How training and development supports business growth

by Business Case Studies on Monday 14th September, 2009

Growth is an objective for many businesses and it can be achieved in a number of ways. Tesco has grown from being a single grocery stall in the East End of London to the largest British retailer. Not only that, it is also the world's largest grocery retailer with outlets in Europe, USA and Asia. Tesco has achieved this level of growth by ensuring that it responds to its customers' needs. It currently has a workforce of over 460,000 worldwide. For its employees to recognise and satisfy the requirements of the customers, they need to be flexible and well-trained. Tesco has therefore adopted a structured approach to training and development to support its continuing growth. This involves identifying training needs, using a range of on-the-job and off-the-job training methods and providing development opportunities.

Last week Kraft, one of America's largest producers of food, tried to buy Cadbury in an attempt to further its own growth. The bid was rejected; however, if successful it would have meant that Kraft increased its share of the world confectionary market to 15 percent, the same as Mars. The company already owns Toblerone and Terry's so this deal would have allowed it to build on its position in this global market. (The Times Online 7th September 2009)

Growth can occur in a number of ways. Inorganic growth, through mergers and acquisitions can be a fast way of increasing the size of a business although this can carry risks as it is difficult to know which businesses to buy and for how much. For example, Kraft's bid of £10.2 billion was considered too low and therefore rejected by Cadbury. Organic growth involves increasing sales and new customers for the existing products and services offered by an organisation. Although this is a slower method of expansion it can be easier to ensure the organisation continues in the direction required. Businesses can use methods such as providing training and development to support this type of growth.

Questions

1.Other than growth, list three other possible objectives for a business.

2.Describe and give examples of on the job and off the job training.

3.Analyse how training and development can aid an organisation's growth.

4.Discuss whether organic growth using training and development is better than inorganic growth, through mergers and acquisition, for organisations such as Tesco.

Answers to questions

1.Other than growth, list three other possible objectives for a business Answer may include: Survival, Making a profit, Providing a service

2.Describe and give examples of on-the-job and off-the-job training On the job training is training that occurs whilst in the course of doing the job. Methods include job shadowing, coaching, mentoring, job rotation or secondment. Off the job training is training which is undertaken away for the workplace e.g. block release at college, evening classes.

3.Analyse how training and development can aid an organisation's growth Answers may include: Skilled workers are more productive. A trained workforce may attract more customers.Training and development can lead to lower staff turnover rates. This in turn leads to a more experienced and skilled workforce.Training and development can produce a flexible workforce. This might be required if an organisation is looking to expand into other markets.

4. Discuss whether organic growth using training and development is better than inorganic growth, through mergers and acquisition, for organisations such as Tesco. On the one hand: Organic growth may be easier to control. Managers can ensure the business grows in line with its overall strategic vision. Employees understand the way the business works right from the start. There is less likely to be conflict which can occur when two businesses with different cultures join together. Organic growth uses internal funds and is often less expensive than pursuing mergers or acquisitions. Organic growth tends to be less risky.

However: Inorganic growth can be achieved much more quickly. The skills and experience of the workers can be exploited. No need to recruit new workers or buy in new machinery, buildings or equipment. May be easier to enter new markets through mergers and acquisitions than through organic growth.

Lesson plan and resources for the Tesco case study

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