The Impact of Management Development on The Organizational Performance of European Firms

Although management development is generally regarded as a key element in a strategic approach to human resource management, there is still little empirical evidence that this it actually contributes significantly to superior firm performance. Based on interviews with the HRD manager and a line manager in a sample of 601 organizations in six European countries, this study examines the impact of management development policies and practices upon firm performance. Predetermined factors like the sector, size and host-country of the firms explain a significant amount of variance in performance. However, the degree of variance explained is considerably enhanced when discretionary variables are added. In particular when firms report strategic fit for their a progressive human resource managementcontext, organization fit for their pursue a positive management development ethos and when line managers perceive their firm to be attaching importance to management development, they significantly out-perform their competitors.