AN ANALYSIS FOR FIRM

TRAINING& FIVE
PROPOSITIONS
INTRODUCTION
This is an article by Andrew Smith and Peter. J. Dowling. It includes some findings
from a qualitative study of firm training in a number of manufacturing companies in
Australia. It is related to the scope of the training provided by the firms to their
employees with a variety of independent variables, including business strategy,
technology, industrial relations, management attitudes and competitive
performance of the firms. There have been three major model factors that influence
the provision of firm-level training. In a series of studies in the 1980s, it is
investigated the role of human resource development in firms undergoing rapid
technological change. Researchers of CERI (Center for Education Research and
Innovations) found that in both industry sectors four factors influenced firms were
able to develop a skilled and adaptable workforce. The following are

1. Technology

2. Work organizations

3. Employee relations

4. Human resource development

Technology

All firms in the study had introduced new technologies during 1980s. e.g. ATMs in
the bank, computer- aided design and manufacturing system in the automotive
firms

Work organizations

Innovations in this area included the elimination of repetitive tasks, use of group
work, and the simplification of job classification systems.

Employee relations

Most of the firms in this study were moving away from traditional, adversarial
industrial relation systems and toward a greater emphasis on consultation and
participation.

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Human resource development

The Companies tended to be provided to suit changes in technology and work

organization. The major training effort was focused on the creation of interacting
among employees, use of competency-based–standards, and changing mix of
training provision with greater use of external training providers. CERI research
team demonstrated that these all independent variables were unavoidable linked in
a system. In 1985, Sparrow and Pettigrew identified two sets of factors that affected
the provision of training in progress and factors that establish training within the
enterprise. Firms which comes under competitive pressure and make changes to
their products and services. These changes emphasize a skill gap in the workforce
and training becomes part of the corporate strategy. A skill gap can be remedied in
a number of ways, including by recruitment on the labor market. Training is
stabilized by a combination of factors inside which includes ability of skills on the
labor market and outside which includes training and legislative requirements in the
firm. In Finegold’s game theory, he argued that the development of highly skilled
workforce required the positive interaction of governments that took a long-term
view of skill development, individuals who were motivated to acquire skills and
firms that were wiling to make long-term investments in training.

Research methods

This article reports the results from a case study of the role and nature of the
training in seven Australian manufacturing firms. The research analyzed the impact
of five firms – level variables on the level of training expenditures. The basis for the
selection of case was theoretical sampling. This process allows for the investigation
of a variety of cases that fulfill the requirement for replication logic that is the basis
for multiple comparative studies. (1) range of employment size- has been quoted as
a major determinant of the level of training activity in firms and a range of
employment sizes was viewed as necessary for the research.(2)process
technologies –cases displayed a variety of production processes from assembly
work through metal forming and machining , to production of electronic
components that incorporate a range of technology.(3) types of work organization
(4)business strategies(5) home country locations- Mac Duffie and Kochan have
argued that the home country has a significant influence on the level of training
provision in multinational enterprise.

Training expenditure in the case firm

Training expenditure was obtained directly from the case firms. The training
guarantee scheme which was introduced by Australian Lahore government ensured
that all the case firms were able to produce reliable estimates of their training
expenditure.

Firm training and business strategy

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Strategic Matching model theories suggest that training arrangements will be
closely related to the position of the firm in its lifecycle or the type of generic
strategy that it has adopted. All the firms studied were facing an increasingly
competitive environment at the time of research, primarily as a result of
deregulation of the manufacturing industry involving a sharp reduction in tariff
protection and a consequent increase in international competition. Tele
communication firms were beginning to develop business strategies to cope with
the deregulation of the telecommunication market. NEC and Siemens are some
examples. They are experiencing a significant increase in competition and were
gradually developing intended strategies to cope with the changed market
conditions.

Proposition 1-firms that have been adopted a purposeful strategy are more likely to
provide training for shop-floor employees than those in which strategy is an
emergent phenomenon. Studies of strategic human resource management have
begun show the links between business strategy and HR practices.

Training, Technology, and Work Organization

Degradation of work organization has been challenged by post-Fordist writers who

have claimed that new technology and team based forms of work organization leads
to an increasing demand for skills and thereby an increase in training in firms. The
evidence suggest that changes to technology and work organization produce a
polarization of skills with both deskilling and up skilling occurring. Recently,
research has confirmed the skills polarization theory and shown that it is the
adoption of new forms of work organization requiring new skills that drives
increases in training provision in firms. Although the overall requirements for
training may rise with the introduction of new technology, it appears that the is
differentiated within the workforce-only those employees with direct access to the
technology has been to produce a polarization of skill and leads to Proposition2-
higher the degree of automation in the firm, the greater the level of training that
will be provided to shop-floor employees. Within the constraints of a traditional
approach to work organization, the firms differed significantly in the level of
autonomy accorded to employees and this level was related to the extent to which
firms were using team-based structures on the shop floor. This varied considerably
in between firms. The relationship between work organization and training is not
straight forward. The enterprise occupied three positions regarded to changes in
work organization depend on the degree of autonomy they had introduced for
employees. They are (1) using teams to increase employee decision making,
(2)using teams to increase control of employees, (3)using no teams and providing
no employee autonomy.

Proposition3-firm supporting a work organization with the intention of increasing

employee autonomy will train their employees in behavioral skills. Enterprises

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supporting a work organization that increases control will train their employees in
technical skills.

Training and industrial relations

Developments in Australian industrial relations in recent years have seen a move

away from the centralized system established in 1904towrd a decentralized system
of collective bargaining with a shrinking role for industrial relation commission in
arbitration and conciliation. Training was given a central position in the new,
reconstructed awards as it was linked to new job classification and provided many
blue collar employees with a career path linking pay and skills for the first time, the
role of industrial relation commission has been gradually reduced as firms and
unions have been pursued firm bargaining to negotiate collective agreements that
replace industrial awards. The firms were only beginning to deal with the
implications of implementing new job satisfaction structures. Award restructuring
has introduced a greater degree of consultation into the case firms. The industrial
relations climate in the case firms was remarkably quiet. In firms with a higher
partnership orientation, management attention is focused on building a much
closer, cooperative relationship with the unions. But in the firms with either low or
high partnership orientation, management attention is focused on their relationship
with unions. So in firms that occupy the middle ground on the partnership
dimension, managers can focus on the need of individuals more clearly and invest
more in training and development of individual employees.

Managerial attitudes toward training

It is become saying in training literature that management commitment is required
before training can be implemented effectively in organizations. The vast attitudes
among the managers in the case firms towards training was one of looking for
immediate gains from short, sharp training programs aimed at meeting and specific
and measurable training needs. There were some considerable differences among
the firms in terms of degree of management commitment to training. Training for
quality was viewed as important at some firms but they were also experimenting
with more general forms of training for their shop-floor employees. The level of
management commitment to training varied within firms as much as between firms.
Senior managers in the case firms are tended to display a high commitment to the
importance of training and the importance to the firm of creating highly skilled
workforce. Middle and junior managers in contrast were usually more doubtful. For
this, training must had to have some tangible results. Analyses of firm training that
do not pay attention to the fractures in management attitudes to training risk

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disgustingly oversimplifying the critical role of managers in the implementation of
training programs.

Conclusion
This study has been shown that management attitudes to training are not massive.
Training is no exception to this kind of managerial disunity. Some group of
managers might recognize the importance of developing skills and others might
favor more short term priorities, this may reflect the differential impact of
performance management systems that reward the achievement of short term
goals by middle and junior managers than the activities that build the long term
competitive position of firm. The argument over the role of training at the firm level
has been informed by the analysis of data by the view of training in firms.