Developing Managerial Competence

Jonathan Winterton, Ruth Winterton

• Publisher: Routledge
• Year: 2002
• ISBN:
  9781134671403
• Edition: 1
• Topic: Business
• Subtopic: Business General
• Index: Business

Workplace training and education have increasingly been seen as pivotal factors in improving the abilities, skills and competitiveness of industry, and the aim of the Management Charter Initiative (MCI), was to improve managers' practical competency in line with this. Under the MCI, qualification was gained by proving managerial competence in work related tasks, rather than by studying for a theoretical, educational qualification such as an MBA or degree. This book provides a welcome and comprehensive analysis of the MCI within the context of modern management development. It emphasizes the benefits of linking management development with organizational strategy, and includes:

* up-to-date analysis of how management development can be measured
* the first comprehensive assessment of the impact of using Management Standards
* practical illustrations with sixteen in-depth case studies of contemporary organizations.This revealing book is endorsed by the MCI and includes a foreword by Professor Tom Cannon, whose leadership spearheaded and developed the MCI itself.

1 Introduction

This book represents a response to that perennial question of management development: what impact does it have on performance? Senior strategic managers want to know whether developing their management team will add value to the organization and, if so, whether one approach is better than another. Individual managers want to know whether the time they invest in development will pay off in terms of improving their own performance and, as a result, their careers.

The book also reflects the context in which the research has been undertaken. Changes in the vocational training system in the UK, especially the adoption of a competence-based approach and the creation of employer-led bodies to establish occupational standards, have affected management development along with other training and development, but what the effects have been is far from obvious. The recognition in White Papers from the European Commission (1994) that skills must be raised at all levels if European enterprises are to compete in global markets, has been reiterated in successive Competitiveness White Papers in the UK (DTI 1994; 1995). The need to build a ‘Learning Society’ (EC 1996) taken up with the movement for Lifelong Learning (Fryer 1997) has reinforced the argument that ‘investment in human capital will be the foundation of success in the twenty-first century’ (DfEE 1998).

These are times of change, fitting for the dawn of a new millennium, where learning and development appear to be at the top of the agenda and are assumed to be the key to future organizational success. It is difficult not to become enthused by the momentum of developments in this new era, and the new priority placed upon developing human potential should be wholeheartedly welcomed. However, important questions remain concerning who pays, what they get for their money and whether it lives up to the promises and expectations. This contribution to the debate offers a perspective on what can be done to improve the impact of training and development and provides an analysis of some of the benefits in terms of improvements in performance.

This chapter is organized into three sections dealing with:

1. the changing context of training and development;
2. background to the empirical study;
3. structure and overview of the book.

In the first section, the implications of changes in vocational training policy and organizational contexts for the development of managerial expertise are considered. Why is the workforce in the UK poorly trained in comparison to their major competitors? Can MD initiatives raise the level of qualifications of the managerial workforce? What new demands are being placed on managers and on MD by the profound organizational changes taking place?

The second section outlines the background to the empirical study which originated with a decision by the Employment Department to evaluate the benefits to organizations of adopting the Management Standards. A study group was established to consider existing evidence and to recommend an appropriate methodology for empirical investigation. This section provides a summary of the deliberations of the study group and elaborates the hypotheses established for testing.

The third section provides an overview of the remainder of the book, explaining the logic of the structure and the purposes of each chapter. The aim is to guide the reader to the most relevant sections for their needs and to identify how the chapters are related. Two themes in particular recur throughout the book: the relationship between the individual and the organization; and the impact on performance of training and development for managers. Other broader themes developed concern HRD strategies centred on skill and autonomy; the relationships between the processes underlying individual, group and organizational learning; and a framework for developing a learning organization.

The changing context of training and development

By 1980 there was abundant evidence that the UK workforce was inadequately trained in comparison with their major industrial competitors and that the level of training and development was insufficient to meet the skills needs of the 1990s. The UK economy was characterized by a ‘low skills equilibrium’ (Finegold and Soskice 1988), and the impact of skill deficiencies on productivity, and hence competitiveness, was widely recognized. As a result, during the 1980s the government radically overhauled the system of vocational education and training (VET) in the UK. First, employers were given a leading role in determining local training priorities and in establishing sector-level training arrangements. Second, a competence-based approach to VET was adopted in order to establish a nation-wide unified system of vocational qualifications. After describing these changes in the framework for vocational education and training, this section reviews the main policy debates concerning management education and training, and outlines the changing organizational context in which management development is taking place.

The framework for vocational education and training

The Employment Department White Paper, Employment for the 1990s (1989), proposed new arrangements to overcome the UK skills deficit, which entailed devolving responsibility for achieving an increase in the volume of vocational training and development to the local level, a strategy ‘to return the training problem to businesses’ (Ashton et al. 1989:150). Employer-led Training and Enterprise Councils (TECs) in England and Wales, and Local Enterprise Companies (LECs) in Scotland were created to give employers a major role in ensuring that training provision matches local labour market needs. Sector training bodies were also transformed into employer-led bodies with responsibility for determining training arrangements and establishing occupational standards. Recognizing the need to develop a national strategy for VET (IPM 1992) and to monitor its progress, National Targets for Education and Training were established from 1991 and since 1993 have been monitored by the National Advisory Council for Education and Training Targets (NACETT 1996).

Statutory Industry Training Boards (ITBs) had been established under the Industrial Training Act 1964 as tripartite sector bodies to promote training through raising funds from a statutory levy on employers and disbursing grants to meet the costs of those employers training employees in accordance with the overall policies and directives of the ITB. The involvement of the social partners was seen as necessary to establish an ‘industry view’ which would transcend the sectional interests of employers and trade unions (Rainbird 1990). Under the Employment and Training Act 1973, levy exemptions were allowed to companies that could demonstrate the quality of their own training programmes. From 1979, the approach altered under the Conservatives, with statutory, tripartite arrangements giving way to voluntary, employer-led Industry Training Organizations (ITOs) (Hyman 1992; Senker 1992). Following a review of their operation, the Employment and Training Act 1981 abolished seventeen of the twenty-four ITBs, and notice was given in 1990 that another five were to be abolished. There are now over 120 ITOs in existence and two ITBs (Construction and Engineering Construction).

The Manpower Services Commission (MSC), established in 1973 to create a coherent national policy for VET, published The New Training Initiative in 1981, putting the case for ‘new standards’ to define what people at work should be able to do. A year later, Hayes (1982) emphasized the importance of occupational competence in place of the traditional time-serving approach to VET. In 1986, a Review of Vocational Qualifications for the MSC and the Department of Education and Science recommended that new vocational qualifications should be centred on occupational competence, defined as ‘the ability to perform satisfactorily in an occupation or range of occupational tasks’. The review led to the development of a unified system of National Vocational Qualifications (NVQs) based on occupational standards developed by employer-led Industry Lead Bodies (ILBs), which may be the same organization as the ITO for that sector or a separate entity. The functions of ITOs and ILBs are being combined in new National Training Organizations (NTOs). Social partner involvement is crucial in the establishment of occupational standards, and even in the employer-led ITOs, trade union representatives play a major part in this process (Winterton and Winterton 1993b; 1994).

The removal of statutory union involvement in training at sector level focused union attention on the workplace level and the TUC proposed the formation of Workplace Training Committees (WTCs) with a statutory responsibility to develop a Training Plan for the enterprise (TUC 1989:11). In the absence of statutory rights, union negotiators were to put training on the bargaining agenda and to develop a joint approach with employers (TUC 1990; 1996b). The TUC response to the National Commission on Education reiterated the unions’ view that statutory underpinning of the training system was needed to give individuals a right to training (TUC 1992:31). Despite the marginalization of the institutions of collective bargaining since the early 1980s, the unions are keen to establish new collaborative arrangements to promote lifetime learning (TUC, 1993; 1994a; 1995a; 1995b). Future social partner involvement in validation and recognition of vocational qualifications is likely to focus on the workplace and to involve some forum like the WTC proposed by the TUC (Winterton and Winterton 1998).

The National Council for Vocational Qualifications (NCVQ) was established to oversee and monitor the NVQ process, accrediting the qualifications based on standards developed by ILBs. The qualifications are certificated by Awarding Bodies such as the City and Guilds of London Institute, the Royal Society of Arts and the Business and Technician Education Council, which had been the traditional qualifying bodies for vocational training before the introduction of NVQs. In Scodand, the Scottish Vocational Education Council (ScotVEC) was established to accredit the equivalent Scottish Vocational Qualifications (SVQs). In 1996 NCVQ merged with the Schools Curriculum and Assessment Authority (SCAA) to form the Qualifications and Curriculum Authority (QCA), while in Scotland, ScotVEC was re-named the Scottish Qualifications Authority (SQA).

An NVQ (which should be taken to imply SVQ also, henceforth) comprises units of competence, each of which can be separately achieved and certificated, and the emphasis is on the assessment of competence, not the route through which competence is achieved. The units of competence are broken down into elements of competence, each of which is related to performance criteria and range statements. The occupational standards are therefore specified as elements of competence, range statements and performance criteria. The NVQ, framework covers five levels, from the basic competences required to undertake elementary, routine and predictable work activities (level 1), through intermediate skills and competences required for supervisory and craft work (level 3), to competences involving the application of complex principles in unpredictable contexts, and associated with responsibility for substantial resources (level 5).

The assessment of NVQs is competence-based, involving judgement of how an individual performs in a work context against the criteria established in the standards, irrespective of whether the learning takes place via open or flexible learning, through off-the-job training or on the job. Workplace assessors are trained to the standards laid down by the Training and Development Lead Body, and the quality of their assessment is overlooked by internal and external verifiers (Fletcher 1991; Holyfield and Moloney 1996). Crediting competence, including validation of experiential learning and the recognition of tacit skills (Manwaring and Wood 1984), is an important part of shifting the emphasis away from traditional learning and has the potential of offering qualifications and opening up access to further training for groups of individuals who have been disadvantaged in traditional education, or made redundant through restructuring, but have developed competence through experience.

Acceptance of NVQs has been far from universal, as evidenced by the slow rate of take-up and extensive criticism of the approach (Toye and Vigor 1994). NCVQ and the TECs have, therefore, introduced various marketing initiatives to raise awareness, and have established quality control procedures to build commitment, with the objective of increasing the take-up of NVQs (Winterton and Winterton 1995). Some observers have criticized the competence-based approach for neglecting underpinning theory and knowledge.

Others have argued that crediting existing competences does not provide developmental opportunities for gaining new competences, a source of criticism from both employers and individuals in relation to the Accreditation of Prior Experiential Learning (APEL). While raising the level of qualification does not necessarily raise the skills and competences of individuals, the value of APEL as a means of recognizing and validating tacit knowledge should not be underestimated (Winterton and Winterton 1998). With the emphasis on the competence to perform defined tasks, more importance is attached to establishing the infrastructure necessary to facilitate access to assessment services (Crowley-Bainton and Wolf 1994).

Policy debates concerning management education and training

There is a broad consensus that the inadequacy of training and development in the UK equally applies to managers. Hussey (1988:65) claimed that the estimate that ‘most managers receive no training at all is by no means restricted to managers in the smaller companies’. The CBI (1989) noted that while 24 per cent of top UK managers are graduates, in France and Germany the percentage is more than twice that, and in Japan and the USA, 85 per cent of top managers have degree-level qualifications. In 1985, a staggering 54 per cent of management board members in the top 100 German companies were qualified to doctorate level (Randlesome 1990:48).

In 1987 two reports were produced as part of a review of management education and training, prompted by the recognition that the UK lagged behind other industrialized nations in terms of its formal management education, and the belief that developing managers would improve the competitive advantage of UK industries. The first report, The Making of Managers, by Handy et al. (1987), presented recommendations in the form of a 10-point agenda, which included the following:

• encouraging leading corporations to set a standard of five days off-the-job training per year per executive;
• furthering good practices in MD by encouraging larger corporations to act as trainers and consultants to suppliers.

Among the recommendations of the second report, The Making of British Managers, by Constable and McCormick (1987), were two of particular relevance to the present study:

• MD should be seen as a career-long process involving in-company training and external education;
• MD should be an integral part of strategic plans and, where appropriate, developmental activities should be associated with the development of strategic changes.

In 1992, the Institute of Management began a review of management education, training and development, and established two working parties investigating management development, chaired by Professor Tom Cannon and Dr F.Taylor, respectively. Their findings were published as Management Development to the Millennium (IoM 1994). Professor Cannon was subsequently appointed chief executive of the Management Charter Initiative (MCI). The remit of the Cannon Working Party was to explore the extent to which the medium-term goals established in the earlier Handy and Constable reports had been attained, and to make policy recommendations in the light of changes since 1987. The Taylor Working Party was established to recommend policies for the period 1994–2000, taking into account the key issues expected to affect organizations in that period in the view of practising managers.

Noting the renewed interest by the Department of Trade and Industry (DTI) in the contribution which management education can make to raising the competitiveness of British industry, the Cannon Report (1994) sought to establish the extent of MD activity in the UK. Constable and McCormick (1987) had estimated that there were 2.5–3 million managers in the UK, excluding those in very small enterprises (< 20 employees) and the self-employed. The Cannon Report (1994) calculated that the number had shrunk to 2–2.25 million due to the recession of the 1990s. With the addition of an estimated 2.9 million self-employed and 1.6 million managers of very small firms, the total managerial labour pool is between 6.5 and 6.75 million. Since ‘the majority of managers who can affect the performance of their organizations up to and beyond the millennium are already in post’ (Cannon 1994:21), their development is critical for raising the competitiveness of British industry.

Like the Handy and Constable reports, the Cannon Report noted the difficulty of obtaining an accurate estimate of the volume of MD in enterprises. The Constable Report found over half of UK companies made no provision for training managers, a problem which was especially pronounced in companies with 20–99 employees. Although no estimate was made of MD in firms of < 20 employees, the situation can be assumed to be even more serious given their lesser resources and even more acute job demands. According to MCI (1992), the situation improved slightly from 1987, with 80 per cent of larger organizations (> 500 employees) reporting that they had a formal management training programme, but still only 50 per cent of all organizations and half that proportion of smaller firms (< 100 employees) having similar arrangements.

The Taylor Report (1994) noted several ambiguities in the views of senior managers interviewed in the study undertaken for the Working Party by Ashridge Management Research Group. Managers expected in the remainder of the 1990s to consolidate the evolving practices they had already begun to implement, a philosophical approach which the authors felt inappropriate for millennium thinking:

In the chaotic and ambiguous world painted for us by the opinion formers, a search for clarity, certainty and solutions may be misguided. The challenge for organizations will lie in having to manage issues that are divergent, incongruent, and on occasions inherently contradictory at one and the same time.

(ibid.: 3)

The changing organizational context

The Ashridge survey confirmed the extent of organizational changes underway, and established that UK managers thought the biggest challenges for the year 2001 to be contracting out, de-layering and em...

Table of contents

• Cover Page
• Developing Managerial Competence
• Title Page
• Copyright Page
• Figures
• Tables
• Foreword
• Acknowledgements
• Abbreviations
• 1 Introduction
• 2 Management development
• 3 Methodological approach
• 4 Organizational strategy and management development
• 5 Human resource development strategies
• 6 Individual performance
• 7 Organizational performance
• 8 Business performance
• 9 Conclusions
• Case 1: Tin mine
• Case 2: Galvanizing factory
• Case 3: Electrical rental and retail company
• Case 4: Oil and gas exploration company
• Case 5: Energy technology service
• Case 6: Government agency
• Case 7: Specialist insurance
• Case 8: Charity organization
• Case 9: Magistrates’ Courts
• Case 10: Regional newspaper
• Case 11: Eastern NHS Trust
• Case 12: Aeroplane component manufacturer
• Case 13: Northern NHS Trust
• Case 14: Clothing manufacturer
• Case 15: Shoe factory
• Case 16: Southern NHS Trust
• References