The impact of management development on perceptions of organizational performance in European firms

Management development is generally regarded as a key element in a strategic approach to human resource management. Yet there is still little empirical evidence that it actually contributes significantly to superior firm performance, and if it does, precisely which aspects of management development policy and practice lead to these positive outcomes. The purpose of this paper is to test these relationships. Based on interviews with human resource development and line managers in 499 European firms, contextual factors like sales turnover, size and country explained some variance in perceptions of performance. However, the degree of variance explained is considerably enhanced when variables are introduced, which capture the way management development is conceived and implemented. Causal path analysis shows that a favorable strategic fit and organizational fit significantly predicts line manager perceptions of the importance given to management development, which in turn, distinguishes high- from low-performing companies.