Strategic Training

Chapter 2

6th Edition
Raymond A. Noe
McGraw-Hill/Irwin Copyright 2013 by The McGraw-Hill Companies, Inc. All rights reserved.
Learning Objectives
Discuss how business strategy influences the type
and amount of training in a company
Describe the strategic training and development
process
Discuss how a companys staffing and human
resource planning strategies influence training
Explain the training needs created by concentration,
internal growth external growth, and disinvestment
business strategies

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Learning Objectives
Discuss the advantages and disadvantages of
centralizing the training function
Discuss the strengths of the business embedded
model for organizing the training function
Explain a corporate university and its benefits

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Introduction
Business strategy
Integrates the company's goals, policies, and actions
Influences how the company uses:
Physical capital, financial capital, and human capital
Goals- What the company hopes to achieve in the
medium- and long-term future

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Introduction
Strategy determines:
Amount of training required for current or future job
skills
Extent to which training should be customized for
particular needs
Extent to which training is restricted to specific groups
of employees or open to all
Extent to which training is planned and systematically
administered
Importance placed on training compared to other HR
practices
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Learning as a Strategic Focus
Learning organization: A company that has:
An enhanced capacity to learn, adapt, and change
Carefully scrutinized and aligned training processes
with company goals
Training as a part of system designed to create
human capital

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 Table 2.1- Key Features of a Learning
Organization
Supportive Learning Environment

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 Employees feel safe expressing their thoughts about work, asking questions,
disagreeing with managers, and admitting mistakes.
Different functional and cultural perspectives are appreciated.
Employees are encouraged to take risks, innovate, and explore the untested and
unknown, such as trying new processes and developing new products and
services. Thoughtful review of the companys processes is encouraged.
Learning Processes and Practices
Knowledge creation, dissemination, sharing, and application are practiced.
Systems are developed for creating, capturing, and sharing knowledge.
Managers Reinforce Learning
Managers actively question and listen to employees, encouraging dialogue and
debate.
Managers are willing to consider alternative points of view.
Time is devoted to problem identification, learning processes and practices, and
post-performance audits.

Learning is rewarded, promoted, and supported.

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Implications of Learning for Human
Capital Development
Recognition that learning should help:
Employees improve performance
Achieve business goals
Learning should occur on as needed basis
Need to support informal learning
Learning should be supported psychologically

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Implications of Learning for Human
Capital Development
Key capabilities
Aligning learning goals to business goals
Measuring of business impact of learning
Movement of learning outside the company
Developing competencies for critical jobs
Integrating learning with other human resource
functions
Including classroom as well as e-learning

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 Designing and delivering leadership development
courses

Figure 2.1- The Strategic Training and

Development Process

Strategic Training & Metrics That

Business Training & Development Show Value
Strategy Development Activities of Training
Initiatives

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 Diversify the Learning Use Web-Based Training Learning
Portfolio Make Development Performance
Improve Customer Planning Mandatory Improvement
Service Develop Web Sites for Reduced Customer
Accelerate the Knowledge Sharing Complaints
Pace of Employee Increase Amount of Reduced Turnover
Learning Customer Service Employee Engagement
Capture and Share Training
Knowledge

The Strategic Training and Development

Process
Mission: Company's reason for existing
Vision: Is the picture of the future that the company
wants to achieve
Values: What the company stands for
SWOT analysis
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 Internal analysis of strengths and weaknesses
External analysis of opportunities and threats

External analysis: Examining the operating

environment to identify opportunities and threats

The Strategic Training and Development

Process
Internal analysis
Identifies the companys strength and weaknesses
Examines the available quantity and quality of financial,
physical, and human capital
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 Strategic choice: The strategy believed to be the
best alternative to achieve the company goals

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Figure 2.2- Formulating the Business
Strategy

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 External
Analysis

Opportunities
Threats

Goals Strategic Choice

Mission
Company
Why does the Objectives How will we
Company Exist? Compete?

Internal
Analysis

Strengths
Weaknesses

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Table 2.2- Possible Business Goals
Influenced by Training

Productivity
Reduced scrap and rework
Increased customer satisfaction
Reduced operational risks and accidents due to employee carelessness
Increased employee satisfaction and retention
Increased time and value-producing goods, such as increase in billable project time
hours
Better management decisions
Increased development of human capital
Succession planning needed for competitive advantage and growth.

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Table 2.3- Decisions a Company Must Make
About How to Compete to Reach its Goals

1. Where to compete?

In what markets (industries, products, etc.) will we compete?

2. How to compete?
On what outcome or differentiating characteristic will we compete?
Cost? Quality?
Reliability? Delivery? Innovativeness?
3. With what will we compete?
What resources will allow us to beat the competition? How will we
acquire, develop,
and deploy those resources to compete?

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The Strategic Training and Development
Process
Strategic training and development
initiatives: Learning-related actions that help to
achieve business strategy

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Table 2.4- Strategic Training and Development
Initiatives
and Their ImplicationsImplications

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Strategic Training and Use technology, such as the Internet, for training
Development Initiatives Facilitate informal learning
Diversify the Learning Provide more personalized learning opportunities
Portfolio Train customers, suppliers, and employees
Offer more learning opportunities to nonmanagerial employees
Expand Who Is Trained Quickly identify needs and provide a high-quality learning solution
Reduce the time to develop training programs
Accelerate the Pace of Facilitate access to learning resources on an as-needed basis
Employee Learning Ensure that employees have product and service knowledge
Ensure that employees have skills needed to interact with customers
Improve Customer Service Ensure that employees understand their roles and decision-making authority
Ensure that employees have opportunities to develop
Provide Development Ensure that employees understand career opportunities and personal growth
Opportunities and opportunities
Communicate with Employees Ensure that training and development addresses employees needs in current job as
well as growth opportunities
Capture and Share Knowledge Capture insight and information from knowledgeable employees
Organize and store information logically
Align Training and Provide methods to make information available (e.g., resource guides, websites)
Development with the Identify needed knowledge, skills, abilities, or competencies
Companys Direction Ensure that current training and development programs support the companys
strategic needs
Ensure that the Work Remove constraints to learning, such as lack of time, resources, and equipment
Environment Supports Learning Dedicate physical space to encourage teamwork, collaboration, creativity, and
and Transfer of Training knowledge sharing
Ensure that employees understand the importance of learning

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 Ensure that managers and peers are supportive of training, development, and learning

Table 2.5 - Questions to Ask to Develop

Strategic Training and Development
1drivers of the. What is the vision and mission of the company? Identify the
strategic Initiatives
business strategy.
2. What capabilities does the company need as a result of the business

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strategy and business environment
challenges?
3. What types of training and development will best attract, retain, and
develop the talent needed for success?
4. Which competencies are critical for company success and the
business strategy?
5. Does the company have a plan for making the link between training
and development and the business strategy understood by executives,
managers, and
employees or
customers?
6. Will the senior management team publicly support and champion
training and

development?
7. Does the company provide opportunities for training and developing not only
individuals but also teams?

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The Strategic Training and Development
Process
Metrics
Business-level outcomes chosen to measure the
overall value of training or learning
Strategic business related measures not linked to one
course or program
Balance scorecard Means of measurement for:
Overall company performance
Performance of departments or functions

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The Strategic Training and Development
Process (cont.)
Considers four perspectives
Customer
Internal innovation
Learning
Financial

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Organizational Characteristics That
Influence Training
Role of employees and managers
Employees- Responsible for quality of goods and
services
Managers must:
Manage individual and performance
Develop employees and encourage continuous learning
Plan and allocate resources
Coordinate activities and interdependent team
Facilitate decision making Create and maintain trust
Represent ones work unit
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Organizational Characteristics That
Influence Training
Top management support
The CEO is responsible for
Setting a clear direction for learning
Providing encouragement, resources and commitment for
strategic learning
Governing learning and reviewing objectives
Developing new learning programs for the company
Teaching program or providing online resources
Serving as role model for learning

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Organizational Characteristics That
Promoting the companies commitment to learning
Influence Training
Integration of business units
Training likely includes rotating employees between
jobs in different businesses
Global presence
Training helps prepare employees for temporary or
long-term overseas assignments
Business conditions

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Organizational Characteristics That
Impact the ability to find employees with necessary
skills, and retain current employees
Influence Training
Other HRM practices
Human resource management (HRM)
practices:
Activities related to:
Investments
Staffing
Performance management

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Organizational Characteristics That
Training
Compensation and benefits

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Organizational Characteristics That
Influence Training
Staffing strategy: Company's decisions regarding:
Where to find employees
How to select them
The desired mix of employee skills and statuses

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Organizational Characteristics That
Figure 2.4 - Implications of Staffing
Strategy for Training

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Organizational Characteristics That
Influence Training
Strategic value of Job and employee
uniqueness
Uniqueness: Extent to which employees are rare
and specialized and not highly available
Strategic value
Employee potential to improve company effectiveness and
efficiency
Results in four types of employees
Knowledge-based workers
Job-based employees
Contract employees

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 Alliance/partnerships

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Organizational Characteristics That
Influence Training
Human resource planning
Identification, analysis, forecasting, and planning of changes to
help meet changing business conditions

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Organizational Characteristics That
Influence Training
Extent of unionization
Joint union-management programs help employees
prepare for new jobs
Staff involvement in training and development
Effectiveness of the training program depends on the
level of involvement of:
Managers
Employees

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Organizational Characteristics That
Specialized development staff
Influence Training (cont.)
Staff involvement in training and development
If line managers are aware of what development
activity can achieve, they will be more willing to
become involved in it.
They will also become more involved in the training process if
they are rewarded for participating.

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Organizational Characteristics That
An emerging trend is that companies expect
employees to initiate the training process.

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Table 2.7 Implications of

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Business
Strategy for
Training

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Training Needs in Different Strategies
Internal growth strategy
Focuses on new market and product development,
innovation, and joint ventures
External growth strategy
Emphasizes acquiring vendors and suppliers or buying
businesses to expand into new markets
Disinvestment strategy: Emphasizes liquidation
and divestiture of businesses

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Models of Organizing the Training
Department
Centralized training
Training and development resources, and
professionals are housed in one location
Training investment and delivery methods decisions
are made from one department
Advantages- Helps integrate programs for developing
leaders and managing talent

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Figure 2.5- The Corporate University
Model

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Table 2.9- Features of Training Function
Organized by the BE Model
Strategic Direction

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Broadly disseminates a clearly articulated mission
Recognizes that its customer base is segmented
Provides customized solutions to its clients needs
Understands product life cycles
Organizes its offerings by competencies
Competes for internal customers
Product Design
Uses benchmarking and other innovative design
Implements strategies to develop products quickly
Involves suppliers strategically
Structural Versatility
Employs professionals who serve as product and classroom instructors, managers, and internal
consultants
Uses resources from many areas
Involves line managers in determining the direction of the departments offerings and content
Product Delivery
Offers a menu of learning options
Delivers training at the work site
Accountability for Results
Believes that individual employees must take responsibility for their personal growth
Provides follow-up on the job to ensure that learning takes place
Considers the manager the key player in supporting learning
Evaluates the strategic effects of training and its bottom-line results

Guarantees that training will improve performance

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Models of Organizing the Training
Department
The BE model with Centralized training
Allows the company to gain the benefits of centralized
training
Ensures that training content and delivery methods
that are business specific

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Figure 2.6- A Change Model

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Models of Organizing the Training
Department
Resistance to change: Managers and employees
unwillingness to change
Control: Managers and employees ability to obtain
and distribute valuable resources
Power: Ability to influence others
Task redefinition: Creating changes in managers
and employees roles and job responsibilities

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Table 2.10 Steps in a change process
Steps in a change process
Clarify the request for change

Make the vision clear

Design the solution

Communicate and market for buy- in

Choose and announce action as soon as
possible
Execute and create short term wins

Follow up , reevaluate and modify

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Marketing the Training and Creating A
Brand
Internal marketing-Making employees and
managers excited about training
Internal marketing tactics
Involve the target audience in developing the training
program
Demonstrate how a training program can be used to
solve specific business needs
Identify a champion who actively supports training
Listen and act on feedback received

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Marketing the Training and Creating A
Brand
Advertise on e-mail, on company websites, and in
employee break areas
Designate someone to interact between the training
designer and the business unit
Determine the financial gains top- level executives are
concerned with
Dont use jargon

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 Table 2.11- How to Build Training
Brand
Ask current customers of training, including managers who purchase or ask for
training and employees who participate in training what their perceptions are of
the brand. For example, what emotions describe how they feel about the training
brand? What words summarize their feelings? What conclusions have they made
about doing business with you? Answers to these questions provide information
regarding the strength of the training brand and if it is being perceived positively or
as intended.
Define how you want to be perceived by current and future customers.
Identify factors that influence your customers perceptions of the training function.
Review each of the factors to determine if it is supporting and communicating the
brand to your customers in a way that you intended.
Make changes so that each factor is supporting the brand.
Get customers feedback at each step of this process (define the brand, identify
factors, suggest changes, etc.).
When interacting with customers, create an experience that supports and
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identifies the brand.

Outsourcing Training
Outsourcing: Use of an outside company that
takes:
Complete responsibility and control of some or all
training or development activities including
Administration
Design
Delivery
Development

Business process outsourcing

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 Outsourcing of any business process, such as HRM,
production, or training

Outsourcing Training
Advantages of outsourcing training:
Cost savings
Time savings
Improvements in compliance with training mandates
Access best training practices
Reasons companies do not outsource their
training
Inability of outsourcing providers to meet company
needs
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 Desire to maintain control over all aspects of training
and development

Table 2.12- Questions to Ask When

Considering Outsourcing
1. What are the capabilities of your in-house training function? Does the staff

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 know enough that you can grow the training skills you need, or do you need
to hire training skills from the outside?
2. Can your in-house training function take on additional training
responsibilities?
3. Is training key to your companys strategy? Is it proprietary?
4. Does your company value its training organization?
5. Does the training content change rapidly?
6. Are outsourced trainers viewed as experts, or are they viewed with
cynicism?
7. Do you understand the strengths and weaknesses of your current training
programs?
8. Do you want to outsource the entire training function?
9. Are executive trying to minimize trainings impact on your company? Does
your company accept responsibility for building skills and talent?
10.Is a combination of internal and external training the best solution?

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