Training and Development Strategy for small and Medium Sized Enterprises
Training and development is part of a wider business strategy aimed at achieving organizational goals and objectives. The comparatively high cost of meeting legislative requirements in first world economies when compared to developing nations has created significant challenges for firms which compete in a globalized market. There needs to be the development of a flexible workforce.
The goal for this essay presentation is to propose and discuss with clear emphasis training and development strategy or strategies for a Small to Medium sized Enterprise which is restructing in order to compete with foreign competitors who are not constrained by legislation to the same degree. The essay need have to acknowledge that a training and development strategy cannot be managed in isolation. The development of "Flexibility" is often used to describe the removal of many protection built into awards over the past years of industrial relations practice. The external and internal environments of the organization, the organizational context and the HRM activities are all integrated. Therefore, in deciding on a strategy, there is a need to examine characteristics of the organization like the market position, staff numbers, age and demographic features that could impact on the decisions.
The survival of small and medium-sized enterprises in the current business environment requires the exploitation of current knowledge by human resources as well as the discovery of new training and development strategies of doing business as the mastering of knowledge is the culmination of a continuous process of organizational learning requiring important human resources training and development process per se. The challenge to master knowledge is much greater for small and medium-sized enterprises (SMEs) that are globally oriented, as they face competition from more widespread sources. It might therefore be interesting to know how globally oriented small and medium-sized enterprises that are already successfully improved in the competencies of their human resources and prepare them to face increasing challenges of globalization. The fact that they face fierce competition from other SMEs, as well as large multinational firms, implies that they adopt particular behaviors to improve their competitiveness or set them apart from competition .
SME organizations need to develop and change in order to survive. Although there are many competing approaches on how organization?s improvement can be achieved, but organization restructuring seems to be the most attempting model in order to change the organization in the private and public side. In their striving for competitive advantage, reduced costs and increased profitability many companies are embarquing on organisational restructing may deliver extraordinary gains in speed, productivity, and profitability. Human resources management helps in identifying, developing, retaining and appropriating scarce resources. There has been a great deal of concern over efficient SME management and good organization practices and structures in order to create effective strategies within the human resources since inefficient structure and poor communication can no longer be excluded in an increasingly competitive environment and the need for development in response to HR training needs and changes.
Despite the response made by employees, senior mangers didn’t stop their attempts trying to restructure or redesign the organization structure by; developing HRM strategies based around internal labor market with job ladders, regulations, redefining work descriptions, encouraging organizational learning, training and developing systems, creating multidivisional structures, modifications
in size and having second thoughts about classical form carrying implications for training and development possibilities and chances improving the multiple managerial roles replacing the supervisory management and presenting a challenge facing classical principles, satisfying client’s demands while minimizing workforce disruption . Restructuring may be accomplished by making changes to different structures that creates the organisational structure and reflect the reality that restructuring is a process that involves innovation, training and development within HRM transactions.
Human resource processes are central to the implementation of the strategies in development and training as it aligns individuals and teams with the objectives of the business. Training and development manners are crucial to the development of needed capabilities and performance. Increasingly, human resource management activities performed by managers and employees throughout an SME organization is a vital component of employee performance. A primary way to achieve training and development strategy integration is to identify and address SME issues of managing the business and as part of the training planning process. Training and development strategies are effective when important business issues are become less important and are replaced by new emerging issues. In this context, human resource strategies play a critical role in determining the capacity of a business to manage needed change.
Furthermore, intense global competition, dynamic economic and competitive conditions require companies to be adaptive and swift. Businesses today understand that rapid change is needed for sustained competitive performance and are therefore becoming leaner and more flexible. Competitive advantage is achieved by managing people more effectively than competitors as the competitive responses shift such practices to parity, forcing a search for new sources to keep up with rapidly rising competitive standards. Human resource arises as SME’s evolved and adapt as they become complex, gradually recognize the need for a balance between disciplined HR management between what may seem like chaos to rapid competitive changes by loosening controls and adopting greater willingness to change. Thus, flexible organizations adapt their management policies and practices to their competitive situations, changing working relationships and empowering employees and teams to make decisions as competitive situations change. People are adaptive and learning-oriented and so practices in managing people are more flexible as well. In the integrated approach, human resource managers working with them develop long-term strategies to address important people issues. Such strategies involve multiple programs or activities and multiple functions. Human resource strategies are stated broadly and then translated into specific action plans such as the following:
Ø Define the new roles and behaviors required of managers and develop needed capabilities in the context of strategy
Ø Become an business leader in improving teamwork and enhancing productivity
Ø Enable individuals to manage their work, development and performance
Ø Aligning human resource processes and systems with business strategy
Henceforth, certain training and development strategies are translated into objectives and action plans as the human resource integration is achieved when people-related strategies are integrated with business plans per se. Thus, Westhead and Storey (1997) consider that training provision varies considerably in small businesses with size being a significant factor but has found considerable variations between the smallest and larger SMEs. Smaller firms conducted their training internally with a focus on informal skills learning. Larger SMEs tended to obtain more external, formal training with a goal of obtaining recognized qualifications.
As Matley (2002) found significant differences in manager attitudes and approaches towards training needs of the business. The needs of family members were seen in terms of firm-specific HRD issues such as succession planning whereas training for non-family employees was focused on individual career needs. Looking at medium-sized enterprises, Matley (2002) observes that managers continued to be heavily involved in HRD issues despite the increasing levels of complexity and formality found in such organizations. HR managers took charge of training and HRD decisions in cases. However, despite the positive approach to training, most managers did not appear to view training as being crucial to their overall business strategy. Instead, they took a tactical perspective, relating training to the perceived HRD needs of their workforces and seeing training of non-family members as an organizational expense as part of medium development and succession strategies.
The principle development and training strategies are the following:
Ø There needs to urge the employees to provide appropriate behavior for the development of strategies for SME’s
Ø There needs to have proper training in realizing HR principles and norms as it is a crucial tool in integrating ways to adhere to the strategies.
Ø The realization of HR management communication and having a better understanding with the various training and development strategy intended for SME’s.
Ø The providing of useful and reasonable as well as effective training to the employees is also an important strategy for the development of the business intended for SME’s
Effectiveness of the strategies
The strategy for training the employees according to the cultural trends where a new branch is decided to be introduced as well as focusing on building friendly customer relations in the foreign country is a very effective tool to make the foreign national feel comfortable in easy to get into the new taste and communicate for the success of the corporation. Thus, hiring staff and providing good salaries may encourage the working class to come closer to these SME’s
Moreover, the strategies ensures the effectiveness of the strategies adopt by SME’s as well as career opportunities in foreign countries by enhancing the same training and development strategies. The successful HRM services is crucial to the survival and success of business enterprises. Small and medium sized enterprises (SMEs) are no exception , with the increased competition and rapid changes in technology, customer requirements and business practices, product life cycles have shortened . This has imposed pressures including SMEs, to innovate more effectively and efficiently mainly on its processes and strategies which are the "cornerstones of successful product development" .
Furthermore, SMEs are different from large firms in several important areas of HR management and that SMEs can be more flexible and (Vossen 1998). as influenced by managers' proactive personality (Becherer and Maurer 1999). Innovating SMEs seem to be better at development-related activities. Through careful strategic development planning, SMEs can look at their future in a systematic way, communicate it through the organization to realize and apply appropriate organizational structure (Hegarty and Hoffman 1998) that will be able to facilitate essential process for providing enough ways to continue the development of SME’s for better a decision of the HR ways .
More importantly, through such HR development and training planning, SMEs can learn about problems, develop solutions and improve their strategic responses to the environmental complexity and uncertainty (Korbin 1996). As global competition has intensified, many small and medium-sized firms have to adopt international perspectives. Small and medium sized firms usually face unique challenges in the arena of international competition due to their limited resources and capabilities. In a global environment, SMEs face increased competition from scale enterprises in order to survive, SMEs must undertake new initiatives and adapt development management practices that enhance the use of human resources and strengthen business training and measures of development process within the HR perspectives in creating customers' needs, work needs improvement and reliable business context along with the achievement by the SMEs.
Possibilities for Improvement through Training and Development
However, some HR managers did not necessarily think deficiencies could be improved by training and development. They were therefore asked to identify the areas in which they felt improvement was possible, to improve their own deficiencies and of the firm as a whole. There is a crucial need for training directly related to more sophisticated production techniques to satisfy the increased demand resulting from their international activities because of current production capacity to compete of the strategy being used. When SMEs were asked about their top training priorities to penetrate development strategy and finance became the most important concerns. SMEs are able to provide effective translation services. It may also be that training and development strategy can be covered in short training sessions and can be put to use immediately.
Furthermore, strategies in training might play in SME's approach to penetrating the global markets. The fact that companies are willing to look beyond the current market turmoil shouldn't be surprising, given that it has taken many firms more than five years to realize profits from doing business that SMEs do have the patience, persistence and staying power to succeed in human resource process and management. It's becoming necessary to craft more programs that address specific needs that are tailored to individual situations. It will also be important to provide means of measuring the benefits of that training. In fact, it clearly indicate that SMEs won't consider a formal training program unless it addresses their strategic needs and demonstrates that the program will have an impact on the corporate bottom line. Thus, SME development has been studied from a variety of approaches with organization factors such as age and size of business ventures, planning practices used by Small- and Medium-Size Enterprises. According to Fogel (2001) small businesses express a need for management training programs in lieu to human resource that will have to indicate employee satisfaction and business planning and analysis as the most desirable way of assistance to help the small business sector to grow effective in the development of SME’s.
The study of human resources management in SMEs needs to be strongly encouraged as SMEs view human resource management decisions as very important to the growth of their enterprises and new venture growth is very important to the nation's economy. Generally, if people are to have robust theories of managing development and training in human resources in SME’s then the theories need to apply to large business to SMEs, where the majority of training and development regarding jobs reside. Therefore, SMEs will be valuable additions to the strategic human resource management that is becoming established in the organization processes. The response is to adapt a strategic development staffing process that will guide targeted training development for future requirements. Many SME’s are striving for placing high importance on continuous training development with the anticipation of continuous HR changes. Lastly, training and development ways for the SME’s continues to be important to identify needs and ways they may be met throughout the organization in representing active approach to development and that both training and development will be able to provide appropriate human resource management programs in lieu to its respected strategy approaches per se.