Investing in management development in turbulent times and perceived organisational performance: a study of UK MNCs and their subsidiaries

Abstract

The recent global economic crisis has contributed to organisations carefully scrutinising all budgets. Resources allocated to investment in human capital, especially training and development, have been one of the first cuts in previous downturns. This reflects, at least in part, that training and development is often regarded as expenditure. Such cutbacks are likely to be detrimental to future competitive advantage, especially if there is a link between training and development and organisational performance. This study focuses on one aspect of training and development, management development (MD). A multi-faceted process model of MD – comprising eight inputs; two constructs of process and two constructs of output – is used to examine whether there is a link between MD and perceived subsidiary performance. The mediating effect of national context on any relationship between MD and perceived subsidiary performance is also explored. The potential implications of the global economic crisis for expenditure on MD and how such changes may affect future competitiveness are also considered.