Developing Managers in Europe

Advances in Developing Human Resources
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Developing Managers in Europe: Policies, Practices, and Impact

Christopher Mabey
Advances in Developing Human Resources 2004; 6; 404
DOI: 10.1177/1523422304268380
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Articles
10.1177/1523422304268380
Mabey / POLICIES, PRACTICES, AND IMPACT
November 2004
Developing Managers in Europe:

Policies, Practices, and Impact
Christopher Mabey
The problem and the solution. It is believed that management capability is a key to competitive performance at firm level
and that this feeds through to economic effectiveness at a
national level. Yet comparatively little is known about the policies, practices, and impact of management training and development activities undertaken by organizations in a cross-national
context. This article introduces a research project designed to
address these questions. Results are reported and compared for
seven European countries. Although practice and priorities differ widely, certain approaches to management development are
found to significantly improve organizational performance, irrespective of national setting.
Keywords:
management development; performance impact; Europe;

country differences
There is broad agreement that inadequate management and leadership continues to be a significant inhibitor of economic competitiveness. For example, the British government has recognized the need to generate a much
better evidence base on the impact of management and leadership skills and
actions on organizational effectiveness (Department for Education and
Skills/Department for Trade and Industry, 2002, p. 13) and has noted that, as
yet: There are no credible measures to prove links between management
training and development, good management and leadership and performance (Council for Excellence in Management and Leadership, 2002).
This sentiment is echoed more generally elsewhere in Europe, where the
globalization of the economy and the emergence of a new knowledge-based
economy is seen to be challenging the adaptability of European education
and training systems (European Commission, 2002).
The research reported in this issue was funded by the European Commission Leonardo da Vinci
Procedure C, Ref 81505. We are most grateful for their sponsorship.
Advances in Developing Human Resources Vol. 6, No. 4 November 2004 404-427
DOI: 10.1177/1523422304268380
Copyright 2004 Sage Publications
This issue addresses the question of how organizations can create and
sustain managerial competences, and how firms in Europe seek to achieve
this. The focus on managers is justified for the following reasons. First,
organizational capability at a management level is essential to improve
international competitiveness (Castanias & Helfat, 1991). Second, managers are typically the decision makers with regard to knowledge diffusion and
seizing opportunities afforded by information and communication technologies. Third, managers are pivotal in how proactively and effectively
change is managed (Pettigrew & Whipp, 1991). Finally, managers are particularly instrumental in creating an organizational ethos of learning for all
groups of employees (Martin, Beaumont, & Staines, 1998). Despite their
central role, the training of managers is frequently neglected or an early
casualty of budget reductions because it is seen as a cost rather than an
investment. Where management training is undertaken in Western countries
it is often nonstrategic and piecemeal (Storey, Edwards, & Sisson, 1998)
and rarely evaluated.
Some of the findings of a major research project funded by the European
Commission are reported in this and the following articles. Broadly, research
questions guiding this project are the following:
1. What management development is taking place in Europe?
2. Is management development making a difference to organizational
performance?
3. Do approaches to management development differ according to national
setting?
This article contains a review of what is currently known about management
development (MD) in Europe and provides a conceptual model for testing.
Then, having described the research design, sampling, and methods adopted by
the project, some of the key findings are reported with special reference to country differences.
MD in Europe
In most European countries, research into vocational education and
training is less advanced than research into general and higher level education, technical education, and training (Nyhan, 1998). Current data on what
constitutes good human resource development (HRD) practice in Europe is
inadequate in four respects. First, it is often descriptive and theoretical, so
although prior research in this area has indicated the quantity and types of
training undertaken, it has said little about the quality and effects of this
training and development (Larsen, 1994). Second, the few previous studies
that focused exclusively on training for managers have examined the development of competences (Winterton & Winterton, 1997) or the usage of
training procedures and practices (Bournois, Chauchat, & Rousillon,
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November 2004
1994); however, again an explanation of the effects of these on organization

performance is lacking. Third, the favored methodology has been broad surveys (Brewster & Hegewisch, 1994; Brewster, Mayrhofer, & Morley, 2004;
Centre for Training Policy Studies, 1994, 1997), which lack analytical
detail, or in-depth case studies (Storey et al., 1997), which make generalization of the findings problematic. Fourth, although there have been several
country-specific studies of MD (in the United Kingdom, Thomson, Mabey,
Storey, Gray, & Iles, 2001; in Ireland, Graham, Donoghue, Gray, & Mabey,
2000; in the Newly Independent States, TACIS (Technical Assistance to the
Commonwealth of Independent States)/European Training Foundation,
1997), the development of an integrated European model remains absent.
What is required is a theoretically derived cross-national framework that
guides training providers in the most effective training interventions in
different sectoral and cultural settings.
Evidence of Best Practice:

Developing a Model of MD
One of the hallmarks of a strategic approach to human resource management (HRM) is the link between human resources (HR) policies and business strategies. In recent years, there has been a concerted attempt, in
the United States and the United Kingdom, to demonstrate that investment
in a given bundle of HRM policies leads to business benefits. See Becker
and Huselid (1998) and Wood (1999) for reviews of this literature. A consistently influential feature in such studies, and a central element of the
resource-based view of HR, is the role of training and development. Despite
commonsense logic that carefully developing managers is good for business, it is not yet elaborated how such activity comes to have a positive
impact at the firm level. There are various ways of explaining the extent and
effectiveness of MD at a country, sector, or firm level. Some theorists look to
external factors, while others concentrate on internal decision pathways.
External Factors
Business systems theorists (Ferner, 2000; Whitley, 1992) argued that the
historical development of the institutions or structures of a country or
region, such as the distinctive role played by government in industry or capital markets, play a dominant role in shaping training and development
within organizations. This may be in the form of training levies (Noble,
1997), the legal and regulatory infrastructure at a national level (Ashton &
Felstead, 1995; Lane, 1989) or at a state level (Batt & Osterman, 1993).
Alternatively, the catalyst for training and development might be the labor
market dynamics (Sonnenfeld & Peiperl, 1988), other culturally specific
407
institutional factors such as educational systems, or government encouragement through programs and inducements (Winterton & Winterton, 1999) to
stimulate a more strategic approach to developing managers. Also influential from an institutional perspective are mimetic pressures to copy socalled best practice and the involvement of key decision makers in specific
social networks, such as professional associations, which help disseminate
ideas on MD (Martin et al., 1998). Certainly, any model of MD would need
to take account of external factors such as size of organization, financial
resources, and prevailing labor market patterns, with the specific pressures
they bring to the recruitment and retention of staff.
Internal Decision Pathways
However, other researchers have pointed to the role of human agency.
They maintain that the way an organization or, more accurately, key people
choose to interpret and respond to competitive pressures and the performance gaps they expose will play a more influential role in determining
priorities and policies. For example, in studying HRD systems, Pettigrew,
Hendry, and Sparrow (1988) took a social constructionist position to
emphasize the role of perceptions and enactment in shaping MD priorities
and policies.
With regard to priority given to MD, one of the few research-based studies is a survey in the United States of 22 leading firms (Siebert & Hall,
1995). Apart from two companies, 3M and Motorola, which conducted their
training of managers in an outwardly focused way and where business priorities were the trigger for development, a key finding was the following: An
admission on the part of the respondents that [this] link between business
strategy and executive development is especially weak (Siebert & Hall,
1995, p. 550). Among MD policies that have received attention is the extent
to which they are formalized and written (Garavan, 1991) because such
statements suggest a thoughtful rather than an ad hoc approach to developing managers. Also important is the effort expended in the diagnosis and
evaluation of such activities. Larsen (1994), reporting on a survey of 10
European countries, found a very diverse approach to training needs assessment with a heavy reliance on informal mechanisms. Similarly, most companies in all countries monitored the effectiveness of training via informal
feedback. There is, as yet, little empirical evidence of organizations systematically reviewing the business benefits deriving from MD activities in the
United Kingdom (Department for Education and Employment [DfEE],
1998). In the United States, attempts to quantify the outcomes of training
appear to be confined to a few leading exemplars such as Motorola and Sears
(Yeung & Berman, 1997), despite the recent developments in techniques to
measure outcome measures such as return on investment from training
(Noe, 1999).
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November 2004
Outcomes
Finally, any model of MD needs to, in some way, measure the extent of
training and development activity and its performance impact. A convenient
and conventional way of assessing MD activity is to measure the annual
number of training days (Huselid, 1995; Koch & McGrath, 1996). This measure, however, is a blunt indicator and needs to be supplemented with more
qualitative measures of the type of development undertaken, formal and
informal. To quantify the overall contribution of MD, outcome measures are
also required. Here a self-reported seven-item, benchmarked index of organization performance was used that, according to Delaney and Huselid
(1996), has been found to correlate positively (with moderate to strong
associations) with objective measures of firm performance (p. 954).
Rather than relying on a single respondent to provide this measure, we asked
HRD managers and corresponding line managers in each firm to rate their
firms performance compared to others in their sector, over the previous 3
years.
The current study is distinctive in several respects. First, it is informed by
an analytical model (Mabey, 2002; Thomson et al., 2001); this model takes
account of external and internal factors, as discussed above, and assesses the
impact of these on outcomes at firm level. Second, it combines detailed
quantitative and qualitative data to achieve breadth and depth in building an
explanatory picture. Third, interviews and case studies are undertaken in
seven countries to allow cross-national comparison of MD policies, practices, and impact. Fourth, it adopts a pluralist perspective: counterpointing
the views of HRD managers with one line manager in each organization
(and several other managers in the case studies) concerning their experience
of MD. This end-user perspective challenges the managerial assumptions of
much of the literature in this field and explicitly recognizes the contested
nature of management learning (Burgoyne & Jackson, 1997).
Method and Sample

Stage 1: Telephone Interviews
The results on which this and subsequent articles are based were collected as part of a larger project researching management training and development systems in Europe. In the first stage, 1,400 telephone interviews
were conducted with the HRD manager and a line manager in 700 domestically owned organizations. In an earlier study, Bournois and colleagues
(1994) examined how managers were trained in European firms according
to three criteria: (a) seniority of decision making, (b) training procedures,
and (c) career management planning. They identified five tentative typologies from 12 countries. Participating countries for the current study were
selected to represent these five typologies. In addition to Germany (Group
1), Denmark and France (Group 2), Spain (Group 3), United Kingdom
(Group 4), and Norway (Group 5), Romania was also chosen as an example
of an emerging European economy, typical of a country seeking future
membership of the European Community.
A stratified sampling frame provided a reasonable representation of
organizations by size, sector, and annual turnover, within an overall design
constraint of 100 firms per country. Using local databases, contact was
made by the research team with the HRD manager or equivalent, targeting
only host countryowned companies and omitting public and/or not-forprofit organizations. Each HRD manager was asked to identify managers in
his or her organization who might be willing to participate in the study.
Those that were unable or unwilling to do so were dropped from the sample.
This procedure was followed until each country reached its quota, yielding
matched-pair data for a total of 100 organizations. Of the 1,165 contacted,
701 agreed to participate, representing a response rate of 60% (ranging from
50% in Germany to 78% in the United Kingdom). The sector distribution
across the total sample was as follows: manufacturing (31%), transport and
distribution (21%), and the services sector, including financial and insurance companies as well as legal, business, and management consultancy
firms (44%). All countries broadly mirrored this breakdown, with the
exception of Germany where the services sector was overrepresented at the
expense of transport and distribution.
Given the focus of the current study, which was structured MD activities
(formal or informal) initiated by the employer, it was decided to include
only companies with 20 staff or more. The eventual sample achieved the
goal of being evenly spread across four size categories: 20 to 99 employees
(26%), 100 to 249 (23%), 250 to 499 (22%), and 500 or more (29%). As
might be anticipated, smaller firms were overrepresented in Spain and
Romania, and a relative scarcity of firms with 250 to 499 staff in the latter
also. In contrast, organizations employing more than 5,000 staff were
overrepresented in the highly industrialized German sample and to a less
extent in Norway.
The interview schedule was based on that used in prior U.K. studies
(Mabey, 2003; Mabey & Thomson, 2000). Every effort was made by the
research team to ensure dynamic equivalence of all terms, definitions, and
meanings in each of the seven country contexts. To this end, each country
interview schedule was back translated. Host country nationals in their
native language conducted the interviews, which were arranged in advance.
In most cases, these were conducted by telephone and, in some cases, faceto-face and lasted between 20 to 30 minutes for HRD managers and a little
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November 2004
less for line managers. Questions were asked about industrial and management structure, the organizations HR strategy and MD policy, its preferred
methods and practices for management, and career development and mechanisms for evaluation. Line managers were interviewed about their firsthand experience with training and development, their views on the policies
and practices adopted by their employer, together with an overall assessment of the effectiveness of the training provided for managers.
Stage 2: Case Studies
From the 100 organizations interviewed in Stage 1, in each country partners identified a number of firms that claimed to have a high amount of MD
activity. The HRD manager was approached, and interviews set up with between three and six managers in each case organization, the purpose being
to explore in more depth their firsthand experience with MD from a participant perspective. A semistructured interview protocol was designed, based
on the four frames of Bolman and Deal (1997). This innovative approach,
which is described in more detail elsewhere (Mabey, 2003), proved to be a
valuable catalytic device for prompting respondents to discuss their experiences in a more reflective and insightful manner than might otherwise have
been achieved.
In all, 70 case studies were conducted in the seven countries. Separate
country reports, authored by each partner and each comprising the 10 case
reports, together with an overall analysis of MD in their respective national
settings, provided a complementary source of data to those of the interviews. To obtain an overall picture of MD in Europe, some of the key findings arising from the Stage 1 data are presented.
MD Methods
To assess the preferred methods adopted by organizations for developing
managers, HRD and line managers were asked how much reliance their
organizations placed on seven different development activities, using a 5point scale (where 1 = not at all and 5 = to a great extent). The categories
provided were a mixture of formal and informal, on-the-job, and off-the-job
activities.
As depicted in Table 1, internal skills training programs were the most
favored method across all countries (average 3.6), followed by external public courses, seminars, and conferences (3.5). In both cases, German organizations use such methods most extensively (4.2 and 4.0, respectively).
Mentoring and coaching probably mean different things in different organizations; however, it is noteworthy to find this widely adopted as the next
most popular approach, followed by training connected to formal qualifica-

TABLE 1:
To What Extent Are Different Development Methods Used Across

Europe?
HRD Managers
Internal skills programs

External courses, seminars, or conferences
Mentoring or coaching
Formal qualifications
In-company job rotation
External assignments, placements, or
secondments
E-learning
Line Managers
Rating
Rank
Rating
Rank
3.6
3.5
2.9
2.8
2.5
1
2
3
4
5
3.4
3.1
2.8
2.6
2.3
1
2
3
4
5
1.9
1.9
6
6
1.9
1.8
6
7
Note:HRD = human resources development.Ratings on a 1 to 5 scale (where 1 = not at all and 5 = to

a great extent).
tions. The three methods most usually associated with on-the-job development (in-company job rotation, external placements or secondments, and elearning) were, on average, least used. Although it should be noted that
Romanian companies place a heavier reliance on mentoring and coaching
(3.8) and Denmark (3.2) and the United Kingdom (3.3) reported a far higher
use of qualifications-based development than the average. Given the
amount of discussion about the opportunities and benefits of e-learning, it is
perhaps surprising to find this method still has a relatively low profile in
companies across Europe, especially in France (1.5).
In just about all instances, line managers slightly underreported different
methods being used in their organizations compared with their HRD managers. This difference is invariably within two or three decimal points, however, and lends credence to the overall claims of MD activities being
undertaken.
A more revealing picture emerges when the types of development are factor analyzed and compared by country. Here the internal methods (i.e., skills
training programs, in-company job rotation, placements or secondments,
and mentoring or coaching) form the first cluster, and external methods (i.e.,
external courses and seminars, e-learning, and qualifications-based
courses) form the second. As already noted, Germany and, to some extent,
Romania use both clusters of development to a large extent. However, Spain
and France place heavy reliance on internal and very little on external
approaches. This may be because of lower availability of, and/or a lower
regard for, external sources of MD. The opposite holds true for Denmark
(where we know public provision of management training is extensive and
highly subsidized by the government), Norway, and the United Kingdom. In
the latter two countries, there has been a long tradition, to some extent influ-
411
412

TABLE 2:
November 2004
How Many Days Do European Managers Spend on Training per Year?

United
France Kingdom Denmark Spain
HRD manager
Line manager
1992
7
7
5
8
10
4
12
7
5
13
13
7
Germany Norway Average
7
8
5
8
7
6
9.3
8.8
5.4
Note: HRD = human resource development.
enced by the U.S. model, of external management training provision from

independent training consultancies and qualifications-based development
from business schools.
Amount of MD
The amount of management training undertaken by organizations in each
country was calculated by asking HRD managers and line managers to estimate the average number of days spent by an average manager on MD each
year. This is a blunt measure but is one used widely in surveys of training
activity and therefore allows comparison. It should also be noted that
respondents were asked to take account of all the methods, formal and informal, referred to above. The results show three country groupings (see Table
2). The lowest reported amounts are in France, United Kingdom, Germany,
and Norway. The middle grouping is Spain and Denmark. On its own, reporting extremely high amounts of training (37 days reported by HRD and
24 by line managers) is Romania. These figures are difficult to account for
and were omitted from the table. The Romanian respondent provided two
interpretations for these inflated figures: first, that any amount of training
no matter how brief or trivial, will be counted as a day; second, there is a persistent desire among Romanian firms to be seen as doing the right things.
Again, the high degree of congruence between the number of days reported
by HRD and line managers for each country lends some validity to the
amounts claimed. It should also be noted from Table 2 that these results
show a pronounced increase in training activity across all countries since the
early 1990s with an increase from an average of 5.4 to 9.3 days for each
manager per year (Brewster & Hegewisch, 1994).
Another indicator of the extent of MD activity is the amount of funds
allocated to training managers each year. The amount spent by companies in
different countries (per manager on average each year) varies considerably
around the European mean of 2,513 euros. On average, Germany spends by
far the most on MD (4,438 euros per manager per annum), followed by the
Scandinavian countries Denmark (3,387 euros) and Norway (2,374 euros).
Despite a statutory requirement to spend 1.5% of their payroll on training,

TABLE 3:
What Triggers Your Organization to Undertake Management

Development?
HRD Manager
(Avg. %)
Description of Factor
External changes: expansion, need to comply with government

standards, takeover, market changes, increased competition from
abroad, globalization strategy, improvement in economy, growth
strategy
Business needs: need to improve flexibility, retention, performance,
more challenging roles, need for skilled managers, change of internal
expertise
HRD strategy, goals and practices: need to add value and/or to create
cohesion, succession planning, organizational reviews, encourage
good communication, internal cohesion
Individual demand: promotion opportunities, demand for management
techniques, individual motivation, commission-based targets, career
progression, personal ambition
Internal changes: takeover by company with different culture,
restructuring, new HR manager, change of leadership, commitment
from top management, need to delegate responsibility
Supply driven: training programs available, external training consultants,
external training opportunities, coaching programs
Culture and work ethos: freedom to manage, internal respect
between employees, managers, customers, focus on cooperation,
better teamwork, allowing people to contribute ideas
23.4
18.7
16.0
14.7
11.6
8.0
7.4
Note: HRD = human resources development. Percentage of 1,465 methods mentioned averaged
across Europe.
French firms are fourth in this league table with an average spending of
2,674 euros. Spain, United Kingdom, and Romania come below the European mean. Two things should be noted about these figures. First, there is a
great deal of variation within countries, so there are very high-spending
companies and also low spenders in each country. Second, the amount spent
is naturally going to be influenced heavily by the costs associated with conducting management training (e.g., fees for courses, consultancy rates, and
the price of training materials), so one should not be surprised, therefore, to
find a great disparity between Germany and Romania for instance.
Triggers for Investing in MD
Derived from open-ended questions, Table 3 summarizes the factors triggering MD mentioned most frequently across the seven countries, together
with a selection of illustrative comments. Naturally these factors are not
mutually exclusive and will influence each other; however the table shows
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November 2004
that HRD managers believe the primary reasons for investing in MD are
primarily driven by the external environment; this supports the conclusion
of earlier research conducted in the United Kingdom (Pettigrew et al.,
1988). This is closely followed by business need in one form or another
the need to be more flexible, more skilled, more customer-focused, more
efficientand MD is seen as a way of meeting these business requirements.
It might be surmised that this, in turn, leads to the prioritization of HRD
strategy, ranked as third most important across the seven countries. Here,
the management capabilities necessary to fulfill business goals are specified, appraised, and encouraged, usually in support of some firm-specific
HRD goals. The next three factors are more tactical and suggestive of
shorter term and/or ad hoc approaches to MD, driven by individual demand,
internal changes, and what is available in terms of courses and programs. It
is perhaps encouraging that these have less prominence than the three more
strategically focused triggers; however, collectively they still account for
why 35% of MD activity is initiated. Finally, a significant minority makes a
strong link between MD and the desired culture of the organization.
The percentages allocated to the different factors and the resulting ranking is remarkably similar for HRD and line managers. However, the overall
figures do mask some dramatic country differences. For example, unlike all
the other countries, the United Kingdom and Denmark ranked HRD strategy
as the prevailing factor stimulating MD, with external changes relegated to
third and fifth place, respectively. Here, it would seem, there is a strong
rationale supporting the proactive role of HRD. External demands have a
place; however, more important is the way these have been interpreted and
used to shape HRD goals and practices. This is the mirror image of France
and Romania, where firms rank external changes as easily the most influential factor, with HRD strategy ranked as a lowly fifth-place factor. For Spain,
the situation is quite different again: HRD managers and line managers perceive individual demand to be the preeminent trigger. The primary focus
here, it seems, is for MD is to equip managers to deal with greater responsibilities and to advance their careers. Finally, the high emphasis in Romania
on external changes driving MD is probably indicative of the present economic and political situation in a country, which is making a rapid transition
to a market economy from a period of communist dependency.
Evaluation of MD
To determine the favored methods for evaluation, HRD managers were
asked an open question How do you go about measuring the impact of management development? By far, the most favored method, accounting for
more than one third of all methods mentioned, was reference to other business measures. Among those referred to were productivity indices, sales
targets, innovation, customer satisfaction, profit and turnover, balanced

scorecard, and other efficiency measures. Presumably such measures were
already in place in the organization and evaluation was undertaken by linking MD activity with improvement in these indices. This came out as the
highest or second highest ranked method for all countries and was particularly pronounced for Spanish companies. Some way behind, but still mentioned by 16.9% of respondents on average across all countries, was the use
of structured and informal feedback. Here the measures had more of an HR,
as opposed to a straightforward business, focus and included everything
from formal mechanisms such as feedback interviews with participant managers through to more anecdotal measures such as listening to the language
to see if MD has made an impression. For Norway, these ways of measuring
the impact of MD were, by far, the most popular (33.2% of those mentioned). Assessing individual performance, usually by appraisal, was the
next most mentioned means of evaluation, although less often used in
France as compared to other countries. This was followed by another HRfocused measure that ranked fourth, that of career development and succession planning. Here the organization was obviously expecting MD activities
to improve the pool of managerial talent and equip the organization for the
future. The extent to which the company successfully achieves this is a
perceived measure of the effectiveness of its MD. France was again out of
line here, with no mention of this kind of evaluation.
Three things are noteworthy about this analysis. First is the high prominence given to so-called hard business measures when evaluating MD activities and the relatively low percentage indicating the use of more HRfocused methods where the more immediate and attributable impact of MD
activities might be anticipated to occur. Second, only 4.9% of those methods
mentioned on average referred to more standard textbook evaluation methods such as measuring course effectiveness, conducting pre- and postevent
questionnaires, and course evaluations. It appears that these approaches,
which are actually more concerned with internal validation, have little currency in the organizations in this sample, either because they are felt to be
inappropriate for training undertaken for managers and/or the results they
produce are regarded as lacking value. Third, it should be noted that 18.6%
of all methods mentionednearly one fifth on average across the seven
countrieswere to the effect that no evaluation was conducted at all. This
was accentuated in France and the United Kingdom where 32.4% and 27.3%
of all reports were in this category.
Impact on Organizational Performance

First, HRD and line managers were asked to rate how their organization
had been performing over the previous 3 years as compared to other compet-
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416

TABLE 4:
November 2004
How Do You Rate Your Firms Organizational Performance, Success, and

Impact of Management Development?
United
France Kingdom
Organizational
performance
HRD
Line manager
Success in
meeting MD
objectives
HRD
Line manager
MD impact on
organization
HRD
Line manager
Denmark
Spain Germany Norway Romania
3.5
3.4
3.8
3.6
3.9
3.8
3.9
3.8
3.7
3.8
3.9
3.8
3.8
3.8
3.5
3.2
3.4
3.2
3.5
3.1
3.7
3.3
3.6
3.3
3.9
3.2
4.0
4.2
3.3
3.1
3.5
3.5
3.6
3.4
3.7
3.4
4.1
3.7
3.8
3.7
4.2
4.2
Note: HRD = human resources development; MD = management development. Rating on a 5-point

scale (where 1 = not at all and 5 = to a great extent).
itors in their sector. The seven-item index covered the development and
quality of their products and services, their ability to recruit and retain
essential staff, and the quality of relations between managers and employees, and between employees generally (Delaney & Huselid, 1996). Table 4
shows that the organizations in the sample saw themselves positively on this
index, which was calculated from the means scores across the seven items.
All HRD managers, except those in France, rated themselves between 3.7
and 3.9 on the 5-point scale (where 1 = very much worse than competitors,
and 5 = very much better). Line manager scores tended to corroborate this
optimism with scores between 3.6 and 3.8. Again, French line managers,
with an average rating of 3.4, were slightly less ebullient. Having established that, generally speaking, the firms in the sample saw themselves as
among the high performers in Europe, two measures were taken to assess the
contribution of MD (on 5-point scales from strongly disagree to strongly
agree). The first focused on the effectiveness of training: The organizations current MD activities are successful in developing the kind of managers that meet our needs. The second concerned the organizational effects of this: Over the last 3 years MD has had a positive impact in my
organization.
A number of observations can be made about these results. They are
again largely positive with only shades of difference between countries.
Although the differences are slight, France and the United Kingdom registered least favorably on both measures; Norway and Romania are rated most
highly on success, and Germany and Romania most highly on impact.

Although HRD managers were slightly more likely to score positively, line
manager ratings were fairly close (within three or four decimal points except line managers in Norway who rate success far lower than HRD managers). Again, the notion that HRD managers are making exaggerated claims
can be dispelled.
Impact is rated more positively than success for all countries, suggesting
that even if there is room for improvement in the way MD is operating, the
organizational benefits are still noticeable. The only exception is France
where MD is seen as reasonably effective in creating management capability; however, HRD and line managers saw this as less likely to have organizational benefits than in other countries. This ties in with earlier findings
that show relatively poor strategic integration between MD and organizational objectives for France.
Overall, the firms in this European sample saw themselves as performing
better than their sector competitors, and it would appear that at least some of
this superior performance can be attributed to efforts made in the arena of
management training and development.
MD and Firm Performance

The data reported so far show how different countries compare on a number of MD characteristics. This analysis is taken further by creating a number of constructs, which combine items from the interviews. This procedure
is more reliable than relying on single items.
There are certain elements that need to be in place to facilitate the training
of managers, processes that allow the organization to diagnose, design, and
deliver training and development in a systematic manner. The goal was to
discover how sophisticated these MD systems were and the strategic role of
HR and the attitudinal approach to MD taken by companies. To ascertain
this information the interviews with HRD managers were used because
these are areas for which they have direct operational responsibility. Three
constructs were created.
MD Systems incorporates (a) having an established MD policy, (b) conducting appraisals at which development needs are discussed, (c) the use of
career planning and fast-track programs, and (d) the systematic evaluation
of management training ( = .67).
MD Ethos comprises the extent to which the organization (a) takes
responsibility for management training and development and (b) relies on
internal promotion and expects to retain managers for 5 years or more. It
also measures the long-term development of managers, an emphasis on
developing potential, and whether managers are developed against a specific set of skills and competencies ( = .69).
417
418
November 2004
HR Strategy provides the context within which MD is undertaken. This

construct was derived from the average of two items: (a) the degree to which
HR is linked to business strategy and (b) the degree to which HR plays an
active role in formulating business strategy ( = .75).
It was considered that line managers were better placed than HRD managers to report on the output of MD policies and practice in their organization because their perceptions are not colored by any vested interests.
The following two constructs were created utilizing only line manager
responses.
MD Provision incorporates two items: (a) the average number of days per
year spent by managers on training and (b) the range of different methods
typically utilized to develop managers from a list including internal skills
training, external courses and seminars, in-company job rotation, external
placements, mentoring and coaching, e-learning, and formal qualifications
( = .60).
Perceived Importance is a multifaceted measure, tapping the degree to
which line managers believe the MD in their organization is credible, influential, and the priority given to MD, whether it reflects business priorities,
and whether it is linked to an organizationally defined set of skills and competencies ( = .74).
How do different countries compare on these five key constructs? Overall
statistical significance of differences in mean scores between countries (p <
.05) was tested using one-way ANOVA (Table 5). Post hoc testing (StudentNewman-Keuls) revealed that these significant differences were primarily
attributable to the following between-country comparisons. On all factors
apart from MD systems, Romanian organizations reported significantly
higher scores than all other countries in the sample. This once again confirms the inflation effect that was consistently encountered. For whatever
reason, HRD and line managers in Romanian organizations reported so positively that comparisons with their counterparts in other countries have to be
treated very cautiously. Because of this, Romania is left aside as a special
case. Apart from this anomalous set of scores, some interesting patterns
emerge.
First, French organizations are significantly less likely to adopt a strategic approach to HR. Typically their HR specialists will have a less strategic
role, and the link between HR and business strategies will be less evident
than their European counterparts. When it comes to the policies and practices in place to facilitate MD systems (including things such as appraisals,
career planning, fast tracking, and evaluation mechanisms), Spain is the
poor relation, with significantly less in the way of MD practices than all
other countries, except France. The same picture is true of MD ethos. This
describes the degree to which organizations take a thoughtful, long-term,
and consistent approach to the creation of a management cadre. Spanish
419
Overall
Mean
3.8 (.7)
3.5 (.5)
.26 (.6)
3.3 (.9)
.13 (.6)
Spain
pa
3.4 (.9) 17.57 > .005

3.8 (.6) 15.11 > .005
.07 (.6) 4.57 > .005
3.2 (.9) 11.29 > .005
.06 (.6) 6.56 > .005
United
Kingdom
ANOVA
Outcome
Note: HRD = human resource development; HR = human resources.

a.Significance of F values tested with df = 6,559 in all instances.Scores calculated by averaging across items using original coding where 1 (strongly disagree) and
5 (strongly agree).Because of response format differences,coding was converted to standardized (z) score format for Items 3 & 5 before averaging across items
was undertaken. This table includes only cases with complete data sets across variables defining construct scores (N = 566).
3.8 (1.0) 4.4 (.8)

4.0 (.6) 4.3 (.5)
.15(.7)
.15 (.7)
3.6 (1.0) 4.1 (.8)
.13 (.6) .34 (.6)
France Germany Norway Romania
3.5 (1.0) 2.9 (1.0) 3.5 (1.1)

3.8 (.7) 3.7 (.7) 3.9 (.6)
.13 (.7) .10 (.6) .11 (.6)
3.2 (1.0) 3.1 (.8) 3.5 (.8)
.18 (.7) .02 (.5) .08 (.6)
Denmark
Country Mean
(SD)
Breakdown of Construct Means and Standard Deviations by Country
1. HR integration (HRD managers) 3.6 (1.0)

2. Ethos (HRD managers)
3.9 (.6)
3. Systems (HRD managers)
.03 (.7)
4. Importance (Line managers)
3.4 (.9)
5. Provision (Line managers)
.02 (.6)
Construct
TABLE 5:
420
November 2004
companies are again significantly less likely to be adopting this stance compared to all other countries except France, where the score is also low but not
significantly discrepant to the other countries. The line manager views of
MD in their organizations do not differ significantly across countries, either
with regard to the strategic importance it is accorded or the amount and
diversity of methods used to provide it.
Table 6 shows the results of a multivariate regression analysis that provides an overall summary of the degree to which different variables or combination of variables, entered in four sequential steps, explain variance in
organization performance. The R2 statistic measuring the effect of the four
control variables (size, sector, growth, and country) on the variance in organizational performance is .1157 (or 11.5%). At Step 2, a single variable is
added: that which measures the extent to which HR is integrated with business strategy. It can be seen that this improves the overall variance (R2) to
16.5%. When the independent variables are added, the factors relating to
MD over which the organization is able to exercise discretion increase to
27.1%. Finally, it can be noted that the addition of country interaction
effects as a fourth step adds little, improving the overall explanation of
variance by just 3%.
The bottom section of Table 7 shows these effects more closely. When
interpreting the country coefficients it is important to remember that the
United Kingdom is the reference category. The regression constant may be
interpreted as the predicted value on organizational performance for U.K.
firms when the remaining regressors are set to zero. The coefficients for
Germany, Norway, and Spain are not statistically significant indicating that
German, Norwegian, and Spanish firms resemble U.K. firms.
With respect to organizational performance, controlling for sector, firm
size, turnover, as well as the various discretionary variables, the coefficient
for France is negative and statistically significant. This indicates that French
firms have a weaker perception, possibly a more cynical view, of their organizational performance than U.K. firms. The opposite is the case for Danish
firms.
Sector indicates an insignificant effect for manufacturing in relation to
organizational performance when measured against services, but a significantly negative effect for distribution and transport firms. The effect of firm
size is statistically significant but negative implying that the smaller the
firm, the better its reported organizational performance. This is the opposite
of what was expected. A possible explanation is that despite their economies
of scale, managers in larger companies find it more difficult than those in
their smaller counterparts to identify specific performance improvements.
Finally, growth has a positive effect on organizational performance;
however, this is not statistically significant.
421
1.
2.
3.
4.
Control variables
Above + HR integration
Above + key constructs
Above + interaction terms
.34
.41
.52
.55
11.5
16.5
27.1
30.2
R2
9.9
14.8
25.0
25.1
R2adj
7.09
9.65
12.85
5.91
9,489
10,488
14,484
34,464
df
< .01
< .01
< .01
< .01
5.0
10.6
3.1
R2cha
29.05
17.59
1.04
Fcha
df
1,488
4,484
20,464
Determinants of Organizational Performance: Overall Statistics for Moderated Multiple Regression (MMR)
Step (Variables Entered)
TABLE 6:
< .01
< .01
.42
422

TABLE 7:
November 2004
Determinants of Organizational Performance: Detailed Results for Step 3
Predictor
Dummy DK
Dummy FR
Dummy GE
Dummy NO
Dummy SP
Dummy Manufacturing
Dummy Distribution
Size
Growth
HR integration
Ethos
Systems
Importance
Provision
Constant
.10
.26
.04
.12
.96
.01
.10
.06
.12
.30
.31
.09
.32
.16
.12
.16
.04
.07
.06
.01
.09
.07
.08
.05
.15
.01
.10
.04
2.65
.11
.14
.04
.06
.08
.01
.09
.14
.08
.11
.23
.03
.21
.06
< .01
< .05
.45
.20
.11
.76
.05
< .01
< .05
< .05
< .01
.53
< .01
.17
< .01
Note: HR = human resources. This table is based on only cases with complete data sets across variables used to define construct scores but excluding Romanian organizations (N = 499).
The analysis indicates that more than one half of the explanation of variance in performance occurs at Steps 2 and 3, and that this is due to three variables: HR Strategy, MD Ethos, and Perceived Importance. From this one can
conclude that some of the impact on performance is derived directly from
attempts to integrate HR with an organizations business strategy and the
degree to which HR specialists play an active role in formulating that strategy (p > .05). However, the highly significant relationship between MD
Ethos and Perceived Importance with Performance (p > .05) suggests that
there is much value to be gained by taking a thoughtful, long-term approach
to developing managerial capability and for this to be communicated, such
that it becomes self-evident, to line managers. In contrast, the regression
analysis indicates that MD Systems and Provision do not have a significant
impact on organizational performance. This is further evidence that superior organizational performance is to be derived less from the extent of practices and volume of activities (which in and of themselves say little about
quality), and more from the creation of a proactive stance as expressed
through a strategic MD focus. This is not to say that MD best practices and
greater MD provision (amount and a range of informal and formal methods
to develop managers) are not desirable; rather that these factors will not differentiate high from low performers.
Conclusion
How do the results reported in this article help answer the three research
questions? What MD is taking place in Europe, is it making a difference to
organizational performance and third, do approaches to MD differ according to national setting?
It appears that a good deal more MD is happening across all countries (as
measured in average training days per year) than a decade previously, and
that the preferred methods are internal skills programs and external courses,
followed by mentoring and coaching. It is encouraging to note that much of
this MD investment is externally and strategically driven, suggesting a more
coherent rather than piecemeal approach. This observation is supported by a
preference on the part of many organizations to use systematic and structured tools to evaluate MD activity. These findings paint an aggregate
picture for Europe but mask country differences. For example, it is noteworthy to report that France is significantly less likely to adopt a strategic
approach to HR; according to HRD managers, France and Spain are least
likely to use fast-track development. Nearly 90% in Denmark and the
United Kingdom report the use of appraisal compared to just 38% in Spain,
and career planning is far more widespread in Denmark (77%) and Germany
(81%) than elsewhere in Europe. Finally, firms in France and Spain are least
likely to take a thoughtful, consistent, and long-term approach to the development of their managers.
However, when looking at the relationship between elements of MD and
firm performance, the results appear to apply irrespective of country effects.
If MD is to have a demonstrable benefit for the organization, two factors
emerge as important. First is a long-term, strategic, internal labor-market
approach to cultivating management talent, which is consistent over time.
Second is the corroboration of this by line managers, expressed by a belief
that top management in their organization is walking the talk with regard
to MD. This supports the results of other studies. Tannenbaum (1997) found
the quality and appropriateness of training to be more important than the
amount; Purcell, Kinnie, Hutchinson, Rayton, and Swart (2003) identified
employee commitment and motivation to be important mediators between
people practices, including training, and the engagement of discretionary
behaviors to help the firm be successful; and Guest (1997) and Truss (2001)
are among those reporting that line manager perceptions are highly influential in determining HR outcomes.
This is not the whole story. The findings discussed above are based
entirely on the Stage 1 data. Although the sample is large, views from HRD
and line managers were solicited, and the telephone interviews allowed a
fairly full conversation with each respondent, a number of important issues
remain unexplored. To what extent do national business systems and institutions affect labor markets generally and MD systems specifically? This is
423
424
November 2004
the concern of the following article in this issue by Ramirez (2004). Another
important prism through which to view MD is that of organization size, and
this has been largely lacking in the analysis so far. Grays (2004) article
deals with this in some depth. Then there remains the question of what MD
is seen to encompass and how it actually occurs in organizations. The gap
between espoused intent and actual practice is probably as wide in relation
to MD as it is in any arena of HR, and the article by Espedal (2004) addresses
this gap head on. Finally, Larsen (2004) questions many of the shibboleths
and definitions surrounding the term management development and calls for
a wider interpretation of how and why development occurs in organizations.
In each article, the authors, each of whom are partners in the research project, use some aspect of the European project data to explore their chosen
issues. The overall outcome is revealing and provides a number of fascinating insights; however it is untidy and far from definitive, more a collage of
different textured and fragmented materials than a complete picture. In
Mabeys article, an attempt is made to summarize what the collective contributions tell us about the theory and practice of MD in Europe and how the
profession and practice of HR might benefit from the findings.
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Christopher Mabey is reader in human resource management in the Department of
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Advances in Developing Human Resources, 6(4), 404-427
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