Main Barriers For Small Firms To Invest In Management And Leadership Development

Literature Review – Management and Leadership Development (MLD)

Critically analyze the main barriers for Small firms to invest in Management and Leadership Development.

Management and Leadership Development (MLD) is one of the key ingredients for most of the leading organizations throughout the world for achieving success and for gaining competitive advantages over potential competitors. The development process enables the organizations to lead their entire workforce and to resolve the organizational issues effectively. It becomes an issue for the organizations to operate effectively without having an efficient leader, especially within the current dynamic circumstances. According to Gold et al. 2010, leadership behaviors includes mounting and articulating organizational vision, empowering, listening, problem solving, role modeling, demonstrating confidence, protecting and representing the organization and walking the job.

However, many researchers suggested that the MLD program is never easy to conduct, especially by the small sized organizations. Dalton (2010) stated that either the small organizations have not understood and neglected the importance of MLD or they are just incapable of conducting such program within their organizations in terms of financial and structural capabilities. Bush (2010) indicated that the managers of small organizations are considering the MLD positively but somehow their interests are lacking to involve themselves within such program and also small organization owners and managers believe that the MLD trainings and programs are academic and impractical.

The purpose of the assignment is to identify the constraints for the small firms investing towards Management and Leadership Development (MLD) and to provide suitable recommendations for minimizing the barriers for those firms. For evaluating the barriers for small firms to invest in MLD, the current study reviews the existing theories and theoretical models of Management and Leadership Development (MLD).

Management and Leadership Development (MLD) signifies both formal and informal leadership and management development that are essential for enhancing the aptitude, awareness and skills regarding management and leadership. MLD is entirely a process undertaken by the human resource development operations and activities (McGurk, 2010). The key motive of the process is to enhance the competency level of the skilled people, so that they will be able to lead and manage their organizations. It can be termed as one of the key steps of talent management by the HR professionals where the main aim is to develop leadership and managerial capabilities for supporting the organizations in the future (Tian et al.  2015).

Skills	Management and Leadership Development	Responsibility
Owner	Transition Management Skills	Developing long-term visions Planning Transitions towards the next stage of growth
Senior Manager	Organizational Development Skills Strategic Planning Organizational Planning Strategic Leadership Cultural Management	Monitoring and Developing Strategic Planning Managing Daily Operations
Middle Manager	Organizational Management Skills Management Development Financial Management Performance Management and Control Team Building Conflict Management	Coordination of work within the functional areas and direct reporting
Line Manager	Operational Management Skills Recruiting and Selection Training and Coaching Daily Supervision Management Meetings Performance Appraisals	Oversee Work
All of the Above	Core Management Skills Interpersonal Effectiveness Time Management Operational Leadership Effectiveness Delegation Effectiveness Problem Solving and Decision-Making
	Role Concept Developing Transition towards upper level management responsibilities successfully

Table 1: Management and Leadership Development (MLD)

(Source: Managers.org.uk, 2015)

The activities of MLD include management qualification and education, coaching, shadowing, mentoring, self-directed learning, on job experience and action learning. The key activities of MLD are as follows:

Skills

Qualification: The activity typically involves the off-job development activities, obtaining education and qualification, especially from the business schools and professional authorities (Mondy and Mondy, 2014).

Developmental Programmes: Developmental programmes or activities includes mainly both on-job and off-job development including leadership and management development activities or coaching (Forray, 2010).

On-The-Job-Development: It involves typically the on-the-job activities, coaching and opportunities (Björkman and Welch, 2014).

Assessment: Tools such as 360 degree and psychometric tests are essential for carrying out the assessment of formal development (Byars, 2015).

The most important components of leadership include vision, values, empower and encourage, which are essential for managing the small organizations, especially for the small sized firms. Most of earlier researches have shown that the owners of the small sized are not the good leaders and they often stumble attracting talented employees towards their organizations (Edwards et al. 2015). In addition, most of the small sized organizations are profitable but inefficient dealing with any organizational issues. Many past researches have stated from their observations and analysis that many small firms had to shut down their business in spite of getting adequate profit. The researches have criticized the leadership capabilities of the owners of those organizations (Deadrick and Stone, 2014).

Sufficient productivity, talented workforce and operational efficiency are not always enough for the small sized organizations to sustain and to expand, as the organizations need a leader with various managerial and leadership skills (Tian et al. 2015). The leaders needs to be efficient enough for carrying their organizations and for managing the organizational issues effectively in order contribute towards the growth and development of the company. However, to adapt such capabilities, the owner requires to develop leadership and managerial skills through Management and Leadership Development (MLD) programmes (Stone, 2014).

The owners and the managers of the small firms should be aware of the management and leadership skills, which are essential for the growth and development of their professional career and for their organizations (Sikora and Ferris, 2014). In case of a small firm, the financial, human and operational resources are limited. In addition, most of the industries and markets are getting more competitive and saturated frequently due to the presence of many potential and leading competitors (Mondy and Mondy, 2014). Management and leadership skills are the convenient and mandatory skills for managing the organizations and for leading the organization towards success. These skills also help to manage all sort of organizational resources effectively (McGurk, 2010). In addition, these skills are also helpful for developing decision-making skills and for constructing new strategies or policies for gaining competitive advantages.

Owner

However, the managers and the owners of many small sized firms are not giving enough priority or mostly unaware about the positive aspects, benefits or about the values of such skills (Howland, 2012). The consequences for the lack of awareness are becoming massive for those small firms as they are often getting themselves involved within severe organizational issues, which are responsible for bringing obstacles for their business in terms of profit and organizational success. Additionally, they are also getting themselves far behind their competitors (Gold et al. 2010).

The Management and Leadership Development (MLD) programs are time consuming as they involve training, motivational and academic knowledge gathering processes. The MLD skills include transition management skills, organizational development skills, organizational management skills, operational management skills and core management skills (Forray, 2010). Although, the relevancy of these skills is larger for the leading and bigger organizations but all the small sized organizations, which are considering and are concentrating to expand their organizations and businesses, should acquire these management and leadership development skills, as they are essential for enhancing the performance and operational efficiency of the organizations (Edwards et al., 2015).

An organization considered small in term of their structure, work forces, operational efficiency and financial capabilities. Most of the small firms have fewer amounts of employees and managers and a flat organizational structure. As a result, the owners or the managers of those organizations often have to deal with most of the situations including various organizational issues and decision-makings (Deadrick and Stone, 2014). It is not always problematic for the organizations and their owners as they have the capability to take independent decisions and to implement new strategies effectively with having maximum amount of obligations. However, as they are largely involving within such over-stretched activities, they often have adequate time to develop management and leadership skills (Dalton, 2010).

The cost associated with the Management and Leadership Development (MLD) is often expensive as for implementing new training sessions and for consulting with academic resources (Carmichael, 2011). In addition, the returns on investments towards these programs are intangible and the organizations cannot assure or forecast the amount of benefits or positively outcome that they will be getting (Byars, 2015).

In most of the cases, the small sized firms concentrate more upon their productivity and profitably. However, they often consider the strategies or policies required for organizational growth and development (Bush, 2010). For the purpose, the organizations should have to invest towards Management and Leadership Development (MLD) but they often considered themselves as incompetent. Limited financial capability is one of the key reasons behind their incompetency. Most of the leading and larger organizations are investing a lot towards MLD for getting both competitive advantages and organization success as they are financially independent and are capable of incurring the costs required for conducting such program (Björkman and Welch, 2014).

Senior Manager

Conclusions

The current study concludes that in spite of various realizing the significances of Management and Leadership Development (MLD), most of the small firms are rarely investing towards the MLD program due to various reasons including their financial barriers, neglecting the importance of management and leadership skills and less spare time available for the managers to develop those skills. However, the study suggests that to understand the importance of Management and Leadership Development (MLD) and to enhance the rate of investments towards MLD programs by the small sized firms, it is very important to learn the management and leadership skills.

Government and Academic Interventions

The government and various academic institutions should encourage the knowledge and learning process of Management and Leadership Development (MLD) to raise awareness regarding the value of MLD among the owners and managers of small firms.

Assessing the Management and Leadership Development (MLD) of the potential competitors

The next recommendation is to analyze the strategies or policies regarding Management and Leadership Development (MLD) that potential competitors are following in terms of their financial capability and available time. Additionally, the owners, managers and the entrepreneurs should also assess how the programs are benefiting their competitors.

Effective Communication between HR professionals and the Owners

Management and Leadership Development (MLD) is mostly the activity or program conducted under the direct involvement of the human resource department. Therefore, it is the responsibility of the HR professionals to communicate effectively with the owners and managers of the small firms to influence them investing towards the MLD program.

Creative thinking by the SME leaders

The key to success within the current circumstances is to think creatively while running an organization. This will open up the opportunity for the leaders to understand the importance of these skills including the Management and Leadership Development (MLD).

Reference List

Byars, L. (2015). Human resource management. [Place of publication not identified]: Irwin Mcgraw-Hill

Carmichael, J. (2011). Leadership and management development. Oxford: Oxford University Press

Dalton, K. (2010). Leadership and management development. Harlow, England: Prentice Hall/Financial Times

Gold, J., Thorpe, R. and Mumford, A. (2010). Gower handbook of leadership and management development. Burlington, VT: Gower

Mondy, R. and Mondy, J. (2014). Human resource management. Boston: Pearson

Stone, R. (2014). Human resource management. Milton, Qld.: John Wiley and Sons Australia

Tian, M., Risku, M. and Collin, K. (2015). A meta-analysis of distributed leadership from 2002 to 2013: Theory development, empirical evidence and future research focus. Educational Management Administration & Leadership

Björkman, I. and Welch, D. (2014). Framing the field of international human resource management research. The International Journal of Human Resource Management, 26(2), pp.136-150

Bush, T. (2010). Accelerating Leadership Development. Educational Management Administration & Leadership, 38(2), pp.147-148

Deadrick, D. and Stone, D. (2014). Human resource management: Past, present, and future. Human Resource Management Review, 24(3), pp.193-195

Edwards, G., Schedlitzki, D., Turnbull, S. and Gill, R. (2015). Exploring power assumptions in the leadership and management debate. Leadership & Org Development J, 36(3), pp.328-343

Forray, J. (2010). Management and Leadership Development. Academy of Management Learning & Education, 9(1), pp.145-147

Howland, G. (2012). Book Review: Leadership and Management Development. Educational Management Administration & Leadership, 40(3), pp.410-411

McGurk, P. (2010). Outcomes of management and leadership development. Journal of Mgmt Development, 29(5), pp.457-470

Sikora, D. and Ferris, G. (2014). Strategic human resource practice implementation: The critical role of line management. Human Resource Management Review, 24(3), pp.271-281

Managers.org.uk, (2015). Management & Leadership Qualifications, Training and Development – CMI. [online] Available at: https://www.managers.org.uk/ [Accessed 19 Jun. 2015]