. External factors are important in determining how much is spent on training at the firm level. Others have cited the importance of factors such as whether the organisation is part of the private sector, since public sector firms are more likely to engage in training when the risk of poaching by rivals is much lower and where fluctuations in demand are lower. With reference to demand pressures, the industrial classification of the establishment is also likely to be an important indicator of overall training provision. Firms operating in growing (as opposed to declining) markets presumably will be engaged in investing in human capital through training, as will firms facing increases in demand for their own products and services. Lastly, firm size is likely to be important. Even within the small firm sector, larger establishments tend to have greater costs of monitoring employees, inducing them to provide more training to improve productivity and to lower turnover (Oi, 1983)[3]. In addition, larger firms tend to operate in more stable markets, often with longer time horizons, and with stronger internal employment markets, which means lower risks associated with returns from training. Consequently, it is likely that ‘‘ . . . less educated and potentially stable workers will have greater training opportunities in large firms relative to small firms’’ (Holtmann and Idson, 1991, p. 340). The portfolio model developed by Holtmann and Idson (1991, p. 347), formally shows that there is a

‘‘ . . . greater relative willingness on the part of larger employers to assume a greater degree of risk when allocating their resources for on-thejob training’’. This means we need to control for employer size effects, when modelling the determinants of training, and where possible both in terms of the size of the workforce and the value of the firm’s turnover. Almost all of the factors listed above are included in the data we use to consider what determines training in SMEs in Northern Ireland. Thus, we now turn to a consideration of the survey information upon which our study is based.

Data and initial findings We use the information collected in a survey of SMEs in Northern Ireland carried out in 2000 by the HRM Research Group within the Faculty of Business and Management at the University of Ulster. The survey was designed to complement and extend the CRANET survey on International Strategic Human Resource Management, which was sent to larger companies at the same time as the present data were collected. The sample frame used was based on the population of all companies operating in Northern Ireland employing between 20 and 100 employees. The survey comprised 47 fixed and multiple-choice answers divided into six sections examining CEO characteristics, company characteristics, HRM policy, staffing practices, employee development and family employment practices. Some 212 usable replies were received which we believe are a representative sample of SMEs operating in Northern Ireland employing between 20-100 employees. More details and the results of previous work can be found in Reid and Adams (2001). Table I provides information on the extent to which SMEs were engaged in training; nearly two-thirds of small firms spent nothing or very little while only around 10 per cent spent more than 5 per cent (of their annual labour cost bill) on formally training employees. In Table II, we have sub-divided the variables in the dataset (that we expect to be related to training activities) on the basis of those firms that spend 0-2 percent on training vis-a`-vis those that spent 2 per cent or more. The average value for each variable is

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Table I SME spending on training in Northern Ireland, 2000 Percentage of annual labour cost bill spent on training

Frequency

Percentage

133 27 18 13 21 212

62.7 12.7 8.5 6.1 9.9 100.0

0-2 2-3 3-4 4-5 >5 Total

Cumulative percentage 62.7 75.5 84.0 90.1 100.0

Table II Description of variables sub-divided by whether organisation spends anything on training: SMEs in Northern Ireland in 2000

HRM functions Is there a personnel/HRM deptartment/manager?b Percentage of workforce employed in personnel/HRM Organisation has training and development policy Organisation has personnel/HRM management plan Training is the major issue for HRM in next five years Have a management appraisal system Have a clerical appraisal system Have a manual staff appraisal system Appraisal system used to determine individual training needs Systematically analyse employee training needs Negotiate with TUs

Workforce characteristics Percentage of workforce temporary/casualc Percentage of workforce fixed termc Percentage of workforce homebasedc Percentage of workforce shiftworkersc Percentage of workforce on annual hours contractc

Ownership characteristics Organisation is family owned/managed Acquired another organisation in last three years

t-test of difference

Organisation spends on traininga

Mean

SD

No Yes No Yes No Yes No Yes No Yes No Yes No Yes No Yes No Yes No Yes No Yes

0.42 0.56 2.35 2.16 0.70 0.94 0.15 0.56 0.32 0.43 0.38 0.80 0.32 0.75 0.38 0.65 0.49 0.84 0.47 0.87 0.19 0.15

0.50 0.50 2.12 1.91 0.46 0.25 0.36 0.50 0.47 0.50 0.49 0.40 0.47 0.44 0.49 0.48 0.50 0.37 0.50 0.33 0.39 0.36

No Yes No Yes No Yes No Yes No Yes

0.64 0.82 1.01 0.76 0.02 0.06 0.57 0.90 0.64 0.71

0.88 0.94 1.36 1.20 0.15 0.29 1.13 1.29 1.21 1.26

–1.43

No Yes No Yes

0.65 0.49 0.12 0.20

0.48 0.50 0.33 0.40

2.32

–1.92 0.65 –4.27 –6.87 –1.69 –6.35 –6.51 –3.80 –5.32 –6.42 0.67

1.34 –1.32 –1.95 –0.41

–1.52

(continued)

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Table II

Taken over in last three years Merged in last three years Relocated in last three years Size No. of male FTE workers employed No. of female FTE workers employed Under £100k turnover £100-999k turnover £1-5m turnover

External factors Market is growing Market is declining Increased competition in last three years Decreased competition in last three years Increased demand for output in last three years Decreased demand for product in last three years Agricultural sector Chemicals Engineering Other manufacturing Service sector Public sector

Organisation spends on traininga

Mean

SD

No Yes No Yes No Yes

0.10 0.06 0.03 0.05 0.14 0.14

0.30 0.25 0.17 0.22 0.35 0.35

No Yes No Yes No Yes No Yes No Yes

28.00 25.00 18.00 21.00 0.01 0.00 0.17 0.20 0.63 0.59

16.00 15.00 16.00 12.00 0.09 0.00 0.38 0.40 0.48 0.49

No Yes No Yes No Yes No Yes No Yes No Yes No Yes No Yes No Yes No Yes No Yes No Yes

0.41 0.54 0.14 0.09 0.80 0.78 0.02 0.00 0.49 0.61 0.17 0.06 0.04 0.05 0.02 0.03 0.08 0.10 0.29 0.22 0.50 0.48 0.07 0.11

0.49 0.50 0.35 0.29 0.40 0.41 0.15 0.00 0.50 0.49 0.38 0.25 0.19 0.22 0.15 0.16 0.28 0.30 0.45 0.41 0.50 0.50 0.25 0.32

t-test of difference 0.93 –0.71 0.01

1.21 –1.42 0.77 –0.54 0.53

–1.96 1.16 0.21 1.34 –1.68 2.30 –0.45 –0.13 –0.46 1.13 0.21 –1.17

Notes: a No = 0-1 percent; Yes = 1+ percent of annual labour cost bill spent on training; b Mean values are proportions where characteristic is true unless otherwise stated; c Based on 0 = none; 1 = 1-10 percent; 2 = 11-20 percent; 3 = >20 percent

reported (for each sub-group), as well as the standard deviation and a t-test[4] of whether there was any significant difference between the mean values for the two sub-groups. Thus, Table II gives an initial indication of whether there was a difference (e.g. in HRM

functions) between those that spent very little and those that spent more on training in SMEs in Northern Ireland. With respect to HRM functions, statistically significant differences between firms that spent little and those spending

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larger amounts have the expected outcomes: firms spending more were more likely to have a personnel/HRM department/manager (56 against 42 per cent); operate a training and development policy; have a personnel/HRM management plan; put training as the major HRM issues in next five years; operate a management, clerical and manual staff appraisal system; use appraisal to determine training needs; and systematically analyse employee training needs. The only workforce characteristic that was significantly different between the two subgroups of firms (when considering how much was spent on training) related to the percentage of the workforce operating in shifts. As expected, those firms with more shift workers spent more on training. With respect to ownership characteristics, we were able to confirm the earlier results presented in Reid and Adams (2001) that family owned/managed firms were less likely to commit to larger training budgets, while firms that had acquired another organisation within the last three years were more likely to spend more on training (although the difference in mean values across the two subgroups considered is statistically significant at only the 10 per cent level on a one-sided t-test). Surprisingly, size appeared not to matter in terms of what firms spent on training; we could find no statistically significant differences in size characteristics across the two sub-groups considered. More encouragingly, we did find that firms operating in growing markets and/or experiencing increases in the demand for their products or services, did spend more on training. There was little difference across broad industrial sectors, and while public sector firms were more likely to spend proportionately more on training the effect was statistically insignificant.

Regression model of the determinants of SME training Many of the variables included in Table II will be highly correlated with each other; moreover, it is only after we control for certain attributes (e.g. size) that we might expect to find a relationship between a particular characteristic and spending on training. We are also particularly interested in

analysing our data on the basis of whether the firm is family owned or not, since we wish to investigate how important such a difference is in determining training. Thus, to encompass all the multivariate complexities in the data we have estimated a regression model with the amount spent on training as the dependent variable[5]. The independent variables included initially all those listed in Table II, together with a second set of variables comprising all those listed in Table II multiplied by a dummy variable that took on the value of 1 if the firm was family owned/managed. That is, we include a set of composite dummies that effectively allow the impact of the variables listed in Table II to be different for family owned businesses. We estimated the full model and then used stepwise regression to reduce the model down to its parsimonious form. Thus, any nonsignificant variables were removed from the model and a test of the null hypothesis that all insignificant variables have parameter estimates jointly equal to zero (statistically) was accepted at the final stage of our analysis. Thus, our final model encompasses the data without the need to include a set of variables that are effectively rejected by the model. The results obtained are reported in Table III. We shall concentrate our discussion on the final column that reports the elasticity of training expenditures with respect to each variable included in the model. With respect to HRM functions, SMEs in Northern Ireland that have a personnel/HRM management plan, a management appraisal system, or systematically analyse employee training needs spend between 26-36 per cent more on training. Thus, training and other HRM functions do seem to be ‘‘bundled together’’ as suggested by Pfeffer. As to workforce characteristics, doubling the percentage of the workforce that is temporary/casual in family-owned businesses would have resulted in a 12.9 per cent increase in spending on training. This effect was not felt in non-family run firms. Doubling the percentage of shift workers in SMEs would have increased training expenditures by some 21.4 per cent, although in familyowned businesses the increase would have been only 5.3 per cent (i.e. 21.4 minus 16.1). Thus, in terms of the impact of workforce characteristics on training, family run businesses did not have the same (or indeed

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Table III Regression model of determinants of spending on training: SMEs in Northern Ireland in 2000

Constant Organisation has personnel/HRM management plan Have a management appraisal system Systematically analyse employee training needs Percentage of workforce temporary/casual
family-owned Percentage of workforce shiftworkers Percentage of workforce shiftworkers
family-owned Organisation is family owned/managed Taken-over in last three years No. of male FTE £100-999k turnover £1-5m turnover
Family-owned Market is growing
Family-owned Other manufacturing
Family-owned Service sector
Family-owned Notes:

a



Std Error

t-value

Elasticitya (%)

0.80 0.76 0.58 0.51 0.30 0.27 –0.38 0.72 –0.72 –0.02 –0.73 –0.50 0.60 –1.04 –0.81

0.26 0.18 0.18 0.17 0.12 0.10 0.13 0.35 0.28 0.01 0.26 0.24 0.21 0.30 0.29

3.13 4.30 3.25 2.94 2.61 2.79 –2.86 2.04 –2.56 –4.37 –2.85 –2.04 2.93 –3.47 –2.78

26.2 31.7 35.8 2.9 21.4 –16.1 48.7 –7.1 –75.1 –15.3 –21.8 18.4 –24.0 –26.1

100
ð@y=@xÞðx=yÞ ¼ 100
ðx=yÞ; mean of dependent variable (y) is 0.88.

the expected) impact as did non-family run firms, although the results in Table III suggest that (ceteris paribus[6]) family-owned/ managed businesses spent nearly 49 per cent more on training than did other firms. This result is in direct contrast with what was obtained using the univariate t-test reported in Table II, although it is important to note that the full impact of family-owned/managed businesses on training need to take account of all the impacts involving this variable (not just the ceteris paribus result just discussed[7]). Firms taken-over in the previous three year period spent 7.1 per cent less on training, while doubling the number of full-time equivalent male workers would have reduced training expenditures by some 75 per cent. However, the impact of size in terms of turnover shows that for all firms only those producing some £100-999 thousand in output (as opposed to those producing less and those producing £1-5 million or £5+ million – the other categories covered in the survey) spent less on training; in general the relationship between turnover and training was U-shaped. Interestingly, large family-owned businesses (with £1-5 million turnover) spent some 22 per cent less on training (vis-a`-vis large non-family owned firms), although those operating in growing markets spent some 18 per cent more (vis-a`-vis family and non-family owned firms operating in declining or stagnant markets). Lastly, family-owned/managed firms in ‘‘other manufacturing’’ and the service sector spent some 25-26 per cent less on training. Thus, in general, while the characteristic

‘‘family-owned/managed’’ resulted in overall larger amounts spent on training, there were some sub-sets of family-owned firms (those with more shift workers, larger, and in certain industrial sectors) where the extra spending was more muted.

Summary and conclusions This study provides an initial consideration of what determines how much SMEs in Northern Ireland spend on training. We considered the importance of a range of HRM functions, as well as whether workforce characteristics, the external environment, size, and the impact of changes in ownership status as important determinants of training expenditure in SMEs. In particular, special attention was paid to the importance of the characteristic of whether the enterprise is family owned and/or managed. Generally, our results show that HR functions do generally matter in SMEs with regard to how much is spent on training; however, workforce characteristics (other than shift working), ownership characteristics and external factors, and even to some extent size, were much less important than expected. What our results do show is that whether the firm is family-owned/managed is a major factor in determining training budgets in SMEs in Northern Ireland. This is an area that consequently warrants more research, both through case study and further survey-based analyses.

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7 Specifically, we shall see that larger family-owned firms are much less likely to spend significantly more on training.

Notes 1 It is important to note at the outset that training can be firm-specific or more generic, and this difference is important. However, we have no data on the type of training provided and therefore we shall generally ignore this distinction, while recognising it is potentially relevant. 2 It is interesting to note that Jacobs et al. (1996) attempted to rank the relative importance of organisational factors vis-a`-vis individual and job characteristics in US companies. They concluded their study by noting ‘‘ . . . the relatively powerful importance of establishment and job factors in structuring opportunities to receive worksite training and the relatively modest importance of individual factors . . . ’’ (Jacobs et al., 1996, p. 174). 3 Indeed, larger firms faced with higher monitoring costs will generally pay higher wages to lower turnover, and higher wages also reflect higher human capital (which is of course positively related to training). 4 Note, a negative t-value indicates that those firms that spent more on training had a larger mean value for the variable in question. Also, we recognise that a t-test is not necessarily the preferred test statistic when a variable is dichotomous (e.g. whether there was a personnel/HRM dept/manager), rather than continuous (e.g. percentage of the workforce employed in personnel/HRM activities). We have experimented with other test statistics (e.g. nonparametric statistics) and generally find similar results. 5 As Table I shows, we only have information on this variable broken down into five categories. Thus we recognise that given this form of the dependent variable an ordered probit regression model may be superior to the OLS model we use. In fact, we also estimated the ordered probit model as a check on our results and found they were sufficiently similar to warrant presentation of the OLS results without any major concerns over the statistical approach taken. 6 That is, having controlled for all other impacts represented by the other variables in the model.

References Bacon, N., Ackers, P., Storey, J. and Coates, D. (1996), ‘‘It’s a small world: managing human resources in small businesses’’, International Journal of Human Resource Management, Vol. 7, pp. 82-100. Booth, A.L. and Chatterji, M. (1997), ‘‘Training and Unions’’, Discussion paper No. 1573, Centre for Economic Policy Research, LSE, London. Elias, P. (1994), ‘‘Job-related training, trade union membership, and labour mobility: a longitudinal study’’, Oxford Economic Papers, Vol. 46, pp. 563-78. Holtmann, A.G. and Idson, T.L. (1991), ‘‘Employer size and on-the-job training decisions’’, Southern Economic Journal, Vol. 58, pp. 339-55. Jacobs, J.A., Lukens, M. and Useem, M. (1996), ‘‘Organizational, jobs, and individual determinants of workplace training: evidence from the national organizations survey’’, Social Science Quarterly, Vol. 77, pp. 159-76. Oi, W. (1983), ‘‘Heterogeneous firms and the organization of production’’, Economic Inquiry, Vol. 21, pp. 147-71. Pfeffer, J. (1998), The Human Equation: Building Profits by Putting People First, Harvard Business School Press, Boston, MA. Reid, R., Dunn, B., Cromie, S. and Adams, J. (1999), ‘‘Family orientation in family firms: a model and some empirical evidence’’, Journal of Small Business and Enterprise Development, Vol. 6, pp. 55-67. Reid, R.S. and Adams, J.S. (2001), ‘‘Human resource management: a survey of practices within family and non-family firms’’, Journal of European Industrial Training, Vol. 26 No. 6, pp. 310-20. Reid, R.S., Morrow, T., Kelly, B. and McCartan, P. (2001), ‘‘People management in SMEs: an analysis of human resource strategies in family and non-family businesses’’, mimeo.

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Introduction

Strategic HRM for SMEs: implications for firms and policy Maryse J. Brand and Erik H. Bax

The authors Maryse J. Brand and Erik H. Bax are Associate Professors in the Faculty of Management and Organization, Groningen University, Groningen, The Netherlands. Keywords Education, Training, Human resource management, Small- to medium-sized enterprises, The Netherlands Abstract This paper is on the growing importance of strategic human resource management (SHRM) for small and medium-sized enterprises (SMEs). Many small firms encounter serious human resource problems, while at the same time these human resources play a vital role in developing and sustaining their competitive advantages. In (S)HRM literature specific issues concerning small firms are rarely addressed. This paper explores this issue further. We conclude that the available knowledge on HRM in small firms is highly descriptive and fragmented. We propose the application of the strategic labour allocation process – model (SLAP) as a tool to analyse HR problems in SMEs. This model focuses on the balance between the supply of and the demand for labour on a firm level. The application of the SLAP model produces two strategic scenarios for Dutch SMEs presently confronted with a tight labour market. Electronic access The research register for this journal is available at http://www.emeraldinsight.com/researchregisters The current issue and full text archive of this journal is available at http://www.emeraldinsight.com/0040-0912.htm Education + Training Volume 44 . Number 8/9 . 2002 . pp. 451–463 # MCB UP Limited . ISSN 0040-0912 DOI 10.1108/0040091020449295

This paper is on the growing importance of strategic human resource management (SHRM) for small and medium-sized enterprises (SMEs) in industrialised high growth countries. More specifically, it will take the Dutch situation as a case to demonstrate the relationship between on the one hand major economic, technological and social changes in the SMEs’ environments and, on the other, the urge to a more strategic thinking on the management of the human resources of this type of firms (Lever and Peters, 1998). From a SME perspective, the study of human resource management (HRM) is relevant for several reasons. First, it is observed that SMEs consider their HRM problems to have top priority (McEvoy, 1984; Hess, 1987; Hornsby and Kuratko, 1990; Huang and Brown, 1999; Dorst and van Meteren, 1999). Second, HRM is of special interest to SMEs because for these firms human resources play a vital role in developing and sustaining competitive advantage (Lado and Wilson, 1994; Duberley and Walley, 1995; Huiban and Bouhsina, 1998; Flanagan and Deshpande, 1996; Ferligoj et al., 1997)). In small firms this is even more relevant as a result of their specific work organisations and because SMEs are relatively labour intensive (Flanagan and Deshpande, 1996). Moreover, as a direct result of the small scale, each individual employee represents a substantive part of the SME’s workforce (Bacon et al., 1998), thus increasing the importance of every single HRdecision. As to the developments in HRM, we observe a shift from HRM to strategic HRM. However, precision is lacking about the status and the definition of SHRM (McMahan et al., 1999, p. 101) even to the extent that it blocks the development of systematic theory (Dyer and Kochan, 1994). For example, Brewster (1999) pointed to the different perspectives of universal and contextual models of (S)HRM, while accepted definitions vary from emphasising the elements of HR planning (Wright and McMahan, 1992; Lundy, 1994), the management of organisational changes (Hendry and Pettigrew, 1990, 1992) and co-ordination mechanisms of the organisation (Watson, 1986), to highlighting HR policies as a tool for business strategy (Beer, 1984;

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Truss and Gratton, 1994; Ulrich, 1997; Dyer and Holders, 1988; Boxall, 1999; Guest, 1987; Lengnick-Hall and Lengnick-Hall, 1990; Schuler et al., 1993). Whatever the differences in definition, most contributions to the literature stress the relation between business strategy and HR practices as the core of SHRM. In this paper, we broadly share this latter type of definition; our specific interpretations will be discussed in the fourth section. The aim of this paper on SHRM in SMEs is to explore if and to what extent the distinctive characteristics of small and medium enterprises (SMEs) lead to the necessity of specific HR strategies. We will enlighten this issue by analysing SMEs’ SHRM problems by the application of a SHRM model developed by Bax (1998). In particular, we are interested in what policy options this model will produce for the solution of dominant (S)HR problems in SMEs. As a case we restrict the analysis to the Dutch context because The Netherlands is a rather interesting case of a tight labour market with which Dutch SMEs have to cope. In the next section of this paper we will define the distinctive characteristics of SMEs. The third section is devoted to an exploration of the HR policies in SMEs. In the fourth section the SHRM model will be presented while the Dutch context and actual HR problems of Dutch SMEs are discussed in the fifth and sixth sections. In the last section conclusions are drawn and suggestions for further research are presented.

Distinctive characteristics of SMEs Small business literature offers much discussion about the definition and (supposed) attributes of small firms (Storey, 1994; Bolton, 1978; Julien, 1998). For our purposes, we are not interested in the variable size per se; instead we will look at strategic HRM and its implications for smaller versus larger firms. Nooteboom (1994) developed a profile of the identity of small firms using three core characteristics: small scale, personality, and independence. Together they constitute a qualitative definition of SMEs, which we will build upon in this paper. Consequently, a whole array of characteristics can be derived from this ‘‘definition’’ (cf. Nooteboom, 1994), leading to three core strategies, namely, innovation, customisation,

and networking strategies. Two of these characteristics should be stressed, i.e. diversity and flexibility. Let us first discuss diversity (Nooteboom, 1994). The personal influence of one or a few individuals on a small firm, i.e. personality, implies that a broad variety of personal goals and motivations determine the behaviour of the firm (cf. Duberley and Walley, 1995; Wagar, 1998; Bacon et al., 1998; Baron and Kreps, 1999; Koch and De Kok, 1999). Because the small firm is independent, the owner has the opportunity to actually pursue his/her diverse goals, while the firm’s small scale yields the manoeuvrability to actually succeed (cf. Baron and Kreps, 1999). The second important feature often attributed to SMEs is flexibility (Storey, 1994; Levy and Powell, 1998). Internal flexibility (Ansoff, 1965) is the firm’s ability to adapt the organisation itself. Small scale, personal involvement and independence all lead to an absence of bureaucracy, creating the SMEs’ reputation of being able to respond readily to changing circumstances (Levy and Powell, 1998). External flexibility is the ability to influence the firm’s environment. Obviously small scale almost automatically leads to little power, hindering active influence on the environment (Arthur and Hendry, 1990; Kitching, 2000). On the other hand, the core characteristics enable small firms to change their environment by changing their strategic niche (Koch and De Kok, 1999). Although these arguments sound reasonable and are widely used, empirical evidence on flexibility is disappointing (Levy and Powell, 1998; Young and Francis, 1993). Probably small firms often do not fully use their flexibility potential (Volberda, 1998). It is the personal attitude of the small business owner that determines whether the flexibility potential that is definitely present in every small firm gets used, or whether small firm myopia gets the upper hand. Probably, the latter is often the case.

HRM in SMEs Reviewing the literature on HRM in SMEs we find that one theme is dominant: the actual use of HRM instruments by SMEs. Other relevant topics that have received much less attention are the quality of SME-jobs

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(including the evaluation of the nature of industrial relations in SMEs) and the possible link of HRM with strategy and competitive advantage and firm performance. Regarding the use of HRM instruments, a first observation is that authors do not agree on the relevant elements of HRM in SMEs (cf. Duberley and Walley, 1995; Wagar, 1998; Benmore and Palmer, 1995). Research shows that HR practices vary highly between small firms (Duberley and Walley, 1995; Julien, 1998; Bacon et al., 1998), are often determined by the ideology and pluralistic goals of the small business owner (Duberley and Walley, 1995; Wagar, 1998; Bacon et al., 1998; Koch and De Kok, 1999), and, as a result of its informality, are more sophisticated than usually expected (Julien, 1998). Julien (1998) provides an extensive overview of 104 studies on a wide variety of HRM related topics in SMEs. Table I illustrates the main findings of Julien, who concludes that: HRM practices do exist and are applied in small businesses, even though they are generally not formalized and extremely diverse, and thus resist generalization (Julien, 1998, p. 332).

This diversity is not only a size effect; other specific factors may be very important, for example country specific (legal) factors that largely determine health and safety policies of all firms. We will exemplify some of the findings mentioned in Table I with specific studies. Table I General differences in HRM practices between smaller and larger firms HRM practices in small firms as compared to larger firms Lower in small firms Higher in small firms Formality

Frequency of use

Employee benefits Work environment

Manpower need planning Introduction new staff Appraisal and evaluation training Tests Training & development HRM training External recruitment assistance Wages and fringe benefits Participatory management

Source: Based on Julien (1998)

Evaluation Internal referrals References Use of job try-outs Satisfaction Informal, personal atmosphere Open communication

One of the elements mentioned very frequently is the relative lack of training in smaller firms (e.g. Kitching, 2000). Arthur and Hendry (1990) and Storey (1999) explain this ‘‘economies of training’’ by the fact that small firms have a higher probability of labour turnover, because they offer less opportunity for career development. As a result, better trained employees will choose opportunities elsewhere leaving the small firm behind with its less trained employees and a depleted training budget. A proposed solution to this problem would be to use company specific (on-the-job) training, which has little value to other firms. Other interesting differences concern small firm recruitment policies. Small firms make extensive use of job try-outs (Duberley and Walley, 1995), which are inexpensive and very well suited to evaluate the actual fit of a person with the (implicit) demands of the job. The personal atmosphere of small firms is reflected in the high use of informal procedures like job posting and bidding (Deshpande and Golhar, 1994; Bax and Dr Bruin, 1993). With respect to the other topics, empirical proof is unfortunately scarce. In general, SME-jobs tend to have somewhat lower employee benefits (Storey, 1994; Van der Meer and Wielers, 1998). Some authors think that the latter is compensated for by a better working atmosphere (Laroche, 1989; Wagner, 1997), while others point to a supposed traditional and relatively backward nature of SMEs’ industrial relations (Wilkinson, 1999; Holliday, 1995). With respect to motivation of the employees, Kamien and Schwartz (1982) and Zenger (1994) found a positive effect in smaller firms because compensation was more directly related to employees’ performance. As to the existence of a relation between HRM, business strategy and firm performance, three main arguments can be discerned. The first one relates to our earlier observation that HRM aims at attracting, developing and retaining human resources, and for many small firms human resources are the core of their competitive advantage (e.g. Huiban and Bouhsina, 1998). The second argument is that implementation of modern management approaches such as JIT and TQM largely depend on HRM factors (e.g. Deshpande and Golhar, 1994; Wagar, 1998; Van der Bij et al.,

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1999). The implementation of such management approaches is a strategic choice, thus leading to a need for strategic human resource management (SHRM). The third and final argument is that in smaller firms strategy development is often an emergent process in contrast with a deliberate and planned process in which supporting functions such as HRM only come into the picture after the strategic decisions have been made. Such an interactive continuous process calls for HRM thinking to contribute as a full partner to strategic decision making as it unfolds (Arthur and Hendry, 1990). Consequently, considerable support exists for the argument that HRM is a strategic factor in many small firms (although mostly not institutionalised) and that we should speak of and focus on SHRM. However, as to the relation between HRM and small firm performance no empirical proof has been found yet. According to Storey (1999), this could be explained by the dependence of SMEs on external developments, that outshine possible internal (e.g. HRM) efforts. Overlooking the extant literature reviewed above, we conclude that most studies concentrate on description and lack theoretical explanation. Consequently, we miss adequate theory based guidelines systematically prescribing how (S)HRM could help small firms to successfully adapt to the new demands they are confronted with.

The strategic labour allocation process model (SLAP-model) Introduction of the SLAP-model The basic assumption underlying the model formulated by Bax (1998) is that the core business of HR managers is to engineer a balance or fit between the supply of and the demand for labour. That is to say, every production process demands a certain number of specific tasks for people to fulfil. These are the quantitative and qualitative dimensions of the demand for labour. On the supply side the HR manager needs a number of people with the required skills and capacities in order to perform the tasks required: the quantitative and qualitative dimensions of the supply of labour. In order to meet the demands of the tasks to be performed, the HR manager can use people already employed by the organisation or he/

she can recruit people from the external labour market (Strober, 1990; Snell and Dean, 1992). In fact, modern HR managers are constantly engaged in managing processes of allocating labour within the organisation. As the model is about the strategic dimensions of these processes, it is called strategic labour allocation process model (SLAP) (see Figure 1). HR managers are not free in choosing their ways to bring about the desired balance in the labour allocation process. A diversity of external forces determines the degrees of freedom to manipulate the variables that shape the supply and demand side of the process (Pfeffer and Salancik, 1978). So HRM has to deal with constraints produced by other organisations (Greening and Gray, 1994; Oliver, 1991; Taylor et al., 1996) and by institutions (Judge and Zeithaml, 1992; Meyer and Rowan, 1977). Next to these organisational and institutional forces one can also distinguish economic, socio-cultural and technological variables (Adler, 1992; Bax and De Bruin, 1993; Bax, 1994) which affect the labour allocation process inside the firm. All these factors have in common that they can not – or only marginally – be manipulated by the individual firm. The latter has to accept this external environment as given and must plan its internal policies in order to adapt to it. Supply and demand are rather abstract terms originating from the economist’s vocabulary. The supply of labour – be it from resources internal or external to the organisation – is moulded into the needs of production by instruments like recruitment, selection, training, assessment and rewarding. In the design of organisations, the demand side is translated into structures, culture and production technology. On the lowest level of abstraction, structure and culture are expressed in task, functions and social roles. It is important to see that according to the basics of the SLAP-model and contrary to more traditional conceptions of ‘‘personnel management’’, the fit between supply and demand is not only to be achieved by manipulating the supply side of the labour allocation process. Recruitment, selection, training, assessment and rewarding are only one side of the story: HR management should also redesign (parts of) the production process in an attempt to close the gap between supply and demand.

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Figure 1 The strategic labour allocation process model (SLAP)

In terms of the SLAP-model, we conceive as a first meaning of human resource strategy the set of ideas concerning both the direction of redesigning the organisation and the application of instruments like recruitment, selection, training, assessment and rewarding. This should lead to an equilibrium between the supply and demand side of the labour allocation process given the prevailing goals of the organisation (e.g. maintaining profit potential) and the expected changes in the external environment. The latter points to the introduction of the time factor as one of the core elements of the model: one of the emphases in strategic HRM should be on the anticipation of expected changes in the external environment of the organisation. The second meaning of human resource strategy relates to business strategy as a more general phenomenon. Here the argument is that for a business strategy to be successful the condition must be fulfilled that it should be congruent with HR practices that promote the appropriate patterns of employee behaviour (Huselid, 1995; Youndt et al., 1996; Delery and Doty, 1996; Fisher, 1989; Schuler, 1989; Kamoche, 1994, 1996; Schuler and Jackson, 1987; Schuler and MacMillan, 1984; Huselid and Becker, 1997; Schneider and Bowen, 1985; Johnson, 1996; Sanz-Valle et al., 1999; Keng-Howe Chew and Chong, 1999). By the strategic use of human resources firms can develop ‘‘sustainable competitive advantage’’ (Barney, 1991; Swiercz and Spencer, 1992). In the

SLAP-model this ‘‘resource-based’’ perspective is specified by means of the concept of distinctive competencies as defined by Van der Heijden (1996). In his approach to strategy, value creation is the ultimate aim. Whether or not the organisation will succeed in creating value depends on its distinctive competencies such as e.g. company know-how, knowledge of customer values, shared assumptions and values, leadership style and commitment, staff identification and commitment, culture and internal communications (Van der Heijden, 1996, pp. 61-6). Concerning the SLAP-model two important remarks are left to be made. First, distinctive competencies are no static entities. Changes in the external environment may not only have their effects on the labour allocation process of the organisation itself, but may also positively or negatively affect the degree of distinctiveness of its competencies. Second, an essential trait of the SLAPmodel is that it has an output in terms of the quality of working life and the conditions of employment. In turn, these largely determine workers’ commitment, labour turnover, (sickness) absenteeism and the like. Here the model builds on the so-called ‘‘bundling hypothesis’’ (MacDuffie, 1995) which states that ‘‘HR practices affect performance, not individually, but as interrelated elements in an internally consistent HR bundle or system’’ (McMahan et al., 1999, p. 103).

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We stated earlier that HR management is not completely free in engineering the equilibrium of the supply and demand sides of the labour allocation process: the degrees of freedom management has are largely determined by the nature and strength of the relevant forces in the external environment. Next to these, an issue of utmost importance is how the prospected outputs of the planned adaptation process relate to the organisation’s distinctive competencies. Furthermore, distinctive competencies are directly linked to the way the labour allocation process is shaped. To make this clear we will introduce a distinction between type of organisation, ‘‘hard’’ and ‘‘soft’’ contracts and type of business strategy. Type of organisation, type of contract and business strategy We can put every organisation on a continuum ranging from mechanical to organic. These two terms are derived from the works of Durkheim (1893) who distinguished between social entities that can be classified as borrowing their social cohesion from social hierarchy (mechanical solidarity) and those of which social cohesion is the product of (inter)dependencies produced by the division of labour (organic solidarity). Mechanical organisations stand for standardisation and hierarchy. Max Weber’s bureaucracy concept is the model of a mechanical organisation. Conversely, organic organisation means the absence of standardisation (Mintzberg, 1983, pp. 35-6) and is characterised by mutual dependencies of the participants, a diffusion of power and commitment to the goals of the organisation (Bax, 1991). Of the latter, the professional organisation is a good example. Type of organisation is a variable that belongs to the demand side of the labour allocation process. This variable can be matched with type of contract, a supply side variable because it relates to recruitment, assessment and rewarding. Williamson and Ouchi (1983, p. 26) distinguish ‘‘hard’’ and ‘‘soft’’ contracts. Hard contracts emphasise transaction costs, apply ‘‘Taylorism’’ in reward policies and employ people in jobs rather than in careers. Soft contracts, on the other hand, focus on vision and values of the organisation, support a ‘‘clan’’ culture, are characterised by long-term socialisation processes, and reward experience and length of service while employing people in careers

rather than jobs (Tyson, 1995, p. 93). Hard contracts match the characteristics of mechanical organisations; organic regimes rely more on soft contracting. Table II shows the links between business strategy, type of organisation and type of contract. Here we use the well-known typology by Miles and Snow (1978) in order to classify business strategies. From Table II it becomes clear that in two cases the links are not self-evident. Defender organisations may be more oriented either to pricing or to quality. If they choose pricing, a more mechanical and hard contract orientation is likely. In the case of quality-directed policies we may expect organic organisation and soft contracting. The dominant trait of reactor organisations is that they do not have a clear strategy; therefore, we cannot put forward any proposition as to links with type of organisation and type of contracting. Further, the SLAP-model states that outputs like turnover, productivity, commitment and the like may have negative or positive effects on the very nature of the organisation’s relevant distinctive competencies. For example, if an organisation follows a business strategy of innovation, it needs an organic structure and a well-trained and committed workforce in order to reach its goals. If for whatever reason such an organisation decides to ‘‘rationalise’’ and to introduce hard contracting, we may expect employees’ commitment to deteriorate and labour turnover to rise (ceteris paribus). Gradually the nature of the organisation will change into a more mechanical direction as management is forced to put more emphasis of external controls because of a decreasing intrinsic motivation of the workers. In the end this process will lead to a corrosion of the organisation’s related distinctive competencies and, consequently, to an undermining of its innovative power.

The Dutch situation Industrial relations in The Netherlands are considered to be different from what is found elsewhere in the Western industrialised world. In the so-called Dutch ‘‘Rhineland’’ model, legislation, institutions and stakeholders all play an important role in shaping HRM policies and practices. Boselie et al. (2000) demonstrate that due to these institutional

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Table II Business strategy, type of organisation and type of contract Business strategy

Defender organisation Niche market defended by pricing or quality Prospector organisation Innovation, flexible, decentralised Analyser organisation Risk reduction by imitation, efficiency and stability Reactor organisation Reactions to short term pressures: no clear strategy

pressures 12 out of 16 Pfeffer’s so-called best practices (Pfeffer, 1994) are rather common in The Netherlands, also among small firms. During the last few decades, within this socio-cultural setting, Dutch SMEs[1] gained substantially from a relative abundance of labour supply. Relatively low wages, a high unemployment level and many newcomers (especially female part-time workers) on the labour market, provided SMEs with relatively cheap and flexible employees. This gave SMEs a relative advantage over larger firms since SMEs are traditionally more labour intensive (Thurik, 1998). However, in the last few years things have been changing, mainly as a result of changes in the labour supply. First, a significant shift in the age distribution of the total population is diminishing the quantity of labour, i.e. the volume of the available labour force. In 1970, one in ten Dutchmen were over 65 years old, but in 2000 this ratio had grown to one in seven (ING, 2000). Second, as unemployment levels go down, the average quality of the unemployed falls sharply; only ‘‘difficult’’ cases are left over on the labour market. Third, while labour demand rises both in large and smaller firms, the nature of knowledge and skills required changes as a result of the so-called ‘‘new economy’’. This has led to growing recruiting competition between organisations. The developments just described have led the Dutch labour market into serious imbalance. The last few years, actual job growth recurrently exceeded the estimates. In 1999, the expected job growth for 2000 was 37,000 jobs (EIM, 1999). At the beginning of 2000 the estimates were raised to 54,000 (EIM, 2000a), and the most recent estimates indicate 84,000 new SME jobs in 2000 and another 75,000 in 2001 (EIM, 2000b). Net

Type of organisation

Type of contract

Mechanical/organic

Hard/soft

Organic

Soft

Mechanical

Hard

????

????

job growth in the larger Dutch firms (employing about 54 percent of the workforce (EIM, 1999)) is limited to about two thirds of these numbers. The level of vacancies is another relevant indicator. In August 2000, the total number of jobs in small and large private enterprises amounted to 4,813,000. The ratio of unfilled vacancies to jobs was 1 to 27 in large firms, and 1 to 21 in small firms (estimates based on EIM (1999) and CBS (2000)). The Dutch SME-employers’ organisation warns that this labour shortage makes small firm owners choose stagnation strategies instead of growth (Het Financieele Dagblad, 2000a, b). At the same time, the number of people that are available for the labour market, but unable to find a job, is still large. Especially minority groups (based on country of origin, age, sex, race or limited abilities) still seem to have this problem. A study by Dorst and van Meteren (1999) sheds some more light on the urgency of the problem as experienced by the small firm owners themselves. In this study, 723 SMEs were interviewed by telephone and asked about their most pressing problems. Personnel and social security – in The Netherlands the latter is strongly linked to the former – both ended up in the top three. SMEs with personnel problems specifically mentioned the following issues: adequate personnel (75 percent), level of education and quality (23 percent), labour shortage (14 percent), retaining employees (9 percent), high employee demands (5 percent). We may conclude that a majority of the small firms merely see their problem as an internal problem (‘‘I can’t find the right person’’) while only a minority (14 percent) sees an external labour market problem.

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Actual reactions of Dutch SMEs and possible solutions When presenting the SLAP-model, we described the essence of human resource strategy as striving for equilibrium between the demand and supply side of the labour allocation process within the firm. When we look at the actual and recommended HRreactions in Table III, we see that all these reactions consist of adapting recruitment, selection, training and/or rewards. In other words, they all aim at influencing the labour supply side of the SMEs’ labour allocation process. Another reaction that is not mentioned in Table III is tapping into the labour supply across the border, either by hiring foreign employees, or by moving production facilities abroad. For Dutch SMEs, this type of internationalisation has not been very successful. First, recent experiences in The Netherlands – such as hiring foreign workers from the UK and Poland – failed because of cultural and language problems, and because in general Dutch politicians feel that the Dutch long-term unemployed should have the priority. Second, research shows that the internationalisation of (Dutch) SMEs is largely limited to direct imports and exports (Eshuis, 2000). Dutch SMEs are not very keen on relatively complex international relations, in spite of many governmental efforts to stimulate such activities. A third factor is that SMEs’ position and job growth are particularly strong in the services sector jobs (EIM, 1999), and in manufacturing niches where craftsmanship is more important than efficient production. These types of

activities are relatively difficult to perform with foreign employees, let alone in foreign countries. From our analysis above it follows that these policy recommendations will most probably not have the desired effects. First, the recommendations from Table III can be summarised as ‘‘more of the same recipe’’. They implicitly accept the idea that SMEs have to compete on the external labour market for scarce workers. Given the restricted resources of SMEs relative to those of large companies it is very likely that SMEs will lose that battle. Second, and even more problematic, the recommendation to concentrate recruitment on temporary workers and/or relatively marginal sectors of the Dutch labour force will jeopardise the very character of SMEs and, consequently, will indeed encourage a corrosion of their distinctive competencies. Such a scenario is not unlikely and embodies serious risks for the future position of SMEs. As discussed earlier, the profile of SMEs emphasises innovation, customisation and networking strategies. This points to the direction of organic organisation as the predominant type for SMEs. This type is also in line with the two main features: diversity and flexibility. As follows from Table II, soft contracting is compatible with such traits. Given the ‘‘underdog position’’ of SMEs on the external labour market, they will have trouble to attract employees with financial incentives. If they do succeed, these new workers will be more extrinsically motivated, implying that they will always have an open eye for new opportunities. As soft contracting presupposes long periods of socialisation, one can raise serious doubts as

Table III Actual and recommended reactions to HR-problems for SMEs Source

Actual and recommended reactions

Dorst and van Meteren (1999) (opinion of small business owners)

More intensive recruiting Lowering of standards Temporary workers Improve terms of employment Improve personnel policy, develop HR-vision Approach new target groups New recruitment methods, collaboration Improve qualifications of employees (training) Improve image of SB-sector More and better active mediation by third parties

Dorst and van Meteren (1999) (final recommendations)

Brouwers and van Driel (1999) (recommendation) Investors in People program (Taylor and Thackway, 1995)

Improve image of SME-employers

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to the returns on the investments of this kind of human capital. The lowering of the standards of skills combined with an increasing uncertainty about the returns on investments in human capital may provoke a trend to standardisation, i.e. into the direction of more mechanical types of organisation. Such a trend will be strengthened the more SME employers have doubts about the length of the terms of employment of their new staff members and will substitute socialisation by the introduction of more formal controls. The obvious output of this scenario is a loss in terms of distinctive competencies and profit potential. However, one could also think of a more optimistic scenario for the future of SMEs. Small firms will typically be organic organisations, using soft contracting, creating commitment through a good quality of working life. As the SLAP-model shows (Figure 1), this type of policy belongs to the labour demand side of the system, ultimately depending upon the design of adequate tasks, functions and roles. With this in mind, what then could be adequate reactions of Dutch SMEs and their related parties? . Most importantly, small business owners, small business associations, consultants and government should all acknowledge the importance of a dual approach to strategic human resource management. Such an approach acknowledges human resource management as a continuous process of balancing labour demand and labour supply. Because external forces largely influence this process, strategic solutions should be aimed at facilitating this adaptation process instead of searching for ad hoc solutions. . SMEs could use their known strengths such as internal flexibility, direct communications and integrated tasks to design jobs which fit available personnel. This strategy entails the creation of jobs around the unique experience, knowledge, skills, and interests of newly hired employees e.g. seniors, part-time workers, members of ethnic and cultural minorities. This strategy is also called ‘‘serendipitous’’ job design (Lado and Wilson, 1994). . If the present product/marketcombination gives few opportunities for the desired job design, the small firm

.

.

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could profit from its small scale, and look in the external environment for other strategic niches in which the desired job design is possible and which fits with available labour supply (i.e. external flexibility). These jobs could be attractive for employees working for other firms (i.e. larger ones) and for unemployed people who do not fit the standard jobs available (i.e. the minority groups). Simultaneously, this strategy offers the present employees interesting job opportunities, thus decreasing the firm’s labour turnover. If small firms continue preferring to influence the labour allocation process through the supply side, again they could try to use their strengths. This means that by using their experience in network strategies they could develop a joint power and resource base on the labour market. Specifically, we are thinking of (more intensive) use of e.g. co-operative labour pools and training and development funds, or even regional or national campaigns to improve the small business sector’s image and to interest more and better future employees. The Investors in People program mentioned in Table III would be a first step in that direction, particularly because the Dutch government stimulates this program for SMEs in particular. In this option, third parties could play important roles. These parties could include for example trade organisations and unions, but also commercial intermediaries such as temporary employment agencies. As soon as small firms try to influence the labour supply individually, the whole small business sector runs the risk of cannibalism (stealing each other’s employees) or deteriorating competitive advantages (through declining quality of the workforce and/or higher labour costs) as we described earlier. Finally, the government may have a task. Whatever specific reaction small firms choose, they typically run into small firm disadvantages such as limited staff, narrow knowledge base, and relatively high transaction costs. Although the Dutch government already has many SME-programs, to our knowledge these programs are also labour supply oriented

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(e.g. special mediation for minority groups). By developing and spreading knowledge on ‘‘serendipitous’’ job-design (Lado and Wilson, 1994) government could help small firms to exploit their natural advantages instead of mainly compensating for natural disadvantages.

Conclusions In this paper, we summarised the existing body of literature on strategic HRM in general, and on HRM in smaller firms in particular. We concluded that, although general support exists for the idea that SHRM is relevant for small firms, the available knowledge is highly descriptive and fragmented and yields no theoretically supported guidelines for SMEs and/or institutions that are working with SMEs. In order to provide a theoretical base for such guidelines, we introduced the Strategic Labour Allocation Process – model (SLAPmodel) which links the firm’s internal labour supply and demand to the firm’s strategy and the significant developments in its environment. From the application of the model to the case of Dutch SMEs we conclude that it indeed enables the analyst to evaluate present SMEs’ policies and to broaden the latter’s options. Since our analysis encompasses the diverse population of smaller firms and leans on existing empirical material, it is difficult to come up with generalisations. Further empirical research should address the actual utilisation of labour supply adaptation by (Dutch) SMEs, and the process of achieving this new fit between the organisation and the labour supply. This could lead to sector and/or firm level contingencies and more hands-on implications of the SLAP-model for small business managers.

Note 1 In The Netherlands, SMEs are usually statistically defined as having less than 100 employees.

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UK news Make IT a basic skill, urges task force Information technology should be designated a basic skill by 2010, according to a report from the task force on e-learning, which looked at how to make post-16 learning easier to access, more flexible and suited to the needs of individuals using new technologies. The move would mean that everyone would have access to free courses to improve their basic IT skills. The initial focus, however, would be on 16 to 18-year-olds in full or parttime study, those in modern apprenticeships, the unemployed and people in part-time work. The report also recommends: . The creation of College Online, an expansion of Curriculum Online into the post-16 sector. This would give teachers and tutors in the post-16 sector access to a bank of online learning resources to use with their students to help to make learning more exciting. . A national mentoring programme, with 5,000 additional e-learning mentors to support tutors online, with a central database at www.mentornet.org.uk. . The development of an online careers adviser to give people easy access to advice on the most suitable learning and job opportunities. . Improvements in work-based learning. Small businesses would be supported and offered incentives to provide relevant occupational online learning. Investors in People UK would include access to elearning opportunities as standard, as part of its strategy to engage more small businesses. Education and Skills Secretary Estelle Morris welcomed the report’s contribution to thinking on the future of post-16 education. ‘‘Everyone should have the opportunity continually to update and improve their skills,’’ she said. ‘‘This is crucial for their own career development and for a competitive economy. But sometimes people can’t access the learning they need because courses simply don’t fit around their daily lives. ‘‘New technologies open up huge opportunities to give people access to the learning they want in a way that suits their needs. The success of learndirect has shown

the potential of online learning. This report looks at how to use new technology in post-16 learning to maximum effect to give people even greater flexibility and choice.’’ Steve Morrison, Granada plc chief executive, chaired the task force. ‘‘We recommend that an understanding of IT becomes Britain’s third basic skill,’’ he said. ‘‘IT should sit alongside literacy and numeracy and everyone in Britain should have a free entitlement to basic IT skills by 2010. ‘‘It is the gateway to e-learning and the wealth of course materials increasingly available online, so we are also recommending the establishment of College Online. This can bring knowledge to the learner wherever he or she may be. It brings the college to the company, the library and leisure centre or the home. College Online opens up education to everybody.’’

Graduate starting salaries to rise by 4.2 per cent Median graduate starting salaries are expected to rise by 4.2 per cent to £19,600 in 2001-2002, according to Association of Graduate Recruiters (AGR) figures. The half-yearly review of graduate salaries and vacancies – based on the responses of leading UK employers – also reveals that 2001-2002 starting salaries range from £11,000 to £37,000. Graduates entering the legal sector can still expect the highest median starting salaries (£28,000), followed by those in banking and finance (£23,500). The lowest median starting salary is anticipated in the accountancy sector (£17,500). As the war for talent escalates, a quarter of companies are offering ‘‘golden hellos’’ or some form of joining payment to attract top talent. These range from £500 to £11,000, with a median payment of £1,500. However, vacancies are expected to fall by 6.5 per cent overall during 2001-2002. This contrasts sharply with the 14.6 per cent increase predicted this time last year, perhaps reflecting changes to the market conditions and economy since September 2001. This fall is not uniform across all sectors. Some 32 per cent of employers intend to increase their graduate intake and a further 29.5 per cent expect it to remain at the same level as last year, suggesting that employers have confidence in the labour market and business stability in the medium term. The growth in vacancies is highest for energy and water (29.2 per cent), while the sharpest fall is

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forecast in the IT, software and telecommunications (39 per cent). Some 14 per cent of employers anticipate that they will not fill all their vacancies – a fall of 4 per cent on last year. Shortfalls are most likely in the food, drink and tobacco sectors. Carl Gilleard, AGR chief executive, said: ‘‘Although employers continue to be cautious in the current economic climate, it is encouraging that many plan to maintain or increase their graduate intake over the next year. The war for talent is keeping starting salaries on an upward path. ‘‘But it is important to note that the market is not buoyant in all sectors. Some graduates, particularly those in IT, software and telecommunications, will face stiffer competition than others to get the job they want.’’

Degree ‘‘opens door to best jobs’’ Graduates are twice as likely to be promoted at work, twice as likely to go on holiday abroad, and they own homes that are 50 per cent more expensive than their non-graduate peers. People who gain degrees also have access to the best jobs, are less likely to smoke and more likely to vote. These are the conclusions of research commissioned by the Department for Education and Skills, and a separate study by the Institute of Education, on the benefits of higher education. The Government research found that: . The average value of homes owned by graduates is £153,000, compared to £101,000 for non-graduates. Graduates can also afford more rent, at £423 a month compared to £256 for nongraduates. . Graduates are twice as likely to go on holiday abroad. Almost half of nongraduates did not take holidays abroad, compared to one-fifth of graduates. . Graduates had twice as many promotions at work as non-graduates over the last five years. Only 36 per cent of graduates had not been promoted at all, compared to 57 per cent of non-graduates. A paper presented at a Smith Institute seminar by Professor John Bynner, of the Institute of Education, concluded that: . graduates were 16 per cent less likely to smoke; . graduates were more likely to have voted in the last general election;

.

.

graduates were more likely to be involved with their local communities and members of local community and voluntary groups, including parentteacher associations; and higher education enhances labour-market prospects, not only through earnings, but through ‘‘guaranteed access to the best jobs’’.

Lifelong Learning and Higher Education Minister Margaret Hodge said: ‘‘We already know that having a degree means, on average, that you earn £400,000 over a lifetime more than non-graduates. Now this research confirms that those who aim higher and get a degree enjoy a better lifestyle and standard of living. ‘‘This goes to show how important it is that all our bright young people who have the ability get the chance to go to university. At present, only one in eight young people in the bottom socio-economic group goes to university, compared with three in four in the top socio-economic group. We will have failed if we hit our target of 50 per cent participation in higher education among 18 to 30-year-olds by 2010 without recruiting from those groups which have historically missed out on higher education. ‘‘The benefits to the individual from gaining a degree are immense. But aside from that, more graduates will strengthen our economy. Our labour-market forecasts show that eight out of ten of the new jobs created over this decade will require the sorts of skills that can be acquired through higher education. ‘‘I think people forget that we only want half of our young people in higher education, and that some of those will be doing high-level vocational courses that will meet employers’ needs. That still leaves another 50 per cent to pursue valuable careers that will fill skills shortages in plumbing, construction and other trades.’’

Smallpeice helps young people to try engineering More than 300 young people have had the chance to experience engineering first hand through a series of four-day residential courses held at British universities by the Smallpeice Trust. More than 30 14 and 15-year-olds attended an electronic-engineering course, run in partnership with Government Communications Headquarters (GCHQ) and Qinetiq. The course, designed by GCHQ and

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facilitated by graduates from both organizations, was the second time that this specialist course had been run following a successful pilot event last year. After an introduction to analogue and digital electronics – and having tried their hands at a number of practical exercises, including designing and building a radio receiver and a locking system – the students were challenged to design and build a buggy capable of following a white line around a track using opto-switch sensors, with fibre optics controlling the speed. The students also had the opportunity to see and try a genuine Enigma machine and other coding devices, and learnt about careers in electronic engineering and opportunities for career development within the two organizations. More than 40 16 and 17-year-olds attended the first Smallpeice engineering and businessskills course, which offered an insight into entrepreneurship and careers in new technologies. The students learned about developing teams and completed a questionnaire to find out their key roles within their own team. The students practised their communication skills with the Oxford Problem Solvers, and learned how to market their products. Ford Motor Co and the Engineering Employers’ Federation provided management games to consolidate and practise the skills learned. The course concluded with presentations on gap-year opportunities and engineering degrees, and advice for completing UCAS forms. The Smallpeice engineering-skills and careers course was attended by more than 100 14 and 15-year-olds. The Construction Industry Training Board provided an icebreaker. This was followed by a series of halfday workshops in project management, materials selection and engineering design. Smiths Aerospace offered advice on career planning. Personal case studies and an insight into the career opportunities available were presented by graduates from Rolls Royce, GCHQ and the Royal Navy. The course ended with a robotic project and competition, by the Oxford Trust. Meanwhile, 50 youngsters, aged 13 to 15, attended a marine technology course, run in partnership with Young Engineers and sponsored by Lloyds Register. The course included presentations from the Royal National Lifeboat Institution, Qinetiq, the Royal Navy and Lloyd’s Register, and the students were given a choice of three designand-build projects which encouraged them to investigate real-life specifications of ship

building. Time was spent designing and making boats from various materials and technical sets, and the products were tested in a competition held at the local swimming pool. The students also visited the Sea Mounting Centre (part of the Warship Support Agency) where they had the opportunity to see where repairs and maintenance of maritime-based platforms, systems and equipment take place. Some 20 girls flew to France, and 20 to Finland, to attend two further courses presented by the Smallpeice Trust. Visits to industry, practical workshops and presentations by women engineers demonstrated the global aspect of engineering and the opportunities for women in what is still a male-dominated environment. Further information is available from the Smallpeice Trust, on +44 1926 333200, or on the Internet, at www.smallpeicetrust.org.uk. Meanwhile, an innovative learning centre designed to encourage more young engineers is being pioneered by Stourbridge College. It has teamed up with Sandwell Training Association on the initiative, which is modelled on the college’s £8.5 million advanced-technology centre (ATC) for the built environment at Brierley Hill. Sadie Walton, college principal, said: ‘‘Engineering is a much-maligned industry. We want to replicate what we have at our pioneering ATC and to change the perception of the engineering industry to one that is exciting and vibrant. ‘‘We are keen to form strong partnerships with local training providers like Sandwell Training Association and the Learning and Skills Council to help to change the perception of engineering across the Black Country.’’

Indian restaurants face staffing crisis The UK’s Indian restaurants face a staffing crisis caused by a shortage of specialist training courses for chefs and waiters and an increasing reluctance of young people to join the industry. Enam Ali, Guild of Bangladeshi Restaurateurs chairman, said: ‘‘There is already a shortage of skilled labour available to the Indian restaurant industry. This will only get worse unless more young people can be persuaded to come into the profession, preferably having been through specialist training. ‘‘The market is not only growing, it is becoming more sophisticated. It is

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demanding higher levels of skills both in the kitchens and front of house. But 99 per cent of staff taken on by Indian restaurants are untrained. It is left to restaurateurs to bring them up to the required standards. ‘‘This simply is not good enough. Colleges should be doing more for an industry on which Britons now spend £2.8 billion annually.’’ Enam Ali said he would like to see more centres of excellence opened throughout the country, like the Academy of Asian Culinary Arts at Thames Valley University, Ealing, which was set up in 1998, and the Asian and Oriental School of Catering, Hackney, which opened two years ago. Around 1,400 people have graduated from their courses, which are specifically designed to develop the skills needed in the Asian food sector. Professor David Foskett, associate dean at the Academy of Asian Culinary Arts, said: ‘‘We are set up to train existing staff who are looking to upgrade their skills, as well as those without prior experience who wish to enter the industry. Our courses take an all-round approach to the business of Asian cuisine, looking at subjects such as profitability, innovation in food production and preparation, and changing social styles. That is particularly important at a time when south Asian cuisine is moving into a new phase of development, with more up-market, lavishly decorated restaurants and higher-spending customers.’’ But Professor Foskett warned that specialist courses would work only if schools do more to encourage young people into catering. He said: ‘‘Schools just do not promote catering. In fact, I have evidence that some actively discourage their students from applying for catering courses. The whole education system is geared towards A-levels. Students are pushed down this route, whether they are capable or not. Many of them would be better doing more practical studies, such as catering.’’ The Asian and Oriental School of Catering offers students catering skills, health and safety and food-hygiene qualifications and knowledge of how to run a business. Tim Permale, training manager, said: ‘‘There is a huge problem with staff shortages in the restaurant sector. We have had 1,200 students pass through our doors, but they tend to be employed by large catering companies or restaurant chains, to meet the trend for Asian food, while some attend for personal interest. So bad is the skills shortage that the Government has agreed to look at

relaxing the current work-permit regulations, to allow Asian and Oriental restaurants to recruit skilled staff from abroad.’’ Enam Ali commented: ‘‘Customers’ standards and expectations are rising all the time. They are demanding better cooked dishes and highly skilled chefs and restaurant managers. We have to be prepared to compete with the top restaurants, serving European cuisine. But that requires specialist training. ‘‘The Academy of Asian Culinary Arts and the Asian and Oriental School of Catering are doing a terrific job, but we need more like them. Unless we manage to persuade colleges in other parts of the country to tailor more courses to the specific needs of the Indianrestaurant industry, and then convince young people to take up the places, the exciting future that lies ahead could be jeopardised.’’

European news European Commission adopts Erasmus World The European Commission has adopted Erasmus World, a higher education programme to attract more students from non-EU states to Europe and to encourage European students to study abroad. The programme will offer 250 European masters courses and thousands of study grants and fellowships for Europeans and nationals of non-EU states. A kind of Fulbright Programme for Europe, it will help to communicate European cultures and values to the rest of the world. Covering the period 2004-2008, Erasmus World will have a budget of E200 million. Viviane Reding, European Commissioner responsible for education, said: ‘‘European universities receive too few students and visiting scholars from other continents. This deficit is a problem not only because of its implications for the EU’s cultural, political and economic influence in the world, but also because our universities, if they developed links between themselves and with the rest of the world, could take advantage of this greater openness to enhance the quality of what they provide.’’ She continued: ‘‘Erasmus World is the instrument that Europe needs, both internally and in relation to the outside world, to be a winner in the globalization of education. By

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opening our universities to the world, we also open them to Europe.’’ The programme is designed to complement existing regional higher education programmes such as Tempus (concerned mainly with countries from the former USSR, the western Balkans and the Mediterranean basin), Alfa and Alban (for Latin America), Asia-Link and programmes with Australia, the USA and Canada. Under Erasmus World, host European masters courses which already exist, or are to be set up, will be selected for a five-year period. They will receive EU funding and an EU ‘‘seal’’. By the end of the programme, in 2008, around 250 such EU masters courses should have been established. To qualify for the EU seal, the courses should involve at least three universities from three different EU member states, and entail recognized periods of study in at least two of the three universities. The courses will lead to diplomas that are officially recognized in the European countries taking part. The universities will reserve places for thirdcountry students receiving Erasmus World scholarships. The courses will cover various fields and there will be no conditions regarding the language in which teaching takes place. Either directly, or under partnerships between their university of origin and the universities taking part in an EU masters course, postgraduate students from non-EU countries will be able to apply for scholarships to study in Europe for up to two academic years. During their studies, they will follow courses in several member states. The scholarships, amounting on average to e1,600 a month, will cover travelling and living expenses. Around 4,200 scholarships should be awarded to non-EU nationals over the life of the programme. Special attention will be given to ways of avoiding a brain drain from developing countries. EU masters courses will receive visiting academics from universities around the world, for teaching and research assignments lasting an average of three months. Erasmus World will provide support for more than 1,000 visiting academics to Europe from third countries. The academics will receive an average grant of e13,000. Erasmus World will encourage the universities taking part in EU masters courses to establish structured co-operation with topclass universities in non-EU states through joint, three-year projects. This co-operation will provide a means for the exchange of

students and academics. Almost 4,000 European postgraduate students and 800 European visiting scholars should receive support under this aspect of the programme. This co-operation will relate to areas given high priority for higher education in Europe. In addition, Erasmus World will provide financial support for the international promotion of European higher education (publicity material, presence at international education fairs) and for the establishment of services facilitating access of non-EU students to European universities (tools for language training, living conditions for third country students and so on).

Reviews Book Virtual Learning: the Impact of ICT on the Way Young People Work and Learn J. P. Cuthell Ashgate 2002 £39.95 ISBN 0754617769

For almost 20 years, successive governments have realized the importance of computers and computing and made significant investment in them in schools. The latest initiative, the National Grid for Learning, seeks to place online-learning facilities at the heart of the curriculum for both teachers and students, and to use them as a vehicle for lifelong learning. The impact of information and communication technology in the classroom transforms management, organization and traditional teaching approaches. However, many teachers still struggle to come to terms with the issues. Since the mid-1990s, many students have gained access to a personal computer at home. The ways in which they have learned to use the machines, and the uses to which they put them, are often shaped by input from peers, and by personal experience. The education system struggles to meet the demands and expectations of these young people. Those without a personal computer at home are doubly disadvantaged if their schools and teachers cannot compensate.

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Cuthell examines the patterns of computer ownership and use among young people, as well as teacher use and teacher attitudes. The results clearly demonstrate the disparity between student computer ownership and use and that of their teachers. It suggests that the patterns of learning experienced by young people vary with the assumptions and expectations of their teachers. The book contains plenty to interest teachers, lecturers and trainers in schools, colleges and universities.

‘‘blinking eye’’ bridge, the Channel Tunnel, the London Eye and the Greater London Authority headquarters (but not the Millennium Dome) the file stresses the pride many construction workers feel in helping to create something that will live after them. Publication of the file coincides with the latest CITB advertising campaign. Featuring pictures of construction workers who ‘‘supported the Manics’’ (by erecting scaffolding for one of the group’s concerts), ‘‘spent £30 million at the mall’’ (as a buyer for a contractor working on a shopping development), ‘‘specialises in big operations’’ (as a quantity surveyor on a hospital project), ‘‘restored faith at Salisbury’’ (as a stonemason at the city’s cathedral), ‘‘directed a £10 million box-office smash’’ (as site manager at a new cinema complex) and ‘‘dug the Eden project’’ (as an excavator at the Cornish site), the campaign is designed to encourage young people to consider construction as a worthwhile career option. It is all very slick, colourful and dynamic – and deserves to succeed.

Career resource Construction Careers File Construction Industry Training Board 2002

One in 14 of the British workforce is employed in construction. Over the next four years, the industry will need at least 70,000 recruits a year. But too few young people are training for work in the construction industry of the future. Following research with young people and teachers to find out what careers information they want to see and how they want it presented, the Construction Industry Training Board has developed a Construction Careers File, which contains job information, topical projects, case studies of young people in the industry, and plenty of lively images from projects as varied as Cardiff’s Millennium Stadium and the Lowry Centre, at Salford Quays. The file contains an introductory brochure, a main brochure, a 3D puzzle, A3 posters, postcards, a Sitelife magazine, an evaluation form and a merchandise form, to order more from the stock. There are also individual sheets dealing with: design, engineering, finance, management and planning; technical support occupations; interiors and finishing; roofing; plant; trowel occupations; wood occupations; demolition, scaffolding and steeplejacking. The introductory brochure provides a flavour of the construction industry and highlights the variety of careers it offers. The main brochure, A Future in Construction, provides insight into what each job is like and the skills applicants will need in order to succeed. There is also a list of useful telephone numbers for more information, and reference to the CITB Web site. Tapping public consciousness of such high profile construction projects as Gateshead’s

Other publications

The Management of a Student Research Project (3rd ed.) J.A. Sharp, J. Peters and K. Howard Gower 2002 £14.95 ISBN 0566084902

Reflects the changes that have affected student research in higher education since the last edition was published in 1996. Argues that the ability to carry out research successfully has come to be seen as a key transferable skill required of all higher-education students, and addresses directly the skill elements of this. Highlights the impact of the World Wide Web on student research. Includes a new chapter on literature searching, which has been structured around an online search.

Skills and Training Directory (3rd ed.) A. Jolly Kogan Page 2002 £35 ISBN 0749437707

Deals with preparing for future skill requirements, new trends in training, developing a learning culture, IT training and e-learning. Includes advice from experts and

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practitioners in large and small firms, international consultancies, academic institutions and professional bodies. Provides a guide to both current best practice and new thinking. Includes a directory of the sources of information and support available to managers.

reflection. Covers topics such as getting started, seating arrangements, forming groups, managing large numbers, analysis and feedback, dealing with those who seek to dominate, evaluation and ending, coping with horrors, and common mistakes. Seeks to make learning and teaching more participatory in voluntary, government and private-sector organizations, schools, universities, training institutes, management training and community development.

Working to Learn K. Evans, P. Hodkinson and L. Unwin Kogan Page 2002 £40 ISBN 0749436859

Considers the changing nature of work and the effects this has on the learning and skill requirements of individuals, the ways these requirements can be met and the implications of this for the workplace, employers, employees, educators and society. Takes both evidence-based and analytical perspectives. Challenges many generalizations about the changing nature of work and skills, and identifies the workplace itself as a critical site for access to learning. Highlights the implications of change for management, the regulation of employment and the accreditation of learning. Includes examples of current practice and suggests policies and practical approaches that will support excellence and equity in workplace learning.

Participatory Workshops: A Sourcebook of 21 Sets of Ideas and Activities R. Chambers Earthscan 2002 £8.95 ISBN 1853838632

Provides ideas and options for facilitators, trainers, teachers, presenters and anyone who organizes and manages workshops, courses, classes and other learning events. Draws on the experiences and ideas of innovators from around the world, and on the author’s own efforts and errors. Adopts a tone of critical

Events diary Truth in E-Learning 27-30 January 2003, the Rosen Centre, Orlando, Florida, USA The ASTD TechKnowledge 2003 conference and exposition. For more information, go to http://www.roi.astd.org.

Tenth International Conference on Information Technology, Travel and Tourism 29-31 January 2003, Helsinki, Finland The conference is recognized as the annual international event where practitioners and researchers in ICT, travel and tourism meet. The event is organised by the International Federation of Information Technology in Travel and Tourism. Details from Miila Peltonen, on [email protected] (Internet: http://www.ifitt.org/enter).

ASTD 2003 International Conference and Exposition 16-22 May 2003, San Diego Convention Center, San Diego, California, USA An event concentrating on workplace learning and performance. For more information, go to http://www.roi.astd.org.

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Acknowledgement

Throughout 2002, Education + Training has continued to attract a flow of quality papers and it is pleasing to note the continuing international coverage in submissions to the journal. The success of Education + Training is due in large part to the goodwill and energy of those expert reviewers who participate in the journal’s blind peer review process. The efforts of these ad hoc reviewers in providing timely, constructive and helpful reports on journal submissions is very gratefully acknowledged.

The following colleagues have acted as ad hoc referees throughout 2002: Alistair R. Anderson Andre M. Everett Bjorn Andersen Gerry McAleavy Ray Hackney Titus Oshagbemi Alistair L. Goldsmith David J. Muskett Graeme Martin Jim Saker Jim Stewart John Sutherland Keng Choy Chong Laurie Lomas Mark C. Hackett Nick Ellis Philip J. Lewis Sue Browell Graham Badley Richard Holden Editor Vicky Harte Editorial Assistant Paula Fernandez Managing Editor

Education + Training Volume 44 . Number 8/9 . 2002 . p. 471 # MCB UP Limited . ISSN 0040-0912

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Paula Fernandez at pfernandez@ emeraldinsight.com). Truth in E-Learning 27-30 January 2003, the Rosen Centre, Orlando, Florida, USA The ASTD TechKnowledge 2003 conference and exposition. For more information, go to http://www.roi.astd.org

Looking ahead to 2003 Throughout Vol.45 (2003), Education + Training will continue to look at what’s new and innovative the world of vocational education and training. The first issue of the new volume will include the following varied selection of research and practice papers: . ‘‘Let’s have some capatence here’’, a Viewpoint from Professor Reva Brown of Oxford Brookes University, UK. . ‘‘Entering work in the 1960s: reflections and expectations’’. . ‘‘A methodology for improved synergy between classroom and management practices’’. . ‘‘The contextualisation of learning: mentor, prote´ge´ and organisational gain in higher education’’. . ‘‘Life after graduation as a very uncomfortable world’’. . ‘‘Internship and the Nova Scotia Government experience’’. Also coming up later in the volume are special issues on Vocational education and training in SMEs, Student mentoring, and Communities of practice.

Key events for your diary The following events will be of interest to readers of Education + Training. Conference reports from readers attending any of these events would be welcome (contact

Tenth International Conference on Information Technology, Travel and Tourism 29-31 January 2003, Helsinki, Finland The conference is recognized as the annual international event where practitioners and researchers in ICT, travel and tourism meet. The event is organised by the International Federation of Information Technology in Travel and Tourism. Details from Miila Peltonen, on [email protected] (Internet http://www.ifitt.org/enter). ASTD 2003 International Conference and Exposition 16-22 May 2003, San Diego Convention Center, San Diego, California, USA An event concentrating on workplace learning and performance. For more information, go to http://www.roi.astd.org

Partnering with contributors to achieve editorial excellence Emerald is pleased to be able to introduce a new feature of the Literati service to authors and editors. It is primarily, but not exclusively, aimed at those authors whose first language is not English. The Emerald Literati Editing Service will be of key benefit to those whose papers need help in the areas of writing style and grammar. Emerald has carefully selected (by assessing a sample of work and obtaining references) a number of editors whose skills are of a very high quality. These editors have extensive experience in both business and management or scientific and technical fields. The Emerald Literati Editing Service will put authors directly in touch with these editors, with the ultimate aim of increasing the quality of English of an author’s paper and thus increasing the chances of publication. For full information, see www.emeraldinsight.com/ editingservice

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Author and title index Volume 44, 2002

targets: some lessons for the Learning and Skills Council Matlay, H. and Addis, M. 2, p. 76

(The) corporate university model for continuous learning, training and development El-Tannir, A.A.

1, p. 5

Curtis, S. and Williams, J. The reluctant workforce: undergraduates’ part-time employment

Issue & page A Addis, M. see Matlay, H.

Cushman, L. see Wright, J.

8/9, p. 431 Al-Madhoun, M. and Analoui, F. Developing managerial skills in Palestine

D Dabb, H.. see Zapalska, A.M.

Analoui, F. see Al-Madhoun, M.

8/9, p. 406 Davies, J., Hides, M. and Powell, J. Defining the development needs of entrepreneurs in SMEs

B Bax, E.H. see Brand, M.J.

8/9, p. 406 Defining the development needs of entrepreneurs in SMEs Davies, J., Hides, M. and Powell, J.

4/5, p. 199 Bonassi, T. and Wolter, S.C. Measuring the success of transition: the results of a pre-study in Switzerland

8/9, p. 443 (The) determinants of training in SMEs in Northern Ireland Reid, R.S. and Harris, R.I.D.

8/9, p. 451 Brand, M.J. and Bax, E.H. Strategic HRM for SMEs: implications for firms and policy

8/9, p. 431 Developing managerial skills in Palestine Al-Madhoun, M. and Analoui, F.

Brown, W. see Galloway, L. Brozik, D. see Zapalska, A.M.

8/9, p. 370 Devins, D. and Johnson, S. Engaging SME managers and employees in training: lessons from an evaluation of the ESF Objective 4 Programme in Great Britain

4/5, p. 217 Buchmann, M. Labour market entry and beyond: some reflections on the changing structure of work 4/5, p. 224 Buschor, C.B., Forrer, E. and Merki, K.M. The willingness of young Swiss to participate in continuing education and training: initial findings from a survey of young adults

8/9, p. 388 Do they or don’t they? A comparison of traditional and discourse perspectives of HRD in SMEs Rigg, C. and Trehan, K. Duncan, F. see Gammie, E. 1, p. 23

8/9, p. 413 Byrom, J., Parker, C. and Harris, J. Towards a healthy high street: identifying skills needs in small independent retailers

Dymock, D. and Gerber, R. Unintegrated training? Exploring links between off- and on-the-job learning E

C 2, p. 57

(The) challenge of education for active citizenship Potter, J.

6, p. 271

Choueke, R. and West, P. The MSc management development: a programme in management or a management development process? A study focusing on the MSc in management development at Edge Hill

6, p. 250

Competence-based training, vocational qualifications and learning

2, p. 67

(The) effects of term-time employment on academic performance Watts, C.

2, p. 76

El-Tannir, A.A. The corporate university model for continuous learning, training and development

8/9, p. 370 Engaging SME managers and employees in training: lessons from an evaluation of the ESF Objective 4 Programme in Great Britain Devins, D. and Johnson, S.

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4/5, p. 179 Enrolments in higher education: do economic incentives matter? Lauer, C.

the transition to employment of university graduates I

8/9, p. 421 Entrepreneurship education and training in Canada: a critical assessment Ibrahim, A.B. and Soufani, K.

8/9, p. 421 Ibrahim, A.B. and Soufani, K. Entrepreneurship education and training in Canada: a critical assessment

8/9, p. 398 Entrepreneurship education at university: a driver in the creation of high growth firms? Galloway, L. and Brown, W. 1, p. 40

3, p. 144

Evans, K. Taking control? Agency in young adult transitions in England and the new Germany

8/9, p. 378 Innovation and education policy in SMEs: a Czech perspective Lloyd-Reason, L., Muller, K. and Wall, S. J

F

Johnson, S. see Devins, D.

4/5, p. 208 Family obligations and the transition to working life: the influence of parenthood and family obligations on the transition to employment of university graduates Huldi, C.S. Forrer, E. see Buschor, C.B.

8/9, p. 398 Galloway, L. and Brown, W. Entrepreneurship education at university: a driver in the creation of high growth firms?

Kaminsky, F.C. see Maleyeff, J. Keiha, P. see Zapalska, A.M. L

4/5, p. 179 Lauer, C. Enrolments in higher education: do economic incentives matter?

Gammie, B. see Gammie, E. Gammie, E., Gammie, B. and Duncan, F. Operating a distance learning module within an undergraduate work placement: some reflections Gerber, R. see Dymock, D. 6, p. 261

K

4/5, p. 217 Labour market entry and beyond: some reflections on the changing structure of work Buchmann, M.

G

1, p. 11

(The) implementation of NVQs in the Sultanate of Oman Wilkins, S.

Greenbank, P. Undergraduate work experience: an alternative approach using micro businesses

4/5, p. 186 Leemann, R.J. Transitions into research careers in Switzerland 4/5, p. 171 (The) link between unemployment and returns to education: evidence from 14 European countries Weber, B.A. 8/9, p. 378 Lloyd-Reason, L., Muller, K. and Wall, S. Innovation and education policy in SMEs: a Czech perspective

H M

Harris, J. see Byrom, J. Harris, R.I.D. see Reid, R.S.

7, p. 308

Making the most of education and training: an employer perspective (Special issue) Pollitt, D. (Guest Editor)

2, p. 82

Maleyeff, J. and Kaminsky, F.C. Six sigma and introductory statistics education

Henry, J. see Smith, P.J. Hides, M. see Davies, J. 3, p. 112

Holley, D. ‘‘Which room is the virtual seminar in please?’’

4/5, p. 208 Huldi, C.S. Family obligations and the transition to working life: the influence of parenthood and family obligations on

8/9, p. 357 Matlay, H. Training and HRD strategies in family and non-family owned small businesses: a comparative approach

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6, p. 250

Education + Training Volume 44 . Number 8/9 . 2002 . 473–476

Matlay, H. and Addis, M. Competence-based training, vocational qualifications and learning targets: some lessons for the Learning and Skills Council

4/5, p. 199 Measuring the success of transition: the results of a pre-study in Switzerland Bonassi, T. and Wolter, S.C.

8/9, p. 443 Reid, R.S. and Harris, R.I.D. The determinants of training in SMEs in Northern Ireland 1, p. 5

(The) reluctant workforce: undergraduates’ part-time employment Curtis, S. and Williams, J.

1, p. 31

Revising the HR curriculum: an academic/practitioner partnership Thacker, R.A.

Merki, K.M. see Buschor, C.B. 2, p. 90

Morgan, A. The utilisation of NVQs in higher education

6, p. 271

(The) MSc management development: a programme in management or a management development process? A study focusing on the MSc in management development at Edge Hill Choueke, R. and West, P.

8/9, p. 388 Rigg, C. and Trehan, K. Do they or don’t they? A comparison of traditional and discourse perspectives of HRD in SMEs S 2, p. 82

Six sigma and introductory statistics education Maleyeff, J. and Kaminsky, F.C.

6, p. 281

Smith, P.J., Henry, J. and Munro, G. Training young people through a school/enterprise partnership: a longitudinal study

Muller, K. see Lloyd-Reason, L. Munro, G. see Smith, P.J. N

Soufani, K. see Ibrahim, A.B.

Nicholson, A. see Wright, J.

8/9, p. 451 Strategic HRM for SMEs: implications for firms and policy Brand, M.J. and Bax, E.H.

O 1, p. 11

Operating a distance learning module within an undergraduate work placement: some reflections Gammie, E., Gammie, B. and Duncan, F.

T 1, p. 40

Taking control? Agency in young adult transitions in England and the new Germany Evans, K.

3, p. 138

Teaching Maori students business issues: an experiential approach Zapalska, A.M., Brozik, D., Dabb, H. and Keiha, P.

1, p. 31

Thacker, R.A. Revising the HR curriculum: an academic/practitioner partnership

6, p. 290

Tomlinson, N. Passport to Success

P Parker, C. see Byrom, J. 6, p. 290

Passport to Success Tomlinson, N.

3, p. 129

(The) PhD process: the supervisor as manager Vilkinas, T.

7, p. 308

Pollitt, D. (Guest Editor) Making the most of education and training: an employer perspective (Special issue)

2, p. 57

Potter, J. The challenge of education for active citizenship Powell, J. see Davies, J. R

3, p. 122

Reconciling industry and academia: perspectives on the apparel design curriculum Wright, J., Cushman, L. and Nicholson, A.

8/9, p. 413 Towards a healthy high street: identifying skills needs in small independent retailers Byrom, J., Parker, C. and Harris, J. 8/9, p. 357 Training and HRD strategies in family and non-family owned small businesses: a comparative approach Matlay, H. 6, p. 281

475

Training young people through a school/enterprise partnership: a longitudinal study Smith, P.J., Henry, J. and Munro, G.

Author and title index to volume 44, 2002

Education + Training Volume 44 . Number 8/9 . 2002 . 473–476

4/5, p. 186 Transitions into research careers in Switzerland Leemann, R.J.

returns to education: evidence from 14 European countries West, P. see Choueke, R.

Trehan, K. see Rigg, C.

3, p. 144

U 6, p. 261

1, p. 23

Undergraduate work experience: an alternative approach using micro businesses Greenbank, P.

Williams, J. see Curtis, S. 3, p. 112

Unintegrated training? Exploring links between off- and on-the-job learning Dymock, D. and Gerber, R.

2, p. 90

(The) utilisation of NVQs in higher education Morgan, A.

3, p. 129

Vilkinas, T. The PhD process: the supervisor as manager

Wilkins, S. The implementation of NVQs in the Sultanate of Oman

‘‘Which room is the virtual seminar in please?’’ Holley, D.

4/5, p. 224 (The) willingness of young Swiss to participate in continuing education and training: initial findings from a survey of young adults Buschor, C.B., Forrer, E. and Merki, K.M. Wolter, S.C. see Bonassi, T. 3, p. 122

W

Wright, J., Cushman, L. and Nicholson, A. Reconciling industry and academia: perspectives on the apparel design curriculum

Wall, S. see Lloyd-Reason, L. 2, p. 67

Watts, C. The effects of term-time employment on academic performance

Z 3, p. 138

4/5, p. 171 Weber, B.A. The link between unemployment and

476

Zapalska, A.M., Brozik, D., Dabb, H. and Keiha, P. Teaching Maori students business issues: an experiential approach