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Process Units

Process units of the theory relate to the environmental units of the theory and the complex interaction these have with the organisational system units and input units to influence the output units.

Nature of competition: For the purposes of this study, competition is defined in terms of its intensity (from high to low) on the basis of price or quality. Numerous authors have identified the influence of competition on the provision of enterprise training (Ergas & Wright, 1995; Hayton et al., 1996).

Enterprise size: This unit of theory is defined as the number of employees in an enterprise. Extant literature suggests a strong relationship between enterprise size and the nature and extent of training provision (Hayton et al., 1996; Ridoutt et al., 2002). The relationship between enterprise size and training activity is not linear, that is, small enterprises do little training and large enterprises do more training. Rather, the training activity is context specific and is expressed in different ways in each organisational situation. For example, an individual worksite, which is part of a larger organisation, may have differing training demands than the organisation as a whole (Hayton et al., 1996). In other cases, it is argued that small- to medium-sized enterprises are disadvantaged through this measure, as they do not have an internal person dedicated for training activities, but still provide informal learning in numerous innovative ways (NECA, 1998, as cited in Ridoutt et al., 2002). Research on the Indian IT industry found size to be a major explanatory factor of volume, diversity, and formalisation of training (Malik, 2009; Malik & Nilakant, 2011; Malik, 2015a, 2015b).

Industry group: This unit of theory is defined as per the industry sub-group as specified by NASSCOM and follows the following classification: IT software services; ITeS/BPO services; and IT hardware manufacturing. Industry group/type has been regarded as an important explanatory factor in explaining the nature of enterprise training, rather than its extent, as each industry group organises its training requirements in unique ways (Ridoutt et al., 2002; Smith et al., 2002). Industry subsector was noted as a key factor in the Indian IT industry in explaining the nature and extent of skill formation and training. For example, BPOs typically investment in more volume and diversity of training, relative to IT services and product development firms. Furthermore, the frequency of ongoing training was much higher in BPO relative to IT technology firms (Malik, 2009, 2015a, 2015b).

Ownership: This unit of theory defines the ownership profile of the organisation as per the following ownership categories: public limited, private limited, government owned, multinational corporations, and Indian joint-venture multinational corporations. Ownership of enterprises also has an effect on the level of enterprise training. Yadapadithaya (1999) found that ownership patterns significantly influences an organisation’s perception towards competition. This is likely to have an effect on its response towards workplace change, and consequently, on enterprise training. There was little differentiation noted by way of ownership as an explanatory factor in the provision of training in Indian IT industry (Malik, 2009, 2015a, 2015b).

Strategic HRM practices: This unit of theory is defined as organisations with a strategic approach to its HRM practices (Fombrun, Tichy, & Devanna, 1984; Kane, Abraham, & Crawford, 1994). To this end, the presence of a strategic approach to HRM will be analysed by considering the following aspects of SHRM: importance of skills in the recruitment process, measuring HR performance, the use of competencies, transferability ofskills to other organisations, and the level ofskills in the organisation. Wright and McMahan (1992) argue that human resources can improve the performance of an enterprise by developing those skills and attributes that cannot be easily imitated by its rivals, thus giving the firm a source of sustained competitive advantage. The nature and extent of SHRM practices had a profound impact on the skills formation and training decisions of IT, BPO, and ITPRD firms in India.

Permanency of workforce: Unit of workforce permanency is defined as the percentage of permanent full-time, part-time, casual, and contract employees in an organisation. Extant literature suggests that workforce permanency encourages a higher investment in training (Groot, 1997). Ridoutt et al. (2002) found that workforce permanence to be significantly and positively related to a number of training activities, such as training diversity, external reliance, formalisation, learning support, and individualisation. However, there was no relationship observed between workforce permanency and the volume of training. In terms of casual and part-time workers, research from OECD countries (OECD, 1999) suggests that these employees receive less training than their full-time and permanent counterparts.

Workforce composition: This unit of theory is defined as the percentage of an organisation’s employees in three occupational groups, namely stra- tegic/managerial group, operational/technical group, and administrative/ support group. Hayton et al. (1996) termed this variable as ‘occupational structure’ to measure the proportional difference between professional/ managerial and other occupations and found this variable was related to the volume of training and the engagement of training reform agenda. Hayton et al. (1996) also found a significant relationship between occupational structure and reliance on external training sources and individualisation of training decision-making.

Employee mobility: This unit of theory is defined as the percentage of employees who have left the organisation in the last 12 months. Extant literature suggests that the IT sector is characterised by high employee mobility rates and is faced with issues related to retention and career development (Carton et al., 2004; Taylor & Bain, 2004).

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