Decision Making Factors in Small Business: Training and Development

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DECISION MAKING FACTORS IN SMALL BUSINESS: TRAINING AND DEVELOPMENT

Businesses of all sizes have recognized the value of training. After all, training is an investment in organizational well-being, one that is made necessary by rapid changes and increasing complexity in all aspects of business. The commitment to training is evidenced by business expenditures for training. The American Society for Training and Development (ASTD) estimated that $31 billion is spend annually on all forms of training for business. A more conservative figure, $4.4 billion (up from $2.96 billion in 1982), is offered by Dale Feuer. Feuer's figure, unlike ASTD's, is based upon a survey of businesses and trainers from around the nation.

Both Feuer and ASTD acknowledge that businesses make extensive use of training. Feuer noted that businesses with fewer than 500 employees expected to spend $3.57 billion in 1985, while ASTD pegged the amount at $7.75 billion for the same group. ASTD also found that 87 percent of small businesses have some form of educational assistance program, and that 14 percent of their employees participated in these programs.

In spite of the significant expenditures by small businesses for training, little effort has been devoted to gathering empirical evidence of the needs of small businesses, and even less attention has been given to training and development (T&D) decision processes. Robert Nelson and Philip Neck reported in 1982 that educational programs in small business were needed, and recommended a college major in the area. They did not, however, look at in-service training for small businesses, nor at the factors decision makers consider in arriving at T&D decisions.

Barbara Bart examined small business needs and interests in her study of Savannah, Georgia, small businesses, and found that most businesses were not interested in T&D. Of the businesses in her survey, only 20 percent expressed interest in any type of training program (market planning and forecasting and tax planning). While Bart did examine training needs, she did not look at how or why small businesses perceived those particular needs.

Leslie Kelly also discussed small business training in "Small Business's Big Training Needs." Kelly indicates that small business can benefit from T&D and, from her personal experience, lists thirteen training topics. Little else has been offered in the literature which examines small business T&D needs or the factors relating to T&D decisions.

METHOD

As an exploratory effort toward filling this void in the T&D literature, 496 questionnaires were mailed to randomly selected businesses in Virginia, 101 of which were returned and 76 (15.32 percent) of which were usable for this study. The rather low response rate was due to the use of bulk mailing and the lack of follow-up mailings.

In order to have a comparative frame of reference, questionnaires were sent to both small and large businesses. Of the 76 usable responses, 34 were received from small businesses and 42 from large businesses. For this study, a business was considered small if it employed less than 200 people.

All questionnaires were mailed to the president, CEO, or owner of the firm. Respondents were asked to provide company information, as opposed to personal background information. All of the nine major Standard Industrial Classification (SIC) categories were represented in the responses, but the most common category was manufacturing.

The thrust of the study was to examine T&D decision-making factors in small firms and to compare them with the same factors in large businesses. The specific research questions were:

* Who is the T&D decision maker in a small business?

* What method is used to determine who receives training?

* How does the decision maker select or reject a T&D program? …