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Developing Managers:A European PerspectiveDr Chris Mabey & Dr Matias RamirezExecutive SummaryA survey of management training & developmentin the United Kingdom, France, Germany,Spain, Denmark, Norway & RomaniaMay 2004Supported by

CopyrightChartered Management Institute ©First published 2004Chartered Management Institute2 Savoy Court, StrandLondon WC2R 0EZAll rights reserved. Except for the quotation of shortpassages for the purposes of criticism and review,no part of this publication may be reproduced, storedin a retrieval system, or transmitted, in any formor by any means, electronic, mechanical, photocopying,recording or otherwise, without prior permissionof the publisher.This book is sold subject to the conditionthat it shall not by way of trade or otherwise,be lent, re-sold, hired out, or otherwise circulatedwithout the publisher’s prior consent in any formof binding or cover other than that in which it ispublished and without a similar condition beingimposed on the subsequent purchaser.British Library Cataloguing in Publication DataA CIP catalogue record for this report is available fromthe British LibraryISBN 0-85946-331-1

IntroductionThis report addresses the question of how to create and sustain effectivemanagement from both a national and transnational perspective. The work buildson the methodology developed by the Chartered Management Institute’s researchseries “Achieving Management Excellence” that has been tracking trends inmanagement development in the UK since the 1980s.Birkbeck College, University of London led the project, with a team of partnersincluding the Institute and others from across seven European countries. It wascarried out with the support of the European Commission, the Leonardo da VinciCVTS Programme and the Department of Trade and Industry.ContextManagers are a highly influential employee category in terms of creating highperforming workplaces. Organisational capability at a management level isessential to improve competitiveness and the importance of managers isparticularly evident in the following respects:• Managers are typically the decision-makers with regard to seizingopportunities afforded by information and communication technologies• Managers are pivotal in how proactively and effectively change is managed• Managers are particularly instrumental in creating an organisational ethosof life-long learning for all groups of employees, especially thosetraditionally disadvantagedHowever, too often the training of managers is either neglected or an early casualtyof cost-cutting, because it is seen as a cost rather than an investment. Wheremanagement training is undertaken it is often non-strategic and piecemealand rarely evaluated.This report therefore seeks to answer two specific research questions:1) Does management development make a difference toorganisational performance?2) Do approaches to management development differ accordingto sector, size and country?In most European countries, research into vocational education and training isgenerally less advanced than research into academic and technical education.The same is true for the training of managers. The intention of this study was tobuild on previous EC studies by providing an in-depth analysis of the kinds ofmanagement training systems, policies and practices adopted in Europe andthe effects of these on organisational performance.Current data on what constitutes good workplace training practices in Europetends to focus on the quantity and types of training, but says little about how thequality and effects of this training and development. Although there have beenseveral country-specific studies into the impact of management education, thedevelopment of comparable studies across Europe remains largely absent.This research was driven by the need for a theoretically derived cross-nationalframework which guides training providers in the most effective traininginterventions in different sectoral and cultural settings.

Research MethodScopeThis report is based on a project researching management training anddevelopment systems in Europe which used a mixed-method approach(quantitative interviews and in-depth case studies).The first stage of the project involved 1400 telephone interviews in 700domestically-owned organisations across seven countries: Germany, Denmark,France, Spain, United Kingdom, Norway and Romania. Romania was chosenas an example of an emerging economy, typical of a country seeking future EUmembership. 100 interviews with HR managers and 100 line manager interviewswere conducted during 2002 in each country. From the 100 organisationsinterviewed in Stage 1, a number of firms were identified which claimed to beconducting a high amount of management development activity. Interviews wereconducted in 2003 with between three and six managers in each case organisation,the purpose being to explore in more depth their firsthand experience ofmanagement development from a participant perspective.SampleUsing local databases, contact was made by the research team with the HRmanager or equivalent, targeting only host-country owned companies and omittingpublic/not for profit organisations. Of the 1165 contacted, 701 agreed toparticipate, representing a response rate of 60 per cent (ranging from 50 per centin Germany to 78 per cent in the UK). The sector distribution across the totalsample was as follows:Manufacturing 34%Transport/distribution 21%Services (including financial 44%services, insurance, legal, businessand management consultancy)All countries broadly mirrored this breakdown, with the exception of Germany wherethe services sector was over represented at the expense of transport and distribution.Given the focus of the study, which was structured management developmentactivities (formal or informal) initiated by the employer, it was decided to onlyinclude companies with 20 staff or more. The eventual sample achieved wasas follows:20-99 Small 25%100-249 Medium 24%250-499 Medium 22%500+ Large 28%Smaller firms were over-represented in Spain and Romania. In contrast,organisations employing more than 500 staff were over-represented in thehighly industrialised German sample, and to a less extent in Norway.Interviews lasted between 20-30 minutes for HR managers and a little less for linemanagers. Questions were asked about industrial and management structure, theorganisation’s management development strategy and policy, its preferred methodsand practices for management and career development and mechanisms forevaluation. Line managers were interviewed about their firsthand experience oftraining and development, their views on the policies and practices adopted bytheir employer, together with an overall assessment of the effectiveness of thetraining provided.2

Key Findings and Conclusions1. Amount ofmanagementdevelopmentThere has been a pronounced increase in reported management developmentactivities (internal and external) across all countries since the early 1990s,with an annual increase from an average of 5.4 to 9.3 days per manager per year.On average Germany spends by far the most on developing its managers, followedby the Scandinavian countries. Despite its training levy system, France comesfourth in this ‘league table’. Spain, UK and Romania come below the Europeanmean of 2513 Euros per manager per year. However, it should be noted thereis a great deal of variation by firms within countries.The primary trigger for investing in management development is changesin the external environment, closely followed by business need in one form oranother, with HR strategy ranked as third most important across the sevencountries. For Spain, the situation is quite different: both HR managers and linemanagers perceive individual demand to be the pre-eminent trigger.Across all countries, more tactical, supply-driven factors still account for36 per cent of management development activity.Where management development is constrained, this is caused less by lack ofsupport/enthusiasm and more by practical/logistical difficulties; this is a consistentpicture for all countries, except Spain. The situation is particularly difficult inSpain where both logistics and attitudes appear to be weighing heavily againstsuch investment.2. Ways ofdevelopingmanagersHR and line managers were in agreement about the top three methods fordeveloping managers across all countries: internal skills training programmeswere the most favoured method across all countries, followed by external publiccourses, seminars and conferences; with mentoring/coaching in third place.Both Denmark and UK report a far higher use of qualifications-basedmanagement development than the average in Europe.As yet, little use is made of e-learning and it is ranked as the least favouredapproach by both HR and line managers.Spain and France place a heavy reliance on internal, and very little on external,approaches; the converse is true for Denmark (where public provision ofmanagement training by the Government is both extensive and highly subsidised),for Norway and the UK.3

3. Managementdevelopment policyand systemsThe majority of organisations (61 per cent) claim to have a specific budget forstaff training generally, the exceptions being Denmark where this is true foronly half the companies and Spain where the figure is only 25 per cent.HR managers in less than half of the organisations in the survey claimed to havea management development policy statement, although the proportionincreases to two-thirds for Norway and Romania.When it comes to the systems and practices in place to facilitate managementdevelopment (such as appraisals, career planning, fast-tracking and evaluation),Spain is the poor relation, with significantly less in the way of developmentpractices than all other countries, except France.Over half (56 per cent) of all companies use fast-track managementdevelopment for selected managers. This approach is particularly favoured inFrance (77 per cent), Norway (71 per cent) and Germany (67 per cent).Appraisals are widely used for managers in Europe (62 per cent), and of these,59 per cent claim that development needs are discussed at appraisals. The figuresfor France and the UK are far above the average.Line managers claim career planning takes place in 55 per cent of organisations(compared with HR managers who claim 60 per cent), but there is a wide variationfor two countries: Denmark (88 per cent) and the UK (31 per cent).4. Business andHR strategyWhile most organisations had a clear business strategy, it seems the HRcontribution to such strategies is moderate at best. There is reasonable supportfor the view that HR management delivers competitive advantage, UK and Francecome out lowest. Indeed, France and UK are generally more adrift from the othercountries, perhaps revealing a scepticism about the strategic contribution ofHR management.UK and French organisations are significantly less likely to adopt a strategicapproach to HR management: typically their HR specialists will have a lessstrategic role and the link between HR and business strategies will be lessevident than their European counterparts.5. Evaluation ofmanagementdevelopmentAround four in ten (41 per cent) of HR managers (compared with 37 per cent ofline managers), claim that management development activities are evaluatedin a systematic way.By far the most favoured method, accounting for more than a third of all mentionson average, was reference to other business measures such as productivityindices, sales targets, innovation, customer satisfaction, profit and turnover,balanced scorecard and other efficiency measures. Presumably such measureswere already in place in the organisation and evaluation was undertaken bylinking management development activity with improvement in these indices.Some way behind, but still mentioned by 17 per cent of respondents on averageacross all countries, was the use of structured and informal feedback.4

Here the measures had more of an HR (as against a straightforward business)focus. They included everything from formal mechanisms such as feedbackinterviews with participant managers, through to more anecdotal measures suchas “listening to the language to see if management development has made animpression”. For Norway, these informal ways of measuring the impact ofmanagement development were by far the most popular (33 per cent of mentions).Nearly a fifth (19 per cent) of replies across the seven countries on average,were to the effect that no evaluation was conducted at all. This was accentuatedin France and the UK where 32 per cent and 27 per cent of all mentions werein this category.6. Impact ofmanagementdevelopment onorganisationalperformanceCompanies were asked how successful their management developmentactivities were in developing managers to meet their needs and how positive theimpact of management development had been on the organisation over thepast three years. Although the differences are slight, France and the UK registerleast favourably on both measures; Norway and Romania are rated most highly onsuccess, and Germany and Romania most highly on impact.There is strong statistical evidence that management development leads tosuperior organisational performance across companies of all sizes, sectorsand national location. An impressive 16 per cent of variance in performance isexplained by three factors: the extent to which HR is integrated with businessstrategy, the degree to which the firm takes a thoughtful, long-term approach todeveloping managerial capability and the belief by line managers that theiremployer is taking management development seriously.This is not to say that management development ‘best-practices’(such as appraisal, fast-tracking, career planning) and greater managementdevelopment provision (the amount and a range of informal and formal methodsused by a firm to develop managers) are not desirable; rather that these factorswill not differentiate high from low performers.7. Managementdevelopment ethosManagement development ethos describes the degree to which organisations takea thoughtful, long-term and consistent approach to the creation of amanagement cadre. On this measure Spanish companies are again significantlyless likely to adopt this stance compared to all other countries except France,where the score is also low but not significantly different to the other countries.Firms in Germany, Romania and, to a lesser extent, the Scandinavian countries,are better at fostering their internal labour markets through promotion andretention of managers. The approach in Spain, and to some extent in France,appears to be much more instrumental. Firms in the UK are located somewherebetween these two extremes.5

Summary of country findingsCountry Type Key features Strong points ChallengesUnited Kingdom Generalist and reliant Comparatively weak Significant progress Lack of continuity in(UK) on externally career structures. since mid-1980s in national policy frameworks.accredited vocational Training objectives amount of Employer approach totraining or education clarified by use of development development often shortcompetencesand undertaken term, tokenistic andappraisalsnon-strategicFrance Decisive vocational Law requires firms to High standard of Training levy no guarantee(Fr) educational spend at least 1.2 Grands Ecole of strategic approach toinstitutions per cent of wage bill education with developmenton trainingorigins and closeFormal internalproximity tocareer structuresbusiness worldGermany In-house High proportion of Strong emphasis on Need to encourage(Ger) CEOs hold PhDs technical education greater flexibilityand individual loyalty and diversity ofEmphasis on formal to their employer managerial skillsrather than informalstructures fordevelopmentSpain Limited to large Large number of SMEs Has become Extending(Sp) corporations and family owned systematised in managementbusinesses has successful large development to therestricted growth of corporations broader SMEprofessionalcommunitymanagerial classDenmark Combines general, Experiential learning Open to new practices Weak formal or(Den) vocational and systematic attempts"on-the-job" training Emphasis on informal Public training to evaluate the impact ofmanagement institutions with management developmentdevelopment high status on performanceCombinesegalitarianism withentrepreneuralismNorway Emphasis on company Egalitarian and Widespread Combining its(Nor) and vocational training communitarian ethos expectation by egalitarianism with themanagers that they need to encourage greaterLimited individual will receive training individual entrepreneurship,rewards for and development innovation and riskperformance and positive view of managementits outcomesRomania External Content heavily Many managers Complementing external(Rom) influenced by external benefiting from EU training with indigenousorganisations and sponsored up-to-date training to build necessaryagencies know-how through competenciesmanagementdevelopment6

RecommendationsHR connectionshould be throughpartnership, not justa presence• Those representing HR and management development in their organisationsneed to be assertive in interpreting business priorities and in translating theseinto well resourced and well understood policies and practices.• HR specialists should also ensure that the improvements in motivation,performance and productivity are reported back at Board level to increasechances of further resourcing.• There is also a key role for HR departments to play in systematically evaluatingand following up on management development activities. This will helpunderline to line managers the organisational commitment to implementingnew practices.Create a managementethos as well asdeveloping systems• Management development systems need to be put in place but while thisinfrastructure (formal policies, specific budgets) is necessary, it is not sufficientto improve management performance.• For most firms the ingenuity, loyalty and commitment of their management teamis what gives them competitive edge. Organisations that take a thoughtful longtermapproach to the creation of a management cadre will perform better thanothers in their sector and be more productive.• Employers need to be proactive in cultivating managerial talent at all levels inthe organisation and in developing future potential rather than just forimmediate requirements.• Wherever possible introduce appropriate cultural changes to support theoutcome of management development activities, especially where the intendedresults are attitudinal.A shared andcredible agenda• Too often the views of those on the receiving end of HR initiatives are minimisedor overlooked. Those responsible for implementation should also work hard toensure that line managers understand the strategic intent of developmentundertaken, that promises are fulfiled and that fads and fashions are resisted.• Performance and productivity is enhanced when line managers see their seniormanagement team giving management development sustained priority and whenthey see its link to a consistent set of organisational skills and competencies.• There needs to be a sense of realism about how management development may,or may not, impact on personal advancement and career progression.7

AcknowledgementsThe findings of this report arise from a study funded by the European CommissionLeonardo da Vinci Procedure C, Ref RF 81505 and with additional support fromthe Department of Trade and Industry.This report has been prepared by Chris Mabey and Matias Ramirez. Chris Mabey isReader in Organisational Psychology at Birkbeck College, University of London,where he teaches Human Resource Management on the Masters programmes. Forthe past three years he has led an international network of researchers exploringmanagement development policy and practice in Europe. Matias Ramirez is alecturer at the Brunel School of Business and Management, Brunel University,where he teaches Management of Innovation and Technology and knowledgemanagement. His main interests are cross country comparisons of managementtraining and development and the relationship between work organisation andinnovation in firms.The Chartered Management Institute has been the dissemination partner throughoutthe two-year study and the authors would like to thank Gene Crozier, Petra Cook,Karen Charlesworth and Nick Parker, for their contribution to this project.The authors would particularly like to thank Dr Colin Gray, Open UniversityBusiness School, for his specialist contribution throughout the project on the SMEdimension; also to Jo Wilkie for help with the project in the early stages, to SusanMoseley and Jenny Kidd for assisting with the case studies in the UK; and to TimFinch-Lees for his editorial work on all 72 case studies.However, this report would not have been possible without the collaboration of allthe European partners involved in the “Developing Managers in Europe:A Report for the European Commission” including:France• Jonathan Winterton, Francoise Delamare Deist, Alain Klarsfeld, CelineLafoucriere - ESC TouloseGermany• Uwe Seebacher, Verena Pabst - USP Consulting, Munich, GermanySpain• Marta Solorzana - University of Distance Learning, MadridDenmark• Henrik Larson, Anne-Mette Hjalager - Copenhagen Business SchoolNorway• Paul Gooderham, Bjarne Espedal, Birthe Lange – Norwegian School ofEconomics and Business AdministrationRomania• Renaldo Nita, Camelia Petrescu, CODECS, Bucharest8

The leading organisation for professional managementAs the champion of management, the Chartered Management Institute shapes andsupports the managers of tomorrow. By sharing the latest insights and settingstandards in management development, we help to deliver results in a dynamic world.Encouraging management development,improving business performanceThe Institute offers a wide range of development programmes, qualifications,information resources, networking events and career guidance services to helpmanagers and organisations meet new challenges in a fast-changing environment.Shaping future management practiceWith in-depth research and regular policy surveys of its 74,000 individual membersand 480 corporate members, the Chartered Management Institute uses its deepunderstanding of the key issues to improve management performance.For more information contact:The Public Affairs Department, Chartered Management Institute2 Savoy Court, Strand, London WC2R 0EZTel: 020 7421 2704 Fax: 020 7497 0463email: research@managers.org.uk website: www.managers.org.ukFor further details about this project visit:www.managers.org.uk/euromanagementdevelopmentReach 11074 - 05/04Incorporated by Royal Charter Registered charity No. 1091035