CHAPTER 11

Management Development

CHAPTER OBJECTIVES

After reading this chapter, you should be able to:

1. Understand the significance of management development
2. List the steps in a management development process
3. Explain the methods of management development
4. Evaluate the needs and benefits of management development
5. Discuss the role of management succession planning

Wipro Technologies is an India-based IT multinational company that provides IT solutions and services to several renowned global clients. It has the rare distinction of being the first level-five-PCMM (People Capability Maturity Model) and SEI CMM (Software Engineering Institute’s Capability Maturity Model) level-five–certified IT services organization in the world. Wipro’s HR philosophy revolves around three core doctrines, namely, “intensity to win”, “act with sensitivity”, and “unyielding integrity”. In fact, this company has won several awards for its HR practices. For instance, it has won the prestigious The Midday and DAKS Awards for HR Excellence for its HR practices in technological recruitment and staffing practices. Similarly, it became the first Indian company to win the prestigious Dale Carnegie Global Leadership Award for 2007.

Wipro has several unique leadership development practices. It has a unique leadership life-cycle programme for developing the competencies of different categories of managers. It offers the entry-level programme (ELP) for junior managers, the new leaders’ programme (NLP) for employees in the HR field with managerial potential, the Wipro leaders’ programme (WLP) meant primarily for middle-level managers, the business leaders’ programme (BLP) meant for senior managers with overall business responsibility, and the strategic leaders’ programme (SLP) for top-level managers.

As a first step in the leadership development process, Wipro undertakes a 360-degree survey for recognizing and enhancing the leadership competencies of its managers. Based on this survey, a personal development plan (PDP) is prepared for each manager. Then, these managers are brought under the appropriate development programme in the leadership life cycle.

The Wipro leadership initiative vividly illustrates the relevance of the innovative management development programmes for the success of an organization. In this context, we shall now discuss the different dimensions of management development programmes in organizations.

Introduction

The future of an organization rests firmly on the competencies and dynamism of its managerial people. The managerial job often involves decision making that calls for knowledge of the latest developments in the related fields and excellent analytical skills. Managers cannot afford to adopt a trial-and-error approach while making their choices in decision-making. This is because their decisions may have a profound influence on the survival and growth of the organization. Thus, the sustained development of the capabilities of the managers is essential for implementing the present and future strategies of the business. In this regard, management development programmes can help organizations develop the knowledge, skills and abilities (KSA) of their managers so that they become better equipped for the existing and future managerial positions. As such, management development is a process of upgrading the competencies of the managers through relevant learning experiences.

However, management development is a long-term development process as compared to workers’ training. It focuses more on developing the general capabilities of the existing and future managers than on solving their small but recurring skill deficits in performance. An organization can undertake a management development programme for various purposes like enhancing the managers’ job performance, executing management succession plans, and offering opportunities for the individuals’ career planning and progress. Management development programmes may take the forms of university courses and degrees and job rotations, especially for the lower managerial ranks.¹ They may also involve attending workshops or seminars by managers on domains like strategic management, motivation, time management, stress reduction strategies, problem-solving abilities, management theories, leadership styles and human relations.²

The end result of any management development programme is the enrichment of the competencies of the managers for successfully accomplishing the objectives of the organization and the individual. The definitions in Box 11.1 highlight these facts.

We may define management development as a long-term process by which the managers’ conceptual knowledge and competencies are developed to make them more suitable for the present and future responsibilities.

Significance of Management Development

Managers often operate in an uncertain environment as managerial positions involve taking decisions for an uncertain future. When the decisions fail, the manager has to bear the responsibility for such a failure and it may even result in losing one’s position. Globalization of business operations, technological developments, and intensified competition have further increased the risk factors for the managers. Thus, there is a growing need for all-round development of the managerial personnel. In fact, an organization requires management development programmes for the following purposes:

• to make certain that every level of management is aware of the latest and best managerial practices, measurement methods and work techniques
• to ensure better leadership behaviour by improving the managers’ leadership styles, communication skills, motivational skills and commitment
• to help the managers in prioritizing and optimizing the resources of the organization so as to achieve its goals effectively
• to make sure that the attitudes, values and beliefs of the managers match the core values and strategy of the organization
• to assess and develop the skills of the managers systematically so that they can, in turn, attract, develop and retain the talented employees of the organization
• to assist the managers to build on their strengths and work on their weaknesses so that they achieve their individual career aspirations successfully
• to help the managers cope with the rapidly changing and complex business environment
• to keep in place a proper management succession plan in order to ensure that the organization has a sufficient number of managerial personnel to fulfil the future business requirements
• to help the managers understand and share the corporate philosophy, mission and values of the business

Goals of Management Development

The primary goal of management development from the organizational perspective is to accomplish the short-term and long-term goals of the organization. However, when seen from the individual’s perspective, the goal is to help the managers achieve their own career aspirations. The goals of the development process may also be classified as anticipatory, reactive and motivational.⁷ An anticipatory goal refers to undertaking development programmes in anticipation so that managers can effectively contribute to the accomplishment of long-term objectives. A reactive goal refers to those development programmes that aim at resolving the present performance difficulties or at averting the likely performance problems. Finally, a motivational goal refers to those development efforts that focus on the self-development of the individual managers.

An organization can conduct management development programmes to fulfil the following goals:⁸

• accomplishing the corporate goals of the organization
• ensuring internal consistency in the organizational philosophy
• helping the process of better integration of various human resources activities
• promoting transparent, dynamic and democratic management practices

Steps in a Management Development Process

Once the organization decides to make changes in the job of an employee, it begins the preparation for the planning and execution of some management development programmes. For instance, it may choose to promote employees to higher positions, consider them for additional responsibilities, entrust challenging assignments to them or develop their existing performance. In most of these cases, a need-based and target-oriented management development programme becomes essential. As shown in Figure 11.1, a management development process involves three steps. These are (1) assessing the company’s strategic needs, (2) evaluating the skills and competencies of the managers, and (3) evolving strategies for the development of managers.

Assessing the Company’s Strategic Needs

The first step in a management development process is the evaluation of the future managerial requirements of an organization on the basis of its business strategies. For instance, business strategies like new product introduction, market expansion, merger and acquisition (M&A), a strategic response to the competitors’ actions and the introduction of new technology usually necessitate the development of new skills and knowledge among the managers. However, it is difficult for an organization to determine precisely the quantity and quality of the skills needed by the managers for the future. This is because the business strategies are developed mostly as immediate, incremental and intuitive responses of an organization to the developments in external environment rather than as a planned and deliberate reaction.

Evaluating the Skills and Competencies of the Managers

In the next phase, the existing skills and abilities of the managers are assessed in line with the future strategies of the organization. At this stage, key competencies like what the manager can do at present and the behaviour and competency necessary to complete the job effectively are assessed.⁹ The competency levels and skill gaps of managers are usually assessed with the help of performance evaluation techniques. The skill gaps found in managers normally forms the basis for framing the management development programmes. While assessing the skills and competencies, it should be ensured that the assessment process discovers the specific development requirements of the managers not only for the present situation but also for the future.

Evolving Strategies for the Development of Managers

In this final phase, the organization decides about how it should proceed with the process of developing the managers to meet its future management requirements. It decides about the key aspects of the development programmes like their objectives, mode of delivery, place and duration, cost and benefits, and assessment techniques. Often, the management development activities are influenced by the size and nature of the organization, the prevailing environment, the level of technology and the management philosophy.

The nature, requirements and process of management development are usually individual employee-centred. They may also be unique and different for each organization. For instance, some organizations may prefer to follow a premeditated routine development programme with result-oriented assessment systems. In contrast, some others may just ensure that their managers get ample opportunities and support to develop themselves in their profession with the least concern for the formalities and rituals.

In the same way, there may also be a difference in the learning skills of the managers and the opportunities available to them. For instance, some managers may be endowed with better managerial abilities and motivation to learn quickly as compared to others. Similarly, some managers may have effective superiors who may be good at developing others. But, others may not be as fortunate in their job and get adequate opportunities and favourable environment to learn on their job. Thus, it becomes imperative for an organization to assess the development requirements of the managers from the individual and situational perspectives.

Methods of Management Development

The management development programmes can also be classified into “on the job” and “off the job” management development techniques. As illustrated in Figure 11.2, the development programmes for managers include, among others, job rotation, internships, programmed learning, simulation method, laboratory training, case study, lecture method, audio-visual methods, role-playing, mentoring, business games, coaching, behaviour modelling, in-basket training, action learning, university-based programmes, executive coaches, in-house development centres and executive orientation (refer to the chapter on training for discussion on methods common to workers’ training and managers’ development. Other methods are being discussed in this chapter.) We shall now see these development methods in detail.

Mentoring

Mentoring refers to the teaching by an intelligent and trusted guide and advisor. In recent times, it has emerged as an important technique to develop future managers. It is a one-to-one teaching–learning process. Mentors are usually the role model for trainee managers. Mentoring, as a concept, aims at enhancing the personal and professional competencies of trainees through the process of advising and coaching. It concentrates on those skills that help the recipients to work to their highest potential and achieve career advancement.¹⁰ Mentors may or may not be from the same organization but should be experienced, competent and mature. In the course of mentoring, mentors provide coaching, counselling, and challenging assignments, besides offering personal support and encouragement. They also safeguard the rights and interests of trainee managers.

Mentoring has the following merits for managers: (i) it improves and extends their career skills, (ii) gets them career advancements, (iii) obtains higher pays and other benefits, and (iv) enables them to find more interest and motivation in the job. However, it suffers from a few limitations: (i) Ego and personality clash between the manager and his mentor may affect the effectiveness of mentoring. (ii) Senior managers are usually hard pressed for time and may find it very difficult to spare time to coach trainees. (iii) The conservative attitude of the senior managers may discourage them from accepting the task of mentoring.

As a recent phenomenon, a few organizations have introduced reverse mentoring in their organizations. Reverse mentoring refers to a process where senior managers tend to learn from younger ones. When the new employees are knowledgeable and the seniors require such knowledge for prolonging their career, the latter may choose reverse mentoring. Box 11.2 outlines the leadership initiative of a software company.

Business Games

People have a natural desire and involvement in games. This method makes use of business games to create an interesting environment for the trainees to learn their business lessons. The primary goal of business games is to ensure the involvement of the trainees in the learning process. In the business games technique, the trainees form teams and assume managerial roles in two or more imaginary but rival companies. These teams operate in a realistic but simulated situation and compete against one another by manipulating the controllable variables like price, product volumes, advertising cost and so on. Computer programs are extensively used to generate and manipulate different decisions and results normally replicating the real business situation. The advantage of this method is that the trainees learn to take decisions without the fear of the consequences of a wrong decision. Similarly, they are able to evaluate the impact of their decisions on others and others’ response to their decisions. Besides, this method can improve the problem-solving abilities and leadership skills, and promote cooperation and teamwork.

Coaching

Coaching refers to teaching and supervising someone. In the coaching method, senior managers are made responsible for coaching and developing the trainees who work directly under them. Coaching can take place in the organization formally or informally. The trainees would learn immensely out of the experience or expertise of the coach. One of the purposes of coaching is to make the trainees fit to eventually replace the senior managers in those positions. The process of development may be formal or informal. Nevertheless, coaching is a comprehensive technique to develop managers and executives.¹¹

Behaviour Modelling

Under this method, the managers learn by imitating the behaviour (called a model) of others. The behaviour model lets the trainees learn the right way of approaching and behaving in different situations. It is considered to be an ideal method for acquiring relevant skills and knowledge from others. Behaviour modelling can be used to improve the skills of managers in performance management, grievance handling, conflict resolution, overcoming the employees’ resistance to changes, tackling health and safety issues. Here, the trainees are first introduced to the correct way of performing a task. Then they are encouraged to do the work in the same manner. Finally, a review is carried out and feedback is provided to them. This management development technique, today, is an extensively used, well-researched, and very much appreciated psychologically based training intervention.¹²

In-basket Training

In-basket refers to a wood or metal container placed on the managers’ desk to hold their incoming material. In-basket training is a development technique which educates the trainees about the need for and techniques of prioritizing the situations that await their responses. It helps the managers in prioritizing the numerous business papers, reports, emails and telephone messages before acting on them. Though not presented in any specific order, some of these messages may be urgent while others may be routine. In this training, the trainees are first asked to establish priorities for each given situation before making any decisions regarding the handling of these messages. This form of development technique is found to be very accurate in predicting performance success in management jobs.¹³

Action Learning

It is a development technique that allows trainee managers to work on the problems of some other departments and not on those of their own department. On a full-time basis, a group of trainees analyse the real-world problems of a department and make recommendations. The basic idea behind this technique is to help the managers widen their spheres of knowledge and get expertise in different fields. The usual steps involved in this training are: (i) picking up a team of trainees, (ii) allotment of ambitious business problems which exceed the normal areas of the trainees’ capability and knowledge, (iii) providing an intense planning time during which the teamworks on the business problems, (iv) assigning adequate time to discuss the problems and make recommendations, and (v) finally, the senior managers or experts reviewing those recommendations and sharing their opinions with the trainees. Several global organizations like Samsung and GE are using action learning to develop their managers.¹⁴ This method helps the organizations to improve their in-house transfers and promotions of the managers.

University-based Programmes

In this method, managers seek to develop knowledge by joining the programmes offered by the universities, colleges and centres of excellence like the IIMs and the IITs. Certainly, educational institutions play an important role in training management executives in India. For instance, the IIMs offer the managers of industry an opportunity to pursue numerous practical-oriented management development programmes. Management development programmes offered by the universities and colleges are becoming increasingly popular among the managers. Moreover, the Open University and distance learning programmes are also available to managers to upgrade their knowledge and skills in their relevant fields. These institutions use case studies, lectures and growth stories to provide up-to-date management skills and practices to the managers. As a result of globalization, many foreign universities are now setting up bases in India to launch programmes that can help the managers strengthen their managerial skills. Box 11.3 indicates the role of universities in the management development programmes of the corporate sector.

Executive Coaches

Executive coaching is gaining acceptance as an important management development technique necessary for training managers, who will be the future organizational leaders. It is a programme of one-to-one collaboration between a certified external coach and a manager. Through executive coaching, the manager improves his leadership skills, gains new perspectives and reaches maximum potential. Executive coaching is acknowledged as an important element of standard leadership development programme for top-ranking executives. Usually, executive coaching focuses on three features, namely, strategy, organizational change, and behavioural coaching. Executive coaching develops leaders in the context of their current jobs without removing them from their day-to-day responsibilities.¹⁵ The main benefit of executive coaching is that coaches can help executives develop new ways to tackle recurring problems. It is also very useful, especially in times of change, for managers in the form of promotions, additional assignments, and other new challenges. Many companies have realized the stimulating role that this method can play and are employing executive coaches to develop the performance and capacities of their middle and top management. For instance, The Centre for Executive Education (CEE) at the Indian School of Business (ISB) recently hosted an executive coach training programme which was attended by participants from companies such as Raymond, Aditya Birla Management Corporation Ltd, Godrej India and HDFC Bank.¹⁶

In-house Development Centres

In-house development centres are also known as corporate universities. It is an emerging management development technique. Large companies are establishing their own in-house development centres to develop the required skills and knowledge among its employees. It is a technique for exposing future managers to practical training courses so that they can enhance their managerial competencies. In-house development centres usually makes available those courses and programmes that exactly support the management development requirements of the organization. Many companies are often working jointly with academic institutions, training and development programme providers, and Web-based educational portals to construct packages of programmes and materials suitable to their employees’ requirements.¹⁷ Box 11.4 shows the relevance of in-house development centre in management development.

Executive Orientation

This method is also called the on-board development method. In fact, orientation is an initial training effort to inform the new managers about the company, the job and the work group. Executive orientation is the technique adopted by an organization to assist its new managers in learning the firm’s structure, culture, and practices quickly so that they can begin to contribute to the organization as soon as possible.¹⁸ The major purpose of this method is to keep a close focus on the new executives, especially during the initial phase of their employment. The primary purpose of executive orientation is to educate the new managers about the intricacies of administration, clarify their roles and responsibilities, and familiarize them with cultural norms and practices. If necessary, follow-up meetings can be conducted to check their growth, experiences and challenges.

Evaluation of the Development Programme

Development programmes cost an organization in term of resources and time. Naturally, every organization would tend to know the worth of its development programmes. In this regard, it should develop a clear-cut criterion for measuring the efficiency of management development programmes. It may evaluate the development programmes in the form of its (i) contribution to the accomplishment of the organizational goals such as the efficient use of resource and verifiable improvement in quality, (ii) contribution to the increased performance of managers, and (iii) other traceable returns on development investment. Though the returns on a development programme differ from person to person, it is worth ensuring that the value of the output from development is greater than the value of the input in every case. In management development programmes, behavioural competencies are mostly considered as the learning outcome of the development process.

As regards evaluation, an organization can develop its own purpose and procedure for evaluating the performance of the trainee managers. However, there are four general purposes available for undertaking the evaluation of a management development programme. These are proving, controlling, improving, and learning.¹⁹ A brief description of these purposes is provided as follows.

Proving

An evaluation can be undertaken to prove conclusively that something has happened as a result of the development programme. In other words, the aim of the evaluation is to prove the worth and impact of the development exercise. It would enable the organization to know whether the development programme created the desired impact. Similarly, it would help them decide whether it is worth continuing the programme in the future.

Controlling

It refers to ensuring that the development programmes are conducted according to the predetermined specifications. Quantitative rating scores are used for measuring the comparative performance of the trainees.

Improving

It refers to the continuous enhancement of the tools and techniques used in the development programmes. For instance, the course content, the infrastructure arrangements and the training process are to be evaluated with the help of the participants. Their opinions may be used for making further improvements in programme structure and design.

Learning

It means measuring the actual quantity and quality of learning taking place among the participants. A formal assessment of participants may be done in the form of examination and project works to measure the efficiency of the development programmes.

There are several issues involved in evaluation, especially with regard to a development programme. For instance, measuring the long-term effect of a development programme is a difficult task for an organization. Of course, an organization usually adopts some techniques to evaluate the immediate effect of these programmes. However, studies on evaluations of training and development have found worryingly low levels of correlation between training and results.²⁰

Management Succession Planning

A change in executive leadership at some point of time is unavoidable for an organization. It is also a critical and tough exercise for an organization to find the right replacement for those in the top echelons of the management at the right time. An effective succession plan can facilitate the organization in being prepared for planned or unplanned absences of its top managers and also in guaranteeing stability in its business operations. The purpose of a management succession plan is to ensure that, to the extent possible, the firm has a sufficient number of competent managers to meet the future business needs.

Succession planning is actually a process through which an organization plans for and appoints top-level executives. It usually requires suitable managers to fill the vacancies caused by retirement, promotion, death, resignation and transfer of the existing managers. By implementing a succession management programme that is transparent and equitable, an organization forms an environment for the employees to expand their skills in anticipation of future possibilities. This also enables a workplace to position itself to adequately face any situation that might arise in the organization on account of management changes. Further, succession planning is also capable of reducing performance variations in key roles, reducing attrition among top performers, encouraging high internal recruitment and enhancing motivation levels of managers.

The concept of succession planning has gathered momentum in Indian companies. Many top companies have chalked out systematic plans for identifying and grooming talents which would eventually take over the top positions in the company. For instance, a few years back, L&T, one of India’s leading engineering companies, declared the top 10 per cent of its executives as stars and developed fast-track career paths for them. In course of time, these executives replaced the senior managers when they retired.²¹

Need for Succession Planning

In a globalized economy, the scarcity of people qualified for important leadership positions has become one of the foremost challenges facing the management today. Companies are having an acute shortage of talent, especially at the top levels of the management. This is because the demand for able and experienced managers often exceeds their supply. There are several factors that have contributed to this situation. These have been explained in the following paragraphs.

Growth of Organizations A typically growing organization will require additional leaders to fulfil its ambitious organizational goals and objectives. The expansion schemes of the companies and the tight labour market conditions may combine to create an acute shortfall in executive talent. This would in turn influence the organizations to undertake succession programmes more seriously and on a priority basis.

Early Retirements Even though employees can remain in their jobs for a longer duration, especially in private firms, top managers are of late quitting the firms early to take up lucrative consultancy services. As a recent phenomenon, even those employees who are in their early- or mid-50s quit their job to take up career in other fields where they can make more money. These developments have further enhanced the importance of succession planning for an organization.

Coping with Multiple Competency Requirements The present-day organizations with a complex network and global presence are seeking to fulfil their higher levels of management with executives having multiple competencies. For instance, companies are now looking for managers who can excel at collaboration and partnering, understand and handle vast ambiguities, and deal with global business issues. They should also be familiar with matters like business start-ups, mergers and acquisitions, management of change, the ability to manage new technology, and foreign assignments.

Of course, these managers should possess these skills in addition to the conventional skills and knowledge such as leadership skills, communication, behavioural skills and motivational skills. But, it is difficult for the organizations to get a sufficient number of good managers with these qualities. Thus, the organizations depend critically on succession planning to develop managers with complex skills and abilities.

Poaching To deal with leadership scarcity, some organizations try to attract the managers of their rivals with attractive job offers. When the efforts of these organizations succeed, the organization losing the employee might face a tight situation, especially in the short run. To avoid such a predicament, it is necessary for organizations to develop and implement management succession plans.

Requisites for Successful Succession Management

Organizations should understand clearly that succession planning cannot function in isolation and, in order to achieve success, it should be properly integrated with the corporate goals and plans. Similarly, it should get the full-fledged cooperation of all the stakeholders, namely, the trainer, the trainee manager, the management and the HR people. The following are the basic requirements in succession planning for developing the leadership that delivers business results and assures stability:

• The succession planning programme should have the complete support and patronage of the top management.
• The management should forecast with maximum possible precision the skill requirements for the immediate and distant future.
• The organization should revise the list of jobs critical to it periodically and bring them under the succession planning programme.
• The organization should systematically identify the employees with potential managerial competence for developing their skills and knowledge.
• There should be a proper alignment between the HR strategy and the succession plans. While determining HR activities like training and development, and performance evaluation, the succession plan requirements should also be considered.
• The knowledge, skills and abilities of the prospective employees must be developed on a sustained basis.
• A proper mechanism should be put in place to provide constant feedback to the potential successors about their performance and progress. There must also be a system for evaluating the efficiency of the trainers in succession planning.
• The organization should adopt a strategic and holistic approach towards succession planning and leadership development.

Impediments to Effective Succession Management

Organizations often fail to identify the factors undermining the success of their succession plans, and these factors eventually affect the efficiency of these programmes. It is thus essential for the organizations to concentrate on the identification and elimination of those factors that impede the effectiveness of the succession planning. We shall now see the major impediments to succession planning process.

Lack of Criteria for the Identification of the Successor Many organizations care little for developing unambiguous and objective criteria for selecting the potential successor for filling the future positions. Moreover, many senior managers identify their successor through chance observation of people and their skills. An inaccurate identification can keep out the talented and deserving but less visible employees from the succession programme.

Presence of Traditional Replacement Systems In many organizations, the replacement planning process targets specific persons instead of identifying specific positions for succession planning. This people-oriented succession planning often ends up with the identification of a few subordinates by the senior managers for inclusion in the succession planning. Instead, the organization should first identify the critical positions to be included in the succession planning. Then, it should develop a pool of high-potential candidates for inclusion in the planning process. Thus, a position-based replacement system is required for the success of the succession programme.

Improper Diagnosis of Development Requirements Often, organizations make a wrong assessment of the skills requirements of the potential successors. When the skills requirements are misjudged, it often leads to inaccurate selection of training and development techniques and performance evaluation methods. It is, therefore, essential for an organization to evolve scientific methods to identify the skills and knowledge requirements for its future positions and also the skill gaps of the trainee managers.

Inadequate Focus on Interpersonal Skill Requirements On many occasions, organizations emphasize more on developing the technical skills and competencies of the future leaders and simply overlook their interpersonal and team-building skills. Consequently, these succession programmes pay no attention to leadership, motivational, communication and socialization skills of the participants. An organization should, therefore, develop a comprehensive succession programme by including both hard and soft skills components in the development programmes for its prospective future leaders.

Too Little Importance to Lateral Mobility Quite often, organizations consider the vertical mobility of the immediate subordinates to higher positions as the only option available in succession management. They simply ignore the prospects of lateral mobility, which considers other employees also for higher positions as an alternative in the succession planning. Any narrow approach towards succession management would reduce the scope of succession planning in the organization. Thus, the management should include lateral mobility also as a part of succession management strategy.

Lack of Sufficient and Timely Sharing of Feedback The absence of the availability of the feedback about the current performance and future assignments may drive the potential successor out of the organization. When the prospective employees remain ignorant about what their management plans for their future, they may tend to quit the organization in search of better prospects elsewhere. Thus, it becomes important for the organization to ensure that the information about the career plans concerning the employees is shared with them without any delay.

Lack of Follow-up Action In many organizations, succession plans often remain in the plan stage and in paper form. These organizations lack the sustained enthusiasm and motivation required to follow up the plans with necessary actions. In some organizations, the management simply fails to take succession management to its logical end, which is posting the identified and trained successors to the vacant positions. This occurs when the management changes its preference for the identified position and dumps the person groomed for that position through the succession planning process.

Absence of Managerial Initiative and Support The critical prerequisite for the success of any succession management programme is the active support and constant encouragement from the top management. Many organizations never provide the importance that it deserves in the strategic planning. This is because the management is concerned more with its immediate future and short-term goals. It is important for the management to realize the benefits of succession management and it should strive to support this concept on a sustained basis.

Insecurity of the Boss Managers often feel threatened when succession issues are discussed with them. They view the move as the beginning of the end of their career with the organization. In such a situation, an insecure boss may display disinterest and even apathy in sharing his skills and knowledge with his potential successor. Obviously, the top management should enlighten the managers about the purpose and intentions of succession planning and dispel the apprehensions they may have about the whole programme.

Summary

1. Management development is a long-term process by which the managers’ conceptual knowledge and competencies are developed to make them more suitable for the present and future responsibilities.
2. The goals of management development are: (i) accomplishing the corporate goals of the organization, (ii) ensuring internal consistency in the organizational philosophy, (iii) helping the process of better integration of various human resources activities, and (iv) promoting transparent, dynamic and democratic management practices.
3. The steps in a management development process are: (1) assessing the company’s strategic needs, (2) evaluating the skills and competencies of managers, and (3) evolving strategies for the development of managers.
4. The methods of management development are job rotation, internships, programmed learning, simulation method, laboratory training, case study, lecture method, audio-visual methods, role-playing, business games, coaching, behaviour modelling, in-basket training, action learning, university-based programmes, executive coaches, in-house development centres and executive orientation.
5. The reasons for the growing importance of succession planning are: growth of the organizations, early retirements, coping with multiple competency requirements, and poaching.
6. The hurdles to succession management are lack of criteria for successor identification, presence of a traditional replacement system, presence of traditional replacement system, improper diagnosis of development requirements, inadequate focus on interpersonal skill requirements, too little importance given to lateral mobility, lack of sufficient and timely sharing of feedback, lack of follow-up action, absence of managerial initiative and support, and insecurity of the boss.

Review Questions

Essay-type questions

1. Discuss the strategic role of management development programmes in the growth of an organization in detail.
2. Evaluate critically the steps in a management development process.
3. Illustrate on-the-job training and development methods with relevant examples.
4. Describe any five modern development programmes adopted by Indian industrial organizations.
5. Examine the purposes and process of evaluation of a management development programme.
6. “Succession planning greatly enhances the stability of business operations.” In the light of this statement, discuss the need for a succession management process.
7. “Management development is nothing but guided self-development.” Discuss.
8. Compare and contrast any four management development programmes widely practised in industrial organizations in India.
9. Identify the nature and kind of management development programmes implemented by Indian organizations.
10. “Management development programmes are the privilege of a few large and elite organizations.” Present arguments for and against this.

Skill-development Exercise

Objective – The objective of this exercise is to let you know how to identify the critical positions in an organization for succession management and develop a succession management plan for these jobs.

Procedure Note – The class is divided into groups. Each group has (1) an HR manager, (2) two HR team members, (3) two external experts in succession planning, and (4) two observers of the meetings. The role of the observer is to observe and report about the various aspects of the role-playing sessions.

Situation

Meenakshi Steel Rolling Mills is a medium-scale company engaged in the production of heavy-alloy steels. The company enjoys a remarkable market share in the industry. It has been following the practice of having a few experienced people as the heads of different departments like production, marketing and finance. In accordance with its organizational culture, all major decisions were unilaterally taken by them and these decisions were timely and productive for the organization. In fact, these people can take a rightful credit for the present stature and success of the company. Apparently, the middle- and low-level managers were not included in the decision-making process.

Unfortunately, the production head suffered a major health crisis and had to be hospitalized. It became an unprecedented situation for the company as it could not find any immediate substitute for the ailing production head. The stability of the company was affected as production planning and decision-making aspects simply collapsed. The management was rudely shocked by the reality and realized that the absence of succession planning was the root cause of the problem. It failed miserably to keep in place any plan for grooming the future leaders of the company.

The company clearly understood the importance of succession planning and instructed the HR manager to identify the critical positions of the company and develop a succession plan for each of these positions at once. The HR manager commenced his activities towards this mission earnestly.

Steps in the exercise

There are four steps to this exercise:

Step 1: The HR manager convenes a meeting with his HR team to identify the crucial positions, which require succession plans immediately.

Step 2: He meets external succession plan experts to discuss the ways and means of developing succession plans for the crucial positions.

Step 3: He meets the HR team again to develop the criteria for identifying the potential successors for the future vacancies and also for finalizing the exact programmes to develop the competencies of the potential successors.

Step 4: The observers analyse the role-playing session and give their feedback on the performance of the members.

Case Study

Kepler Boilers Limited is a private sector manufacturing unit engaged in the production of boilers of medium size. Mr Ravi Prasad founded this company with two other field experts, namely, Rakesh and Rathore. All the three persons took up important responsibilities in the business with Ravi becoming the chairman-cum-managing director of the business. The company made a humble beginning in the business of producing and marketing of boilers nearly three decades ago. Today, it has secured a solid place in a highly volatile market. In spite of stiff competition from the established players in the market, it gradually expanded its business operations to reach this position.

Recently, Ravi mooted an idea of diversifying the operations of the business and entering entirely new business fields such as hotel and cement industry. The purpose behind this proposal was to diversify the investment, thereby reducing the industry-specific risks associated with the boiler industry. The proposal found immediate support from Rathore, the finance head. As the head of the finance department, he viewed Ravi’s proposal as a viable option for risk diversification and reduction.

However, this strategy was strongly opposed by Rakesh, the production head. He gave a detailed response to the chairman’s suggestion. He argued that the company was well-entrenched in the existing industry and any future investment ought to be in the known field only. Further, he cited the advanced age of the three founders, the complexity of the present-day businesses, the lack of continuous learning among members and the indifferent attitude of the company towards the management development programmes as the factors capable of affecting diversification proposal. He also questioned the ability of the top management in understanding the intricacies of the other business fields at present and also the organizational preparedness in ensuring a smooth transition in the existing business at the top levels in the event of top people moving to other businesses.

Rakesh stated emphatically that the organization should first facilitate all its managers at different levels of the management to attend external learning programmes in order to gain up-to-date knowledge about the developments in the external environments and the nuances of different businesses. He also suggested that the company should work with the leading business schools in the region to allow the managers to do long-term courses with these institutions. Finally, he stressed the need to develop succession plans for the top management, especially for the jobs critical to the stability of the business. Obviously, he sought the immediate attention of the management to these issues even while advising it to go slow on its diversification proposal.

The chairman appeared to be convinced by the arguments of the production chief and he decided to put his proposal on hold for some time. Instead, he instructed the HR department to develop a comprehensive plan of action for introducing management development programmes and also an effective succession management scheme. However, the finance head, Rathore, was unconvinced and repeatedly urged the management to go ahead with its diversification plans.

Questions for discussion

1. What is your opinion about the chairman’s proposal for diversification?
2. How would you deal with the situation if you were the chairman?
3. Between Rakesh and Rathore, whose stand is more convincing for you and why?
4. Do you have any alternative proposal for the situation?

Notes

1. John M. Moore, “The Role Relocation Plays in Management Development,” Personnel Administration (December 1982): 31–34.
2. Terry L. Leap and Michael D. Crino, Personnel and Human Resource Management (New York: Maxwell Macmillan International Editions, 1990), p. 309.
3. Gary Dessler, Human Resource Management (Delhi: Pearson Education, 2005), pp. 285–286.
4. Gary Dessler, Human Resource Management (Delhi: Pearson Education, 2005), pp. 285–286.
5. Terry L. Leap and Michael D. Crino, Personnel and Human Resource Management (New York: Maxwell Macmillan International Editions, 1990), p. 309.
6. Edwin B. Flippo, Principles of Personnel Management (New York: McGraw-Hill, 1984), p. 51.
7. Michael Armstrong, A Handbook of Human Resource Management Practice, 8th ed. (London: Kogan Page, 2001), pp. 579–581.
8. Julia R. Galosy, “Curriculum Design for Managerial Training”, Training And Development Journal (January 1983): 48–51.
9. Michael Armstrong, A Handbook of Human Resource Management Practice, 8th ed. (London: Kogan Page, 2001), p. 477.
10. Jacqueline Durett, “Mentors in Short Supply,” Training, 43, no. 7 (July 2006): 14.
11. “For Success with Corporate Coaching, Begin with Assessment,” HR Focus, 83, no. 7 (July 2006): 8.
12. Paul Taylor, Darlene F. Russ–Eft and Daniel W. L. Chan “A Meta-Analytic Review of Behavior Modeling Training,” Journal of Applied Psychology, 90, no. 4 (2005): 692–719.
13. Kenneth M. York, David S. Strubler and Elaine M. Smith, “A Comparison of Two Methods for Scoring an In-Basket Exercise,” Public Personnel Management, 34, no. 3 (Fall 2005): 271–280.
14. Michael Marquardt, “Harnessing the Power of Action Learning,” Training and Development, (June 2004): 26–32.
15. Paul Michelman, “Methodology: Do You Need an Executive Coach?” Harvard Management Update, 9, no. 12 (December 2004).
16. “Getting There with Executive Coach Marshall Goldsmith,” Indian School of Business.
17. Martha Peak, “Go Corporate U!” Management Review, 86, no. 2 (February 1997): 33–37.
18. Terence F. Shea, “‘Sink-or-Swim’ Is Not an Option,” HR Magazine 50 (March 2005): 14.
19. Mark Easterby–Smith, “Training Evaluation and Follow-up” (1994) in Joseph Prokopenko (ed.) Management Development: A Guide for the Profession, International Labour Organization, 1998, pp. 158–162.
20. Gary P. Latham and Lise M. Saari, “The Application of Social Learning Theory to Training Supervisors Through Behavioral Modeling,” Journal of Applied Psychology, 64, no. 3 (1979): 239–246.
21. A. V. Vedpuriswar, “Strategic Issues in Succession Planning,” Effective Executive, (November 2001), ICFAI, p. 26; available at http://www.vedpuriswar.org/book_review/Strategic%20Issues%20in%20succession%20planning.pdf.