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Corporate Universities
 

   10/1/2007

Fast Fact

In response to current employment trends, 66% of organizations are either increasing or planning to increase spending on learning and training initiatives.

Source: SHRM® 2006 Workplace Forecast, www.shrm.org/trends.

Introduction

Experts estimate that there are more than 2,000 corporate universities (CUs) in the United States, either centrally located or operating as virtual universities.1 The number of CUs is growing: currently, 29% of organizations are establishing a corporate university or planning to do so.2 Due to today’s aging workforce, HR professionals look to corporate universities as an effective way to develop, attract and retain much-needed highly specialized workers. Most importantly, in today’s knowledge economy, companies turn to CUs as a vehicle to create, distribute and manage knowledge. The CU phenomenon is an important tool to help HR strategically manage talent.

CUs—Strategic Drivers of Organizational Learning

A corporate university is a function or a department that is strategically oriented toward integrating the development of people as individuals within the organization, as well as facilitating organizational learning as a means to achieve and sustain competitive advantage. CUs accomplish these goals by 1) managing the delivery of content; 2) conducting wide-range research; 3) spearheading the leadership development and succession planning efforts;3 4) encouraging business innovation;4 5) reinforcing organizational culture; and/or 6) supporting change management initiatives.

Unlike traditional training and development programs, which may be used to address skills gaps, corporate universities offer opportunities for development with a strategic focus, reflecting company priorities and anticipating change. A CU aims to have an impact on decision-making at the senior level of an organization.5 However, research suggests that CUs may go through several phases before reaching this strategic level (see Figure 1).

Figure 1: Phases of Corporate Universities (CUs)

Features

Operational Phase

Tactical Phase

Strategic Phase

Type of CU

“Advanced training department”

“Knowledge back-bone”

“Knowledge factory”

Goal

Efficiency

In line with organizational goals

Surpass competition

Relation with strategy

Indirect and reactive

Direct and reactive

Direct and proactive

Main activity

Centralizing training activities within the company

Building courses based on organizational strategy

Development of strategy by training and research

Source: Adapted from Jansink, F. (2005). The knowledge-productive corporate university. Journal of European Industrial Learning, 29(1), 40-57.

Corporate universities have undergone substantial transformations since the 1950s, when General Electric first founded “Crotonville,” the GE Leadership Center, to train its managers.6 While the first CUs were mostly less expensive in-house alternatives to traditional education, today CUs are collaborating with traditional universities to create custom-designed training programs, such as coaching, simulations, in-class and online education.

Some researchers consider corporate universities to be the most significant business intervention in organizational development in the last two decades.7 For example, CUs have been linked to increased employee engagement and productivity.8 Moreover, they can improve recruitment efforts, reduce turnover, facilitate employee advancement and increase the organization’s talent pool.

Corporate University Best Practices

Drawing from the experiences of effective corporate universities, researchers and experts agree on certain conditions necessary for the success of CUs (see also Case Study):

      • Have the financial and strategic support of executive management.9 To have a voice in the development of organizational strategy, CUs need to closely collaborate with executive leadership. Senior management and key organizational leaders can be invited to provide input in the vision and strategy of the CU as a way of obtaining their buy-in.

      • Develop a well-defined mission and learning goals, as well as a clear business plan, in line with the company strategy.10

      • Encourage employees to take advantage of learning opportunities by establishing a strong internal marketing program.11

      • Employ a high degree of online instruction to make training available “nonstop,” but retain classroom instruction for topics that require a high degree of participation (e.g., soft skills and leadership development).12

      • Design assessment processes. Since assessment plays a central role in demonstrating the value of the CU, evaluations should include the impact of CUs on business results, behavioral changes, acquisition of certain skills and learner satisfaction.13

CASE STUDY: “The Learning Center”

A well-known beverage company boasts of its “learning center” (a corporate university), located at the company headquarters. The center is a meeting place for brainstorming, learning and sharing knowledge. It also carries out research on organizational issues. For example, last year the center investigated topics ranging from the effectiveness of virtual teams to the changing leadership demands on management. Every year, the center hosts the ‘finals’ of the Company Business Challenge—an annual simulation played by 200 employees who run an imaginary virtual company as a way to understand the subtleties of organizational management.

Source: Adapted from Pollitt, D. (2005). Heineken toasts successful recipe for management training. Training & Management Development Methods, 19(2), 6.13-6.15.

According to research, the effectiveness of a corporate university also depends on the quality of its instructors. While hiring specialists from outside the company can be beneficial, certain experts recommend training company employees to serve as subject matter experts whenever possible.14 This approach not only cuts costs but also makes use of current knowledge while obtaining employee buy-in and creating a sense of accountability and ownership.

Additionally, research indicates that building the right team to lead the CU plays a crucial part in its success. Experts recommend that every department, from marketing to maintenance, be represented on the team. To obtain large-scale support, it may be beneficial to create a “sponsor group” of non-HR leaders who serve as advisers and difficult decision-makers for the CU.15

The Ups and Downs of E-Learning

E-learning—defined as “any learning activity supported by information and communication technologies”16—has been gaining support as a flexible, convenient and cost-efficient solution for disseminating knowledge and building skills. According to the SHRM Workplace Forecast, 71% of organizations are currently making or planning to make a greater investment in e-learning.17 Corporate universities widely use e-learning, to the point that some are entirely virtual entities operating online. Besides providing information, e-learning can include simulations and scenarios, explanatory animations, video and audio clips, interactive exercises and self-assessments.

The main advantages of e-learning are its low cost and flexibility in delivery. Through e-learning, the company is able to save money in travel and time spent away from the job. Furthermore, e-learning provides an organization with an unparalleled ability to deliver training on a large scale, over time, with few additional costs.18 Users also appreciate e-learning because of flexibility in the pace of learning.19

However, e-learning is not a panacea for all training purposes and organizational contexts. Research findings indicate that because of its reliance on self-instruction and self motivation, high degree of isolation and the technical skills required, e-learning may not be suitable for all learners. Therefore, researchers advise that effective e-learning programs be accompanied by online support and learner assessment. Most importantly, while e-learning might be adequate for communicating facts, in some cases, highly interactive and complex areas might be better accomplished through face-to-face training.20

Literature and Research

Corporate Universities: A Catalyst for Strategic Human Resource Development?21

Corporate universities have become a widespread phenomenon in human capital development. Using a case-study approach, this study aimed to explore whether corporate universities are emerging as a simple re-labeling of the functional training area or as a key strategic platform to develop organizational competitive advantage. Findings indicated that the case-study corporate university fulfilled a strategic role in the retention, development and productivity of human capital in its organization. The corporate university programs were developed and implemented in close connection with the organization’s strategic objectives. For example, the university offered courses leading toward professional accreditation for the company’s employees, facilitated career development opportunities and encouraged the development of higher-order critical skills required for managerial positions. In doing so, the university contributed to succession planning, leadership coaching and professional development—all key factors in organizational strategy.

The Knowledge-Productive Corporate University22

In the current knowledge economy, corporate universities aspire not only to distribute knowledge among employees but also to offer organizations a competitive advantage by developing strategic knowledge. This study investigated to what extent corporate universities accomplished this aim of knowledge production and looked how they generated new knowledge. It identified several characteristics that helped corporate universities produce knowledge. These characteristics included 1) the connection between learning and strategic organizational goals; 2) employees’ ownership of their own learning; 3) organizational support of “learning by doing;” and 4) employees’ feeling that they are being challenged and encouraged to improve their organization. Results from two studies revealed that while the production of knowledge in corporate universities was considered important, concrete measures to stimulate knowledge were often absent. For example, new knowledge created in the classroom did not always lead to changes in current work processes, procedures or strategies. The authors recommend that strategic knowledge production in an organization be supported by both the learning and working environments.

The Implementation and Use of E-learning in the Corporate University23

Corporate universities of the latest generation are increasingly virtual organizations, defined by the use of new technology for learning. E-learning is widely used as a means to achieve cost effectiveness and delivery flexibility. However, past research has warned against promoting innovative technological fads at the expense of pedagogically sound training. This study reviewed the use and implementation of e-learning and explored some of its challenges in organizations across multiple sectors. Findings revealed that effective e-learning required a significant investment in technological capability, as well as a focus on the quality of learning (pedagogical design). Unfortunately, oftentimes cost concerns in organizations lead to sub-par e-learning programs. In this context, researchers suggest that the assessment of e-learning success include an evaluation of learners’ experiences. Moreover, the study found evidence that organizational culture played a significant part in e-learning effectiveness. The study advocates that the implementation of e-learning requires a strategic change management approach, preparing the organization for the shift in training style.

In Closing

HR has long moved from an administrative role to that of strategic partner and facilitator. By managing an effective corporate university, the HR department can strategically contribute to leadership development, employee engagement, talent management, organizational change and corporate innovation, which can all be significant sources of competitive advantage.

Online Resources

American Society for Training and Development: www.astd.org

Best Practices, LLC: www3.best-in-class.com

Corporate University Xchange: www.corpu.com

Global Learning Resources: www.glresources.com

Society for Human Resource Management: www.shrm.org

Endnotes

1 Knight, R. (2007, March 19). Move to a collaborative effort. Financial Times, p.2.

2 Schramm, J. (2006, June). SHRM workplace forecast. Retrieved July 20, 2007, from www.shrm.org/trends.

3 Walton, J. (2005). Would the real corporate university please stand up? Journal of European Industrial Training, 29(1), 7-20.

4 Rademakers, M. (2005). Corporate universities: Driving force of knowledge innovation. The Journal of Workplace Learning, 17(1/2), 130-6.

5 Wheeler, K. (2005, April). How is a CU different from a training and development function? GLR Newsletter. Retrieved July 17, 2007, from www.glresources.com/news/04_20_05.html.

6 Strategy by degrees. (2005). Development and Learning in Organizations, 19(3), 26-29.

7 Jansink, F. (2005). The knowledge-productive corporate university. Journal of European Industrial Learning, 29(1), 40-57.

8 Knight, R. (2007, March 19). Move to a collaborative effort. Financial Times, p.2.

9 Laff, M. (2007, January). Centralized training leads to nontraditional universities. T+D, 61(1), 27-29.

10 Ibid.

11 Pollitt, D. (2005). Heineken toasts successful recipe for management training. Training & Management Development Methods, 19(2), 6.13-6.15.

12 Corporate university excellence: Creating a robust and flexible workforce. Best Practices, LLC. Retrieved July 25, 2007, from www3.best-in-class.com.

13 Kirkpatrick, J., & Hawk, L. (2006). Curricula and evaluation: Maximizing results. T+D, 60(6), 61-62.

14 Weinstein, M. (2006, July). What can a corporate u do for you? Training, 43(7), 34-38.

15 Kraska, B. (2006, September). 7 ways to ensure your CU succeeds. Training, 43(9), p.16.

16 Homan, G., & Macpherson, A. (2005). E-learning in the corporate university. Journal of European Industrial Training, 29(1), 75-90.

17 Schramm, J. (2006, June). SHRM workplace forecast. Retrieved July 20, 2007, from www.shrm.org/trends.

18 Homan, G., & Macpherson, A. (2005). E-learning in the corporate university. Journal of European Industrial Training, 29(1), 75-90.

19 Macpherson, A., Homan, G., & Wilkinson, K. (2005). The implementation and use of e-learning in the corporate university. Journal of Workplace Learning, 17(1/2), 33-48.

20 Ibid.

21 Holland, P., & Pyman, A. (2006). Corporate universities: A catalyst for strategic human resource development? Journal of European Industrial Training, 30(1), 19-31.

22 Jansink, F. (2005). The knowledge-productive corporate university. Journal of European Industrial Training, 29(1), 40-57.

23 Macpherson, A., Homan, G., & Wilkinson, K. (2005). The implementation and use of e-learning in the corporate university. Journal of Workplace Learning, 17(1/2), 33-48.

Project Team
Project leaders:
Raluca Graebner, SHRM Research Intern; Nancy R. Lockwood, MA, SPHR, GPHR, Manager, HR Content Program

Project contributor: Steve Williams, Ph.D., SPHR, Director, Research

Editor: Katya Scanlan, Copy Editor

Disclaimer

This article is published by the Society for Human Resource Management (SHRM). All content is for informational purposes only and is not to be construed as a guaranteed outcome. The Society for Human Resource Management cannot accept responsibility for any errors or omissions or any liability resulting from the use or misuse of any such information.

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