ARE CORPORATE UNIVERSITIES (CU) POSSIBLE IN EMERGING COUNTRIES? ARCOR
UNIVERSITY (AU)
Dr. Leandro A. Viltard
Buenos Aires University, UBA, Argentina
E-mail: lviltard@yahoo.com.ar
Submission: 22/12/2013
Revision: 06/01/2014
Accept: 10/01/2014
ABSTRACT
This article
explores CU implementation and whether it is applicable and effective in
emerging countries like Argentina (where there are no studies on the
subject).
Through an
in-depth review of Arcor University (AU), Arcor’s Group CU, located in Argentina,
the feasibility of the CU is shown, under certain conditions. This analysis is
complemented with specialists´ interviews to deepen our insights and
investigation’s results.
Our conclusion
is that the CU complements Corporate Training’s traditional offering, as its
programs are directed towards practical contents and performance/organizational
improvement. In this way, it is possible to enhance the actual corporate
educational paradigm and talent employability.
The research
design is not experimental and is transversal as it relates to a specific
moment in time.
Keywords:
Corporate University, Corporate education and training, Grupo Arcor, Arcor
University, Emerging countries, Developing countries, Argentina, CU
Implementation.
1.
INTRODUCTION
Corporate
Training (CT) is a boundless reign. Business Schools of Traditional
Universities (TU), Traditional Corporate Training Departments (TCTD),
independent professors and specialists (PS) and CUs are offering programs to a
vast community of very busy professionals and companies’ employees. In this
environment, the questions that everybody asks are: How can we provide programs
of excellence? How can we attract more students?
From
one side, TU’s Business Schools offer general programs to a wide variety of students;
from the other, through TCTD and PS there are directed offers to improve
specific needs and performance in the corporate world. But, what the CU has
introduced is the possibility of developing strategic and operational matters
in a holistic and collaborative way. From this point of view, the CU has newly
emerged as the source of people’s contribution and participation, aligning
strategic and operational objectives within organizations (ALLEN, 2007).
It is
needless to say that both worlds are necessary; the “traditional”, basically
referring to theoretical matters, and the “new”, referring to practical and day
to day issues. Consequently, the educational roles and limits are under
constant pressure and analysis (MEISTER, 2000).
The
main hypothesis of this investigation considers that the CU complements what is
taught at TUs and, well applied, enhances what TCTDs are doing. Its
implementation contributes to a more practical content directed to performance
and organizational improvement.[1]
1.1.
Design:
Methodology & Analysis
This
analysis is based on a study of AU study (from Grupo Arcor, Argentina) and five
interviews with key specialists to better understand the CU phenomenon.
The
study is exploratory and descriptive. It uses a qualitative methodology and a
non-experimental design (it is transversal, as the information was collected at
a given moment of time).
AU
and CUs in general were the units of analysis. AU was selected directly and
intentionally.
The
response units were the AU Head (B.S. María Belen Vallone, meeting held on
05/14/2009) and the specialists interviewed.
This
research was done in Argentina between Jan. 2009 and May 2012.
1.2.
Research
Limitations/Clarifications
·
Although we recognize
that it is very difficult to ascertain that all relevant information has been
included, we referred to worldwide information from relevant secondary sources.
·
AU was selected
intentionally as there were not many other CUs implemented in Argentina. In
order to get a better understanding of this phenomenon, we tried to contact
other CU’s executives but, for instance, Techint Group –which had Tenaris
University – were unable to respond as they had disputes with the Venezuelan
and Argentinean governments.
·
The information given
by the AU Head was the most we could obtain as there were some areas in which
they couldn’t disclose information.
·
The interviews with key
specialists and the AU Head were held in their offices in order to have a
minimal impact on their environment and, finally, on the interview results. We
used semi-structured interviews in order to enrich, as much as possible, this
investigation’s results.
·
The AU case and the
specialists’ interviews were utilized as a way to collect information from the
field. As a result, we haven’t used a triangulation with other data collection
techniques to better guarantee the results of this investigation.[2]
·
Not to undermine the
content and the investigation´s purpose, the conclusions and opinions that were
expressed are strictly based on the information obtained from the analyzed
data.
As a
qualitative investigation, the results that are shown cannot be generalized,
although they are useful for decision making purposes. Our aim is to enhance CU
knowledge and conclude on its implementation possibilities in Argentina as emerging
country (KRASKA, 2006).
1.3.
Findings
Under certain conditions, international market
expansion, company size and right executive’s mentality, the CU concept is
feasible in an emerging country like Argentina. The CU is reinforced
as a way to enhance the actual educational paradigm and talent employability,
through proposing a homogeneous and powerful knowledge management environment.
1.4.
Originality
and Value
CUs
are not common in Argentina and studies on this matter have not been made.
We
are sure that the study of this phenomenon could help in Corporate Training
(CT) progress and individual education improvement. Additionally, input from
the local and foreign specialists’ give a solid theoretical base to support the
findings of this investigation.
1.5.
Objective
of this investigation
To
better understand the CU implementation context in Argentina and determine if
it could enhance the actual corporate educational paradigm and talent
employability (continuing education).
2.
GRUPO
ARCOR - ARGENTINA
The
entrepreneur tradition in Argentina presents an uneven picture and, generally,
a lack of competitive strength and global recognition. We can find some
explanations in the following facts:
·
Closeness that has existed between governments and
groups of power, impacting their independence,
·
Lack of stable policies to encourage international
firm’s development, and
·
The continuous political and economic fluctuations
which have not created the necessary conditions for business, such as exchange
rate and tariff policies.
Within this environment, it was difficult to find
enterprises that exceeded the local level with a successful track record and
long term views. In this sense, the most common reason used as a justification
for not implementing actions that went beyond the daily activities were related
with SME’s size (forgetting that every firm begins small) and financial
difficulties. It was understood that the comfort zone of many executives and
firms was a real danger and those arguments should be reviewed.
Grupo Arcor SAIC (from now on, Arcor) is one of the two
largest food firms in Argentina, exporting, mainly candies, to 120 countries
(2008 exports totaled $310 million). Some impacting figures of this holding
showed: 2009 annual revenue of $2,300 million and nearly 20,000 total employees
(of which 14,000 in Argentina); 41 manufacturing plants; 13 distribution
centers located in LA; 12 sales offices in America, EU, Asia and Africa; +1500
products manufactured and +100 launched a year. Also, they have vertically integrated
strategic inputs, with two packaging companies (Cartocor SA and Converflex SA).
Through Bagley LA SA is the largest South American cookies’ firm.
Ethics and tradition are very important for this holding,
and Luis Pagani, Group's Chairman, has remained as one of the most prestigious
entrepreneurs in Argentina. Surely, many companies in the world would like to
imitate Arcor’s results.
3.
ARCOR UNIVERSITY (AU)[3]
We
chose AU because it sparked our interest as researchers due to its particular
character and significance, as well as the high interest that it might have for
the academic and business community. It had been little studied due to its
recent implementation and, also, because of issues of confidentiality. Through
AU analysis there would be better insights on CU possibilities in an emerging
country like Argentina (DEALTRY, 2005; DEALTRY, 2000).
AU
was founded in 2007-2008. Previously, CT within Arcor has been headed in each
Business Unit (BU) through individuals TCTDs, causing value chain inefficiencies,
especially in human resources training (e.g.: incomplete educational offer,
partial approaches and non-homogeneous content and courses).
Thanks
to AU, significant changes
have been noted in their business environment, impacting processes and stakeholders.
Individual skills and relevant shared knowledge have been built, using it also
as a support for new strategy definition. Additionally, AU has been considered
as the engine to promote organizational and technological change, helping in
talent attraction and retention (KERKER, 1999).
Key aspects of its implementation are summarized below:
·
2006 – Redefinition of the vision, mission and
strategic objectives of the Group, and as a consequence, a new competency map
for every function and individual was put in place.
·
2007 - AU emerged lead by the Group President and the
HR General Manager. The following steps were followed:
o
A
definition and scope of organizational learning,
o
BU and
AU responsibilities’ allocation,
o
CT key
processes set up, and finally
o
CU implementation
issues and the leaders’ role definition.
·
Critical
points were considered to enhance the expected results: Organizational
alignment with business strategy; people performance improvement throughout the
value chain; and learning acquisition time enhancement to optimize costs.
·
As
with every new process, AU was aligned to the existed HR processes, improving
actual competencies and developing new ones.
·
Through
the educational and training reengineering the following soft skills were
developed: leadership, business, change, management and initiative. Industry
skills were also developed, as well as others to improve employees’ careers
within the organization (e.g.: special programs for young professionals, middle
and management development).
·
Three implementation
scenarios were raised. The first one (operative stage) was more connected with
organization of courses, efficiency and, to a lesser extent, with the global
strategy. The last one (strategic scenario) identified that AU was the
company’s knowledge backbone through generation, transfer and retention of
skills necessary to build competitive advantage.
·
A long
implementation lead time of 3 years was established but the higher priority was
assigned to the fact that the entire organization should accept AU principles
and practices, not being fixed to tied implementation schedules. There were 3
phases defined, each of which would be accomplished in one year, as follows:
o
Development
phase: This step was crucial to introduce AU to the organization and obtain
each executive’s support to the project. The main tasks of this phase were to:
§
Validate
the proposed model
§
Align
contents with the competency model
§
Develop
a methodology to assess and certify consultants, trainers and programs
§
Select
skills’ specialists to better control education
§
Develop
specific curricula
§
Contact
the right suppliers/teachers
§
Design
corporate programs and web site
o
Implementation
phase: Students’ enrollment was the start up point. The AU training should
agree with the new and broader scope that was defined. The most significant
tasks of this phase were to:
§
Publish
the corporate educational offer
§
Assemble
an annual training calendar
§
Deliver
corporate programs
§
Publish
the training process guidelines (budget, student’s enrollment, etc.)
§
Launch
AU progressively and validate its programs
§
Implement
a training evaluation system
o
Consolidation
stage: This stage involved a huge risk as all the effort invested in the prior
two stages could vanish. Thus, Arcor defined the following tasks for this
sensitive stage:
§
Managing
the continuity of corporate programs
§
Renewing
and extending each offer periodically
§
Certifying
and re-certifying suppliers/providers
§
Auditing
the designed programs; and knowledge base management
The
next stage was the Schools of Specialization; they would expand and deepen the
knowledge of certain topics within Arcor. At the moment of our review, there
were not many details on this subject (CHIVERS, 2000).
·
IT
tools were needed to carry out AU implementation. A platform was built which
included features such as a newsletter, surveys, digital library, photo
gallery, etc. All this enhanced the individual learning process, generating
ongoing communication on training programs. This platform was autonomously
managed by HR, not depending on programmers for updates and modifications.
·
Convinced
about its benefits, Arcor provided the funds for AU. As a result, profits were
not their objective, but instead efficiency and service to the
organization.
·
Courses
were in association with TUs or specialists, and were delivered online
(e-learning) or in classrooms. After manager’s approval, each employee could
sign up for a course.
·
The
following results show how successful AU was:
o
When
the AU began in 2008, 9 hours per capita was the average man/hours of training.
In the period 2008-2011 this figure dramatically increased by 144%.
o
The
proportion of classroom courses versus e-learning remained constant when
comparing years 2008 and 2009. In 2008, a total of 38,638 hours were invested
in the various programs, of which 33,098 (86%) correspond to classroom courses
and 5,540 (14%) to e-learning. In Jan-August 2009 the total hours invested were
13,381, of which 11,198 (84%) correspond to classrooms courses and 2,183 (16%)
to e-learning.
These
results are better shown in the following tables:
Table 1: AU results[4]
AU’s
implementation is possible to be seen as a process, with its inputs/outputs,
and implementation scenarios and lead times schedule, as per the following
diagram:
Diagram 1: AU implementation details
4.
SPECIALISTS INTERVIEWED
Specialists were interviewed to expand and deepen our
analysis, allowing us to gain more insights on the corporate and traditional
educational environments.
E. Gore (a recognized corporate training specialist and
University Professor) suggested that the CU has not been more developed as
Argentinean industry was not highly developed and, also, for political and
economic reasons. Additionally, he pointed out that, in these kinds of
environments, what a company does is not limited by conviction, but by
restriction. As a consequence, their goals are a result of these restrictions,
hampering future development and growth (DEALTRY, 2001).
While comparing the TU with the CU, some experts pointed
out budget and investment differences. They understood that TUs in LA have been
through difficult processes over time, linked to strong
political-social-cultural-economic (PSCE) fluctuations, which have had great
influence on inward FDI[5]
and its development potential. Those fluctuations/restrictions are in line with
what Gore remarked on Argentina as a developing country (VILTARD, 2014).
A
group of specialists considered that the CU complements what is taught at TUs
and enhances what TCTDs are doing. Also, they said that CUs are focused on more
practical content directed to performance and organizational improvement while
the TU focus was on more theoretical matters. As a result, it was understood that there were areas
of improvement for TUs and CUs, and role redefinition was a must (MEISTER, 2000).
An interesting point of view remarked that both the TU
and CU were struggling against standardization and differentiation. The TU
tends to standardize skills in a greater number of people, so that their
education has a much lower intensity when compared with the CU. In turn, the CU
seeks differentiation in specific skills for a small number of individuals, so
that its intensity is much higher (KERKER, 1999).
The CU was seen as giving high potentialities when
handled as a dependent BU of major corporations. This dependency implied the CU
as a liaison with HQ on policies and strategy but, also, CU self-financing and
its non-discretionary resources management (DEALTRY, 2000; CHIVERS, 2000).
Interviewed
specialists also suggested that a CU’s benefits were to develop and transfer
global business visions throughout the entire organization through the strict
connection of classrooms activities with everyday tasks. It was reinforced by
the location of the CU near the HQ, guaranteeing understanding, acceptance,
dissemination and stronger commitment to policies and strategies within the
whole organization[6].
Specialists interviewed agreed that continuing education
becomes essential for talent employability and organizational growth. But there
were different opinions on continuing education; some preferred isolated or
sporadic educational proposals, while others thought that centralized and
holistic approaches, aligned to strategic and long term views, were more
comprehensive[7]. So, it was indicated that
the CU could help to combat an individual’s isolation caused by factors such as
daily work pressures, and not participating and sharing plans at all
levels.
In
this sense, another investigation[8]
identified that the most frequent reasons given for CU implementation were
linked to the need for a central space for learning; knowledge and culture
dissemination; developing a company’s sense of belonging; promotion of a
discussion forum and common language for business; competitive advantage
creation and maintenance and, finally, the education and training of internal
and external people.
Also,
specialists reinforced the idea that the CU could benefit strategic, business
and operational development and continuing education through everybody’s
participation and collaboration.
In our opinion, and facing exasperated knowledge
obsolescence, the CU could be the liaison between top management and employee
initiatives, and continuing education is a must for organizational and
individual growth. Thereby, the CU could be seen as the environment where
strategic and operative changes could happen.
As a
consequence, specialists visualize that the leader's job was focused on
obtaining value propositions through the participation of the greatest number
of people. They concluded that talent depends on issues such as innovation,
negotiation, communication and leadership, which represent assets that an
updated professional must offer and that the CU can help to develop. At this point, we agree with Senge (1990)[9]
when he indicated that learning organizations are not a fad, but a new
perspective on practical knowledge. The CU could be seen as the place where
learning organizations emerge.
As a
summary, we propose the following table in which we remark CU positive and negative
signs, and risks involved:
Table 2: CU positive and negative signs + risks
involved[10]
|
Positive
signs |
Negative
signs |
Risks |
|
CU handled as a BU as a
central space of learning acquisition and distribution. |
Emerging countries’ industry with strong PSCE fluctuations. |
Continuing education for talent employability and
organizational growth. |
|
CU develops and transfers global business visions and strategies. |
Firm’s goals are set up limited by restriction, not
by conviction. |
The limits of standardization and differentiation. |
|
CU helps in participation
and collaboration. |
Budget and investment difference between TU and CU. |
Isolation and knowledge obsolescence. |
|
|
|
|
The
purposes of corporate university include (1) as reinforcing and perpetuating
current cultures and competitiveness; (2) as agents to manage and implement
change; and (3) as a force to drive and shape the future strategy of the
organization. (FRESINA, 1997) The authors may check if there are
any differences/ similarities in CU positive and negative signs between AU and
previous literature.
5.
CONCLUSIONS
The CU was not a widespread concept in Argentina, where
additional inconveniences were faced when compared to developed countries.
Thus, complex and competitive situations were hampering growth and the
competitive environment in developing countries like Argentina[11].
Few leaders had the opportunity to be focused on long term projects, as short
term projects were the most considered in the vast majority of firms.
Knowledge and competencies were managed with sporadic and
not centralized and integrated procedures. Within the Argentinean corporate
tradition, Grupo Arcor was an atypical reality, as it had been a vigorous and
responsible business player for long time. A clear direction and mentality has
driven their results, showing that, under certain conditions, AU was
feasible in this context.
Arcor implemented AU when the firm reached a certain size
and was seeking further expansion in the international markets. It was not
possible to say that their particular industry favored AU implementation. Their
clear strategic definition and alignment to functional competencies had been
the start up of this project.
The objectives, as a focal point for AU, covered
strategic change supported by learning; common culture widespread; knowledge
transfer/retention; competitive advantage creation; and operational
efficiencies, as the most relevant noted.
AU has proposed new alternatives for CT, enhancing
individual skills and abilities, and market positioning.
Responsibilities were a focal point in AU implementation.
That is why, BU, AU and leader’s responsibilities were defined in order to
embark every executive and every employee on the new direction.
The performance management system provided an individual
source of information that AU would turn into key elements for organizational
success. As a consequence, AU was defined, not only as an educational
institution, but also as a strategic business tool which would improve the
individual and collective learning.
To improve results, AU’s new processes were linked and
articulated to those that already existed in HR (selection, performance,
climate survey, compensation, transfers, etc.).
As change should be generated from each individual, it
was necessary to start with an inventory of skills, training and performance
for everyone. As a result, the training offer (based on soft skills such as
leadership, business, change, and initiative) should meet the individuals’
current and future needs, in accordance with company objectives.
AU implementation solved HR and many operational
problems, and brought synergies to Arcor (for example: AU and BU roles
separation, policies and monitoring on CT). Moreover, AU supported operational
issues generating:
·
Comprehensive
visions of the problems and quality standards,
·
Standardization
of key processes, skills development and training policies,
·
Reducing
inefficiencies and redundant activities.
As a consequence, AU was approached as an organizational
economy of efforts and, also, as a way to release new energies to be applied
for creative and far more constructive matters.
It
used a mixed educational method (classroom and online), as a way to reach as
many internal students as was possible, offering them availability and
flexibility.
Stage certifications and key performance indicators were
vital for AU follow-up and improvement. The Schools of Specialties indicated
that there was a need for a deeper knowledge and that the project would not
stop.
Financially, AU was considered
as a cost center, a service to other
BUs, with an annual budget; it was not for
profit, but instead was directed
to knowledge and educational results. Although we believe that this approach represented a
concrete support to AU, we could also argue that if top management would allow
its self-sufficiency in a period of time; this would have meant a more
growth-oriented external positioning. However, we emphasize that each company
must define its CU funding without preconceptions, as this decision is related to
complex and individual factors.
The AU success story has come from a strategic plan
definition, which has recognized the entrepreneurial spirit and top management
commitment. As a result, AU has provided tangible benefits to Arcor and surely,
more firms should follow its path.
It was discovered that such a mentality and a dominant
logic tied to old patterns influence the acceptance and implementation of long
term new projects in emerging countries like Argentina. But as a result of our
analysis, the CU appeared to be applicable and valid in this environment, under
certain conditions. It was also identified that the CU complements what TUs and
traditional educational programs (e.g. TCTD and PS), contribute to a
more practical content directed to performance and organizational improvement.
Through
this investigation there were elements that provided a better understanding of
the CU implementation context in Argentina, enhancing the actual corporate
educational paradigm and talent employability (continuing education).
As a
result, the CU is not related to emerging or developed countries, or specific
industries, but has limits and influences on CTs, TUs and TCTDs.
Finally, throughout this investigation the hypothesis was
confirmed and the objectives verified.
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J. (2000). Corporate Universities:
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