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  • Subject area(s): Business
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  • Published on: 21st September 2019
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1.1. Background

Small and Medium Enterprises (SMEs) have been key drivers of several economies worldwide (Harris, Aziz, & Norhashim, 2012). In developing countries, SMEs have been vital to the creation of jobs in the labor markets (Bhatti, Syed, Shah, & Shaikh, 2012), where it was engaged in a continuous process of seeking strategic options, which may have provided them with a competitive advantage in the local market. The drive to achieve competitive advantages may explain why SMEs possess the motivation to acquire new skills to improve their performance (Salim & Sulaiman, 2011). The propensity to acquire new knowledge and skills may be a tendency of firms to adapt to their market requirements. In competitive markets, innovation and learning have been essential strategies for the survival and growth in small and medium firms (Varis & Littunen, 2010).

A leadership development program is one of the most popular methods of developing managerial and leadership skills within an organization.  Organizations are committing to training and development to enhance their leadership potential (Conger & Benjamin, 1999).  Fulmer (1997:60) highlighted that many organizations are trying to make leaders “who are capable of helping the corporation shape a more positive future”.  A report by Bersin and Associates indicates that U.S. organizations increased investments in leadership development by 14 percent over 2011 figures to an estimated $13.6 billion in 2012 (O'Leonard & Loew, 2012).

The process of leadership development and management is a continuous and integrated activity, where the success of any stage depends on the proper preparation, training and rehabilitation, which is of paramount importance in the process of leadership development, which requires careful attention in planning, implementation, follow-up and evaluation, to ensure the achievement of its goals and objectives.

1.2. Problem Statement

Training, as part of human resource development, is becoming increasingly important, it requires a substantial allocation of financial, human and time resources. Yet despite the substantial investment of valuable resources, the information and skills that are gained in training may never actually be applied in the workplace (Donovan, Hannigan & Crowe, 2001).

In Saudi Arabia, the process of economic and social reconstruction has harnessed capital, organized labor and state agencies. Increasingly more public policies on human resource development and diversity has been formulated. The task facing Saudi Arabia is to find creative solutions for integrating economic growth and human resource development. Thus, the need to develop internal employees in line with labor legislation has required the organizations where research is conducted to develop a structured training program.

Small and Medium Enterprises in Saudi Arabia contribute to the GDP by only 20% compared to 70% of some other economies. Despite the efforts to improve the quality of the business environment, small enterprises in the Kingdom continue to suffer from a complexity of regulatory and administrative procedures, slow capacity, poor capacity to attract talents, and difficulty in obtaining funding.  The proportion of funding for small and medium enterprises is only (5%) of the total funding, which is a small proportion compared to global rates. We will seek to help these enterprises to obtain funding and urge our financial institutions to increase the funding to 20% by the year (1452 AH - 2030 AD). Small and Medium Enterprises General Authority seeks to establish more business incubators, training institutions, to help entrepreneurs develop their skills and innovations. (www.smea.gov.sa)

Saudi Arabia efforts to take its SME leadership to the next level, as it will offer innovative training to entrepreneurial talent across the Kingdom, eventually enhancing the role of SMEs in economic development. This will lead to a stronger support system for SME owners and future entrepreneurs and ensure that they have the necessary skills and experience to succeed.

The developing program aims to provide existing and potential entrepreneurs with the skills and knowledge they may need to become future business leaders.

The King Salman Program for Human Capital Development will establish HR centers of excellence in every government agency, and provide training. They will work to raise the productivity of employees to the highest levels possible, by implementing proper performance management standards, providing continuous training for professional development, and sharing knowledge. They will develop targeted policies to identify and empower future leaders, and will furnish a stimulating environment that provides equal opportunities and rewards for excellence.

It will have also to identify and put into effect the best practices that would ensure that public sector employees have the right skills for the future. However, by 2020, they aim to have trained, through distance learning, 500,000 government employees. All ministries and government institutions will be required to adopt best practices in human capital development. They will continue to hire individuals according to merit and work towards building a broad talent base, so they will become leaders of the future. (2030 Saudi Vision document, 2017)

1.3. Research Questions

 Q1: What is the degree of application of Reddin's Three Dimensions Leadership Theory in SMEs in Saudi Arabia

 Q2: Is there a significant difference on Performance (Task completion, Relations, Leadership Effectiveness) due to the 3-D leadership development program (Situational Management, team management, Output Management).

 Q3: Is there a significant difference on Performance (Task completion, Relations, Leadership Effectiveness) due to the demographic variables (Position, Sex, Years of Experience, No. of training courses taken, Education Level)

1.4. Research Objectives

The aim of the research study is to explore whether the leadership development program has any effect at the individual and organizational levels.  To reveal an effect of the training program. We will investigate how the leadership development program influenced three leadership competencies of trainees and evaluate the results of effectiveness on the (Task Oriented, Human Relations, and the leadership effectiveness) based on the 3-D theory.

Owing to the cost involved in this program, the human resource development section is required to demonstrate the effectiveness of the program in measurable terms. The results of the scientific research conducted on the effectiveness of the developed training program can justify the cost in terms of capital investment, and would determine the future use of similar training programs.

To achieve this aim, this study will target the following objectives:

1. To develop a leadership training program

2. To apply the developed program

3. To evaluate the results of the training program

1.5. Scope of the Study

The main idea of the development programs is that participants will apply what they learn to their jobs in order to achieve greater performance outcomes.

In order to ensure that the findings of this study are practical and applicable, we recommend demarcating and focusing the study as follows:

 A literature review dealing with Leadership development theories, and recommend one theory for adaption.

 A literature review dealing with the development, application and evaluation of training programs.

 A literature review dealing with SME’s Human development programs in Saudi Arabia.

1.6. Significance of the Study

The findings of the present study will benefit both the knowledge and practitioners as follows:

1. Contribution to Knowledge

Findings of the research will add to the knowledge and understanding of the subject of Leadership, and build skills and capacities around the leadership competencies.

Regardless of growing spending on leadership development programs, experts delineate the lack of evaluations of the effectiveness of leadership development programs (Day, 2000; Sogunro, 1997). Burke and Day in their meta-analysis concluded that the majority of organizations ignore the effect of training programs on job performance improving (Collins, 2002). Thus, the ‘hard’ organizational level is extremely important in terms of the evaluation of effectiveness. Transfer to the organizational level, including task completion and human relations, complicated this objective substantially. In this context, the effectiveness of a leadership development program has become more complex and required strong methodology and appropriate methods.

This study will help leadership experts and scholars to go further in exploring the outcomes of leadership development programs, especially at the organizational level.

2. Contribution to Practitioners

The main idea of the development programs is that participants will apply what they learn to their jobs in order to achieve greater performance outcomes.

A well-designed leadership development program requires systematic focused improvement over extended periods to reflect on and reconsider important findings (Spencer, 2011). The design of leadership development programs is targeting to build the leadership capacities of participants, and apply it in their jobs. This will lead to a stronger support system for SME owners and future entrepreneurs and ensure that they have the necessary skills and experience to succeed. The developing program aims to provide existing and potential entrepreneurs with the skills and knowledge they may need to become future business leaders.

1.7. Assumptions, Limitations, and Delimitations

The following sections include information about the assumptions, limitations, and delimitations of this study. Assuming the selected HR managers in this study are aware of organizational strategies is fundamental to acquire useful information on strategic human resource management. This study was limited to human resource managers of SMEs in South Saudi Arabia. A key delimitation in this study related to purposeful sampling of human resource managers, narrowing down the demographic of participants and yielding focused information on the study.

1. Assumptions

One fundamental assumption for this study was the participants are aware of the strategic choices made by their firms in dealing with the compulsory policy of Saudi Arabia and its derivative labor regulations to create future leaders.

Conducting a case study will help in retrieving meaningful information about the strategic options of SMEs toward the national policy of Saudi Arabia. Moreover, interviewing a small sample of human resource directors shall provide insights to accompany the conceptual foundations associated with the principal research problem. Ethical and unbiased interpretation of the interviews might be an important assumption in this research.

2. Limitations

According to Marshall and Rossman (2011), limitations can differ from one subject to another in qualitative research. A number of factors will limit the scope of this research. The geographic scope of this study will be limited to South Saudi Arabia. The study will also be limited to HR directors working in Saudi SMEs. The research only will include analysis of local SMEs operating in Saudi Arabia, which means other industries may not consider this research useful since the labor market structure and requirements differ from by industry. An additional possible limitation to this study may stem from the various experience levels and backgrounds of the participants. My work background in human resource development may also lead to biased conclusions in this study since I have explored several procedures and techniques applied by some firms during some stages of my work as an executive manager.

3. Delimitations

Delimitations in social science research relate to narrowing the scope of research by identifying the factors and parameters excluded from the research (Podsakoff, MacKenzie, & Podsakoff, 2012). A key delimitation in this study associated with the homogenous purposeful sampling applied for the selection of the participants. Hence, participants in this research will be HR directors with knowledge in the key HR practices and strategic solutions adapted by their firms. The participants of the study worked in SMEs in Saudi Arabia. Therefore, participants who have worked in public sectors will not join this research to avoid the analysis of the recruitment criteria associated with the public sector in this study.

1.8. Organization of Chapters in the Study

Chapter Two: Literature Review

In this chapter, we will present comprehensive theoretical review of Leadership theories and Leadership development theories, in addition to Empirical review of evaluating leadership development programs.

It will present some of relevant Arabic and English studies that have issues related to the leadership and training.

Chapter Three: Research Methodology

This chapter will present the research methodology used in this study includes research methodology, study design, research approach, action plan, variable, study sample, data collection, statistical tools & techniques that will be used in this study .

Chapter Four: Data Analysis and Interpretation of findings

This chapter will present the study questions, discuss the results, and describe the characteristics of the study sample in details.

Chapter Five: Results and Recommendation

The last chapter will present the main findings and recommendations reached by this study.

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