Evolution of and Current Trends in Training by Allison Reynolds - Journal of Business Economics

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Journal of
Business and Economics
Volume 4, Number 8, August 2013
Contents
Business Administration and Business Economics; Marketing; Accounting
Evolution of and Current Trends in Training 675
Allison Reynolds, Henry Findley, BethanyDavis, William Belcher
Leadership Success or Failure: Understanding the Link between Promotion Criteria
and Leader Effectiveness 690
Mike Stutzman, Tracy K. Tunwall
An Exploratory Study on Private Label Brand Knowledge and Consumer Loyalty 695
Ching-Wei Ho
Economic Development, Technological Change, and Growth
Servant Leadership Trends and Impact on Business 708
Oris Guillaume, Andrew Honeycutt
Understanding Innovation: Playing in the Sandbox with Friends 715
Paul T. Skaggs
Has Maritime Transport Sector Impacted on the Growth of Nigeria’s Economy? 722
Christiana Ogonna Igberi, Matthew Babatope Ogunniyi
Economic Education and Teaching of Economics
Merging the Case Method and Simulation in Management Education: Is It Possible? 737
Jorge Alberto dos Santos, Tainá Rodrigues Gomide

International Economics
Economic Contribution of Immigrants 747
Nisha Singh, RajeshwarSharma
Gold Value Movement and Macroeconomics 752
Ananya Seemuang, Suppanunta Romprsert
Case Study
The Role of Ward Committees towards Enhancing Public Participation: The Case of the
Mpumalanga Province, South Africa 761
Enslin Johannes Van Rooyen, Sipho Kenneth Mokoena

Journal of Business and Economics, ISSN 2155-7950, USA
August 2013, Volume 4, No. 8, pp. 675-689
 Academic Star Publishing Company, 2013
http://www.academicstar.us
675
Evolution of and Current Trends in Training
Allison Reynolds, Henry Findley, BethanyDavis, William Belcher
(Troy University, USA)
Abstract: The evolution of training and the impact of technology driving that evolution are discussed. It is
pointed out that changes in computer technology are driving that change. Various methods of training methods are
explained and how they came about or evolved. The more recent computer phenomenon such as social media,
YouTube, and Twitter applications are discussed and applied to training. Recent research is reviewed on the
effectiveness of use of these recent training trends.
Key words: training evolution; training trends; e-learning; YouTube; social media
JEL code: M53
1. Introduction
Globalization and economic shifts are being accelerated by technological changes with the Internet as the
primary catalyst (Mathis & Johnson, 2008). This explosive growth is transforming jobs and organizations and is
not only altering the way they do business, but also the paradigms by which human resource functions are
managed as well.
One recent internet-related phenomenon, social networking, is currently making its imprint on society. Social
networking can be defined as an internet-based social interaction in which users primarily produce, rather than
consume, web-based content known as social media (Mills, 2011).
Currently, social networking accounts for approximately 11% of all time spent online in the United States
(Anonymous, 2010). Facebook has amassed over 500 million users worldwide and its growth remains unabated
(Facebook, 2010). The use of social networks is even creating a metamorphosis in political systems both domestic
and internationally. In the 2008 presidential election more than $66 million dollars were collected via social media
(Livingston, 2010), and social media has been credited with being a central catalyst in continuing political unrest
in the Middle East that has led to at least one government change (Bagley, 2011).
Many organizations, including private enterprises, are now exploring the benefits of social media and other
online technologies. For instance, social media has been shown to be a useful tool in recruiting (Galagen, 2010;
Anonymous, 2010).
Management and human resources can ill afford to lag behind in embracing the Internet- related-technology
shifts that are unrelentingly transfiguring the business environment in much the same way the computer and
Internet did after they were first introduced. To that end, this article investigates the business applications of recent
Allison Reynolds, Analyst, Troy University; research areas: training. E-mail: areynolds71301@troy.edu.
Henry Findley, Associate Dean of Business and Professor of Management, Troy University; research areas: human resource
management. E-mail: hfindley@troy.edu.
Bethany Davis, Management Trainee, Troy University; research areas: training. E-mail: bhdwild@gmail.com.
William Belcher, Chief of Staff, Troy University; research areas: training. E-mail: wbelcher@troy.edu.

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Internet technologies and their applications to training.
2. Historical Perspective
Training has been around for ages. Its earliest roots can be traced back to the Middle Ages in the form of
apprenticeships (Shane, 2012). These evolved into vocational schools in the early 1800’s (Desimone, Werner, &
Harris, 2002). The advent of the mass production and factories further transformed training. Apprenticeship
programs were shortened and what is now known as job instructional training (JIT) was developed around the
First World War (Desimone, Werner, & Harris, 2002). It wasn’t until the twentieth century that training became a
profession and formal training as we know it, became the norm (Shane, 2012; Desimone, Werner, & Harris, 2002).
The work of Fredrick Taylor in the field of Scientific Management in the early 20th century encouraged
companies to create formal training programs and procedures. The idea that best practices could be developed and
used to train employees to be more efficient created corporate education and specialized tools for the first time in
many companies. The instruction was often one directional. For example, an engineering department might develop
the best way to do a job, and then the procedure was required to be followed by all. Methods ranging from the size
of a shovel to how one’s desk should be organized would be dictated in the form of one standard policy.
The 1970’s forever changed training to become what we know it as today. The workplace was filled with
many different types of people: war veterans, Great Depression survivors, and young baby boomers. This forced
employers to deviate from “one type of training fits all” and move towards an individual focused training approach.
As training continues to evolve to become ever more efficient, the workplace will likely never return to an era of
“one training program fits all”. The workplace is even more diversified today than it was in the 1970’s. Luckily, as
technology advances it makes meeting specific training requirements of each employee easier to address.
3. Evolution of Training Methods
A variety of training methods have taken shape over the years. The introduction of the Prussian method of
education to the United States played a critical role in training in the workplace. This system has formed the basis
of much of the traditional educational system in America. It tended to be a body of knowledge communicated
from the top to bottom in a uniform format. While such an educational structure may not create a nation of Steven
Jobs-type leaders, it was a very good system to train the workforce to meet the needs of the industrial revolution.
Lectures/demonstrations are the oldest forms and most traditional means of training. Hence, they are the most
frequently used and relied upon training methods. In their basic form, lectures and demonstrations simply present
information from the trainer to the trainee (Blanchard & Thacker, 2009). On-the-job training (OTJ) is the next most
widely used training process. OTJ is considered another form of traditional training, occurring in the workplace and
consisting of methods such as apprenticeship, internship, mentoring, etc. (Blanchard & Thacker, 2009).
As audio visual enhancements evolved, they also began to provide a means for the trainees to not only absorb
knowledge in a conventional manner, but to also gain insight by exploiting other modalities for conveying
instructional information. In this case, retention is more easily transferred to the job when lecture is supplemented
by visual inputs (Blanchard & Thacker, 2009). Today, audio visuals are made available by computer technology. It
is hard to imagine the workplace, much less employee training, without computer-generated assistance. Low-cost,
high performance, user friendly computers are a fairly recent development. Yet, with recent, rapid advancements,
they have revolutionized the work culture into a more technically sophisticated society.

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4. The Computer Era
It is not clear as to when the first official “computer” was introduced on the world stage, but nevertheless
computers have been evolving for longer than one might think. Simple mechanical devices can be dated from the
early part of the AD era. Charles Babbage, known as the father of the modern computer, introduced the first
automatic engine which computed mathematical calculations in 1822 (Wilkes, 1992). The typewriter was invented
in 1874 with speech through the radio (wireless) breakthrough at the beginning of 20th century (Giudice, 2000).
The work of Howard Aiken and Grace Hopper for the U.S. Navy in World War II on the first electronic calculator
started the dawn of computing as we know it today. While very crude by today’s standards, it was the first baby
steps toward employing the computer as a working tool in business. Nevertheless, over the years, it has
transformed how we live, work, and play. It has also, revolutionized how training is conducted in the workplace.
4.1 Move towards Computer-Generated Training
Companies today rely more and more on computer-generated training such as simulation or virtual computer
training techniques. These types of training become critical especially as companies search for ways to make
training more cost efficient and effective. The military became an early adopter as it became evident that
computer-based training could be much more economical, safer, and effective than traditional methods. Today, a
number of computer-based training approaches have arisen and continue to develop (Blanchard & Thacker, 2009).
4.2 Computer-Based Training/E-learning
Dating back to World War II, computer-based training (CBT), known today as e-learning, found itself most
useful in private industries and the government. “E-learning refers to the delivery of training or education through
electronic media” (Blanchard & Thacker, 2009, p. 265). Presently e-learning has been incorporated into numerous
training programs and modes of delivery, but not all training programs should incorporate an e-learning format.
Instead, training programs should reflect the individual company’s specific training needs (Blanchard & Thacker,
2009). CBT use as simulation has made its way to the forefront of technical breakthroughs during the time of the
Second World War when analog and digital units could compute a number of different mathematical outcomes for
government research such as The Manhattan Project. This technique shifted into military use and continues to evolve.
Simulations represent the manner in which a company may actually function with respect to real world problems and
situations (Blanchard & Thacker, 2009). Effective computer simulations along with games made their debut as the
emergence of the computer age began to escalate and will be discussed more thoroughly later in the paper.
4.3 Programmed Instruction
In the 1950s, B.F. Skinner introduced programmed instruction (PI) with his patented teaching machine.
Initially, his teaching machine would recognize correct answers and progress to the next question. If an answer
was wrong, the machine would explain the correct answer (Magliaro, Lockee & Burton, 2005). Typically,
information to be learned with PI is taught in focused segments. Trainees are tested after each segment of material
is presented. PI has developed more so as technology has advanced. For instance, PI can be seen in the latest
training technologies such as online courses.
4.4 Intelligent Computer Assisted Instruction
After commercial computers were released in the 1950s, IBM launched the Coursewriter 1 in the 1960s. This
is considered to be the first paradigm of intelligent computer-assisted instruction (ICAI) (Koschmann, 1996).
Based on the trainees’ interactive responses, this type of CBT is personalized in that it tailors assistance to the
trainees’ needs with characteristics similar to that of a human tutor. ICAI helped cultivate intelligent tutoring

678
systems (ITS). These systems are a spinoff of the ICAI and demonstrate a more advanced approach. ITS operates
in a way that “learns the best methods to facilitate training based on the trainee’s responses” (Blanchard &
Thacker, 2009, p. 265). Employees have found this method to be advantageous in that ITS effectively corrects
wrong answers or perceptions.
4.5 Simulations and Virtual Reality
Soon after the 1970s’ emergence of Atari “Pong”, the first ever video game, and the introduction of the IBM
PC-DOS, personal computer, in 1981, simulations rapidly developed. As mentioned earlier, simulations mimic
real world job situations for trainees and hence are more effective (as long as it mimics the actual job situation). A
more sophisticated simulation is known as virtual reality (VR). It was established in the mid 1980s when Jaron
Lanier coined the term “virtual reality” as he sold VR goggles and gloves to a number of organizations (Steuer,
1992, p. 73). Computer simulation in the form of virtual reality often requires the trainees to wear specialized
equipment and interact with objects in a virtual environment that is similar to the situation that will be
encountered back on the job. An example of VR is aircraft training. Pilots in training are placed in aircraft
simulations with light, sound and motion factors added in. Although this type of training method is most similar to
the job, it is quite costly.
Before choosing any choice of educational methods discussed, an organization should always perform a
needs analysis, determine its strengths and weaknesses and then decide on a training program that best fits its
goals. Typically, small businesses, often due to the cost and developmental time, maintain a traditional mode of
training tailored to its particular needs. However, larger firms are finding CBT to be more effective and
accommodative within their organizational structure (Blanchard & Thacker, 2009).
4.6 Shorter Training Cycles
As one can readily observe, computer enhancements have continued to improve. This is often via computer
related enhancements. Shorter and shorter product life cycles are increasingly becoming the norm. As products
and services enter and leave the market at a faster pace, the need to keep employees and stakeholders current
becomes more time sensitive. A good example of this frenzied pace would be a Verizon Wireless retail store. Over
the course of a year, most products in the store will become obsolete and employees must become trained and
skilled in the multitude of replacement products. The idea of sending employees to a remote location for a couple
of weeks once a year is no longer possible; training must be ongoing and continuous. Hence, the cycle of training
is becoming shorter and faster computer-related technology is allowing the industry to meet this challenge.
5. Recent Trends
With the onset of the World Wide Web in the early 1990s, there were many different hi-technology-related
innovations during that time period that further transformed the way training is conducted. For instance, CD-ROMs
were developed that allowed users to download various software programs or import/export information. While
CD-ROMs have faded from technology platforms, they were at the time, a stepping stone for workplace
management. In fact, e-books were made popular because of CD-ROMs (The Book and Beyond, 1995).
E-books have evolved swiftly since Angela Ruiz Robles invented it in 1949, the Mechanical Encyclopedia.
“[It] operated on compressed air. Text and graphics were contained on spools that users would load onto rotating
spindles” (Lallanilla, 2013, p. 1). The e-books eventually transformed into e-readers over the span of 64 years
with the Kindle, Apple iPad, the Nook, and others making large contributions to its success.

679
Today, the e-reader market is expected to expand at a compound annual growth rate of 21 percent between
2011 and 2015 (Research and Markets, 2012). This growth can be attributed to several factors. First, the e-reader,
available through a graphical interface, allows for rapid distribution of published books and documents. Second,
e-readers also have language translation capabilities. Additionally, there is obvious savings in terms of paper costs.
On the other hand, training can become a complicated issue as copywrited books may not be easily transferred for
sharing due to publishers’ “digital rights.”However, the standardization of the Adobe PDF and other electronic
formats have made the portability of documents much more uniform.
6. Intranet
Intranets that appeared in the mid-1990s are also a widespread computer-generated instructional platform that
has developed over time. They are utilized via a company portal that provides the sharing of information within an
organization. Intranets have increased workforce productivity, reduced the time it takes to complete a task or
operation, improved communication, made operations more cost-effective, allowed for quick
updates/announcements, and enabled teamwork through collaboration.
The intranet’s success lies in its design. An intranet is structured with one audience in mind: company
employees. While the intranet provides a high level of benefits, it can also be improperly managed due to the
overflow of data instead of being utilized in a way that creates company value (McGovern, 2003).
7. Webinar
Webinars are another widely used training method due to its costs savings in terms of time and travel costs.
Webinars are a form of web conferencing via slideshows, videos, etc. The first form of a webinar was introduced
as the Internet Relay Chat (IRC) in 1988 (Ross, 2001). IRC offered electronic conversations over the Internet that
allowed multiple users to write messages, and these applications have been applied to educational settings such as
teacher collaboration and conversations between classes (Simpson, 2000).
With the advent of instant messaging in the mid-1990s, technology further evolved. The latest and best
known form of webinars is web conferencing. Webinar’s usefulness lie in the fact that they are interactive in such
ways that members partaking in online webinars can interact with on-screen calendars and other facilitation tools
such as slide shows, while some type of presentation is being conducted. In many ways, this is a traditional lecture
method (enhanced), but offered online.
Webinars were historically used for demos or meetings, but have been trending toward a means of employee
training along with DVDs, Internet usage such as YouTube, and even cell phones, more widely known as
smartphones.
8. Smartphone
Although phones have continuously developed, the term “smartphone” really started to become a part of our
vernacular in the late 1990s and early 2000s. To this day we associate smartphones with operating systems such as
Android, Blackberry, Apple’s iOs and more. The popularity of smartphones is due to their power, convenience,
and simplicity.
Employees can quickly access or send an e-mail, participate in a conference call, take pictures, upload

680
information to the company site, gain access to apps that prove to be beneficial to company goals, and a host of
other applications. Smartphones or tablets, such as the iPad, have the capability to download applications from an
app store that are specifically designed with the end-user in mind.
Employee training may be further enhanced via smartphones through the use of video sharing, e-mails that
provide links to a training sessions, and even apps such as “Mobile Employee.” These computer application make
notes for training and moreover, provide employees with deadline reminders, appointments, travel reward
programs, work times including the ability to e-mail files that can be integrated into the corporate database, or
even join a webinar while one is waiting for a plane in an airport.
9. Wiki
Wikis are another resource that can be used for training purposes. Developed in the early 2000s, Wikis
provide information sharing sites that run via the Internet and allow users to modify information. Some Wikis are
limited as to who receives access to modify a site while others such as Wikipedia, welcome any user to change or
add facts/details to a particular subject matter.
Organizations that utilize Wikis should be aware of faulty information; some users are illiterate in dealing
with wikis. Certain companies may even find themselves having to implement a wiki “how-to” training session
before even conducting training via a Wiki. The value for companies lies in the fact that wikis can be used as a
collaboration tool, setting the stage for company-specific tasks/jobs such as project management, knowledge
management, and fostering information. The obvious advantage of this resource is its cost effectiveness
10. Web 2.0
The development of the Web 2.0 allows for many opportunities in corporate training. Instead of being driven
from the top down, the ability to utilize user-generated content in a sharing environment allows for bi-directional
communication by all.While Facebook and Wikipedia are prime examples of Web 2.0, many other similar
applications exist that allow for open communication.
11. Cloud Based Technologies
Many of the above technologies depend on accessing data from the “cloud,” a common term for information
that is stored somewhere other than customers or provider’s computers, but accessible by the Internet. Ideally, the
data is secure and allows all registered users to receive current information as it is updated. This means that
important information is never locked into only one computer or device and is accessible by many platforms.
A good example of how this improvement benefits all would be the classic phonebook. This technology
allowed it to go from a once a year revision to a continuously revised document with current data always available.
The information available in the cloud environment for training is only limited by one’s imagination. The
ability to view, upload, and update technical documents, calendars, videos, and other materials enables all
resources to stay current. Any change or addition to the organizational training library can immediately become
available to users.

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12. The Effect of Social Networking in the Workplace
Social networking began making its mark in the world in the early 2000s (Edosomwan et al., 2011).
Connecting and information sharing is occurring quicker than ever. Social media is proving to be a useful
marketing tool. For instance, human resource departments in many organizations have made it an integral part of
their employment process.
Take Facebook, for example. With its debut in 2004, Facebook set the benchmark for the ultimate social
networking (Edosomwan et al., 2011). Facebook originally focused on connecting with peers and sharing personal
experiences through photos, statuses, messages, etc. Facebook has since evolved into more than just a platform for
individual use. Companies now utilize Facebook to create groups or events to promote their business. Other
organizations go as far to use Facebook for communication purposes by creating a group, inviting individuals and
posting announcements/updates to the discussion forum. This networking tool is of great worth to organizations
that like to get information out quickly and at no cost. Individuals can even modify their settings to receive
notifications of when updates are posted. For example, if a manager posts a new training video to a discussion
forum, better known as the Facebook “wall”, group employees are notified of this action through e-mail, text
message alerts, or even Facebook app notifications via smartphones.
LinkedIn, another social networking site similar to Facebook, was launched around the same time. LinkedIn
targets a more career oriented audience. The site connects numerous professionals in a variety of occupational
areas and assists users by reconnecting them to past or present colleagues, making inside connections to jumpstart
business opportunities or careers and offers a host of advice/knowledge sharing groups and experts. Here, both the
employer and employee benefit from what the site has to offer. In addition, training tips/advice are readily
available through group discussions on LinkedIn such as “Focus on Training”, “Training Principles” and more
(LinkedIn, 2004).
Likewise, Twitter has contributed to business training solutions as well. The site was launched in 2006
providing users with news, updates and tips as well as permitting twitter users to update their own status, opinions
or thoughts. Twitter gained a lot of popularity first because it offered unique options such as micro blogging and
secondly because it was used by some celebrities (Edosomwan et al., 2011). It was not long before organizations
saw business application and opened their own twitter accounts. Companies can “tweet” about their recent news,
discounts, endorsements, and so on. Some accounts include Training Journal, SHRM, Human Resources IQ and
more. These twitter accounts also make use of sharing very broad subjects via external links, documents, videos,
podcasts (Twitter, 2013).
The electronic descendent of the old PBS show, Sunrise Semester, Podcasts, offer video and audio to make
information available to the consumer, Podcast training sessions from iTunes have been heavily exploited,
growing in popularity. Podcast training grew from 5 percent in 2006 to 15 percent in 2007 (Blanchard & Thacker,
2009). Organizations appreciate podcasts’ ease of use in terms of no cost to the creator or consumer, if so desired.
Apple’s iTunes University is allowing many college courses to be used by the general public via podcasts,
allowing knowledge to be transferred around the globe.
In midst of the emergence of many social media sites, YouTube found its way to the forefront of it all in 2005.
YouTube was a revolution in the social media world because needed a simple interface in a world where it was
difficult to post videos online (Edosomwan, Sitalaskshmi, Kouame, Watson, & Seymour, 2011). Through YouTube,
organizations have found another way to use video sharing with more convenience and at little or no cost at all.

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13. Evolution of YouTube Training
The use of YouTube for learning was quickly adopted by parents to teach their children important subjects
and skills. Even athletes have made use of the video-sharing website to acquire new skills. Several companies
have tested the water by first promoting marketing efforts via YouTube. Dunkin Donuts advertised its slogan,
“America runs on Dunkin”, through a YouTube channel which as generated 1,607,416 views as of November
2012 (YouTube, 2013).
13.1 YouTube’s Role in Training
There are many uses of YouTube videos in the workplace. As it relates to training, Monsanto Company
constructs training videos for its workforce over a wide range of skills and posts them on YouTube. The company
is not only cutting training costs significantly, they are also dramatically increasing the company website traffic
which in turn is boosting the company’s popularity (White, 2007).
YouTube offers two different approaches: Companies can record and post their own videos, as Monsanto
does, so that trainees can visit the site and observe multiple viewings of the video. Second, companies can choose
to access videos of pre-recorded training videos published by outside sources. Other advantages include the idea
that both potential employees and customers can readily determine the company’s values, culture, and
management practices based on these videos. However, companies should examine the appropriateness of the
video content in terms of fit with the company’s needs and mission.
YouTube serves various functions in training and its role as a training tool is hardly going unnoticed. In fact,
many CEOs are embracing the advantages YouTube provides. For instance, a fairly new YouTube channel, CorpU
TV, publishes video clips involving CEOs with valuable insight aimed at Fortune 500 companies. “These clips
typically run three to five minutes and cover a range of topics including succession planning, coaching, localized
learning and sales training. JetBlue CEO, Dave Barger, for one, discusses how leaders should maintain visibility
among staff and customers” (Laff, 2008, p. 18).
While there are companies that exist for the sole purpose of producing professional training videos such as
Media-Partners and Digicast Productions, YouTube can work in the same way and at a much lower cost. With
sufficient and creative technology talent, a company can produce videos that are made by training video
production companies. Wells Manufacturing, a vehicle electronics company, has generated more than 35 “how-to”
videos aimed specifically at vehicle diagnostic and repair information. The videos are offered in “both English
and Spanish…also available for free viewing via Wells’ website. The videos can [also] be accessed on a 24/7
basis by searching Wellstech on YouTube” (Motor Editors, 2010, p. 43). “Analysts say that more and more
companies are launching such YouTube-style videos to take advantage of a massive increase in traffic video sites
over the past couple of years” (Havenstein, 2008, p. 2).
There many different types of training found on YouTube. These include training for salesmen, human
resource generalists/specialists, geologists, medical nurses/doctors, technicians, financial auditors, consultants,
chemists, engineers and more. Overall, the scope of YouTube training continues to grow (YouTube, 2013).
14. Training Shifts Toward E-learning
In 2007, larger companies indicated that they provided 37 percent of their training via e-learning, also known
as electronic media (Blanchard & Thacker, 2009, p. 265). “Study after study reveals that the key to a healthy

683
bottom line is investing in employee skill development. This has forced business executives to search for
cost-effective ways to enhance employee proficiency” (Salz, 2011, p. 14).
A study conducted by the Chartered Institute of Personnel and Development (CIPD) in collaboration with the
Society of Human Resource Management (SHRM) assessed the changes in the learning and development methods
of organizations. The study consisted of research collected from a survey of 952 practitioners in the United
Kingdom (60%), United States (23%), and India (13%) (Sinclair et al., 2011):
Figure 1 Percentage of Changes in the Use of Learning and Development Practices in the Private Sector, 2011
From the study previously mentioned, e-learning interest has especially increased in the United States in
comparison to other training methods.
14.1Types of E-learning Media
With the e-learning trend, comes a variety of different methods organizations may choose from to further
increase employee training efficiency. CIPD and SHRM continued their studies with an examination of the
different measures companies are using (Sinclair et al., 2011).
Rapid authoring software and webinars were found to be the United States’ most popular means of using new
media in this particular study.
28
21
50
32
23
58
45
32
39
3
10
5
5
15
6
4
12
18
0 10 20 30 40 50 60 70
On-the-job training
Job rotation/Shadowing
E-learning
Use less India
Use less USA
Use less UK
Use more India
Use more USA
Use more UK

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Figure 2 Percentage of Organizations Using New Media to Support Aspects of Learning and Development, 2011
15. Training Transfer: Computer-based Versus Traditional Instruction
Computer-based training has been found to be at least as effective as traditional instruction. One study
conducted in 2002 tested the effectiveness of transfer between traditional instruction training and CD-ROMs at the
time in which CDs were trending in the business world. Different variables were considered such as years of work
experience, age, level of education, years of experience as a supervisor, online course experience, self-efficacy,
motivation, etc. The study found that overall, no significant difference in transfer existed between CD-ROM
training and traditional training. Both methods produced the same amount of transfer based on statistical findings
at the time (Petty et al., 2007).
In contrast, “The benefit of computer-based instruction would lower training costs for program development,
delivery, and evaluation while keeping the same level of training transfer” (Petty et al., 2007, p. 54). The study
suggests that further in depth research should be carried out due to limitations of the study, such as limited
geographical area and lack of online, simulation or virtual reality examination. It is also recommended that
computer-based training be tailored to a more industry-specific channel. In doing so, a more substantial shift in
transfer may result.
While in 2002, CD-ROMs seemed to produce the same amount of transfer as traditional training, they also
23
1
5
20
12
16
37
11
13
31
3
10
54
21
21
26
15
53
53
21
18
32
26
41
27
35
16
0 10 20 30 40 50 60
Virtual learning managemnt systems
Mobile learning for smartphones
Media such as Facebook, LinkedIn,
YouTube
Webinars
Audio learning such as podcasts
Learning libraries/wikis
Blended learning programmes (online
courses)
E-books
Rapid authoring software
India
USA
UK

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helped jumpstart the shift to a more computer-based training focus. Technology has since advanced. However, due
to the fact that e-learning training is fairly new to the business organizations, there is limited empirical research
available on the effectiveness of contemporary training methods.
Generally, e-learning should not be used as a stand-alone tool unless it is able to provide the same “On-hands”
experience encountered on the job. This would hold true to all technology-related training devices.
16. Business Capitalizes on the E-Learning Trend
Digicast Productions, an internet-based company has taken advantage of the shift towards online training.
Digicast Productions “help[s] companies influence behavior change through creating communication and training
programs” via Internet (www.digicast.com.au). A similar company, Media-Partners has also realized the window of
opportunity in creating training videos. Media-Partners are emerging on the forefront as a leading, video training
company with a slogan that reads, “Best Training Videos at the Best Prices.” Both Digicast Productions and
Media-Partners have established a successful platform and provide several case studies to substantiate their success.
17. Case Studies That Prove Video Sharing Training Effective
Fired Up, Incorporated owns Johnny Carino’s, an Italian sit-down franchise restaurant that turned to
Media-Partners for a training video specifically tailored to delivering exceptional customer service. Kathy Harris,
Vice-President of Media-Partners claims the video is “makes an emotional connection with them [employees], and
that's what we want.” One of the training videos, “The Difficult Guest” aims at improving guest loyalty.
Media-Partners claims “To lose one guest party of two per week, at an average check of $30 and one visit a month,
amounts to an annual loss of more than $18,000, at one location” (Case Studies: The Difficult Guest, 2012).
Therefore, use of a training video such as “The Difficult Guest” could be cost effective way of providing effective
training. Media-Partners have received positive responses in increasing guest satisfaction reports and a favorable
response from managers and employees from Fired Up, Inc (Case Studies: The Difficult Guest, 2012).
In addition to Media-Partners, its competitor, Digicast Productions has also demonstrated training
effectiveness, particularly in the area of steel manufacturing. Digicast Productions was recognized with the
LearnX Award for saving the steel company $150,000 over a 5 year period, in part by training videos. Digicast
Productions was able to help reduce training time from 4 hours to less than 1 one hour. Mike Hamilton, the
Technical Services Manager of the steel manufacturing company admits, “We now have some engaging and well
written training videos that are giving us great results” (Communication Resources, 2012).
18. Interviews
Due to the lack of empirical research on the issue, we conducted ad hoc interviews using a convenience
sample of business executives. When looking at the impact that technology has had on training, it is imperative
that the affected employee’s perspective be taken into consideration. Do they like this new form of training? Is it
effective? Are they bored? As you will see the perspective varies over positions and companies. The following
interviews generated very different answers. The interviews were conducted among diverse positions: a Vice
President of Human Resources and Chief of Operations at a major firm, a college professor/health management
organization consultant, and a worker compensation analyst.

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 Consultant for Kaiser Permanente, a health management organization, and also a PhD. candidate at Auburn:
When asked, he stated that he has participated in formal organizational training in the past in the form of
classroom instruction and that he has also participated in non-traditional training such as e-learning. His e-learning
experiences occurred during his online courses at Auburn University, where he was able to log onto a secure
website, download notes, and watch an instructor give a lecture on the material.
When asked if this type of training was beneficial or helpful, he responded was that it was beneficial and that
he preferred it over traditional methods because it allows him to do it on his own time. Since he is a working
person and has classes during the days he can review the training during his free time. This new type of training
also gave him the ability to review a concept if he did not understand it.
He was also able to send an e-mail and receive quick responses to problems or questions that arose. Although he
went into the training thinking that he wouldn’t like it, he found the experience very desirable. Since he works with
Kaiser Permanente, which is based out of Oakland, California he conducts his own classroom instruction training
and he said that he would consider changing his own training methods and moving towards a computer-based
method. This change would allow him to send the training materials out to a countless number of people.
He said, “it’s just a matter of getting people interested.” He also participates in diversity and sexual harassment
training for Kaiser Permanente through videos that the company produces. The videos are broken into chapters,
followed up by a test. However, one must score a certain percentage before moving onto the next chapter. When
asked if he had ever been involved in information knowledge via YouTube, he indicated that he had studied a video
of a professor from Stanford University who was lecturing about the new and upcoming profession of data mining.
 The Vice President of Human Resources and Chief of Operations at a Federal Credit Union: When asked if
he had ever participated in organizational training his response, he indicated he participated in training was
delivered in the classroom with workshops. He had also participated in e-learning.
Given that the financial institution, it must keep its staff up to date on policies, procedures, regulations, as
well as keep them abreast of all the various scams, and fraud/theft awareness, significant training is required. To
conduct all of this training, they have customized interactive e- training which places trainees in various scenarios.
These scenarios require participants to work through them so they can visualize and learn the important principles
and information. This type of training is essential for his firm.
When asked if he preferred this type of training over traditional methods, his response was “yes and no.” You
have to have a blend to be effective; you have to have the basics, which occur in the classroom, before you can build
with e-learning. The group learning of a classroom was in his opinion essential due to the one-on-one and classmate
interaction. No one person will think of all the questions that will occur in training, but a group will produce much
better and more through subject understanding and then the trainees will have the foundation which to build upon,
which occurs in e-learning.”
He has been involved in information knowledge via YouTube before. His firm uses sites such as YouTube
primarily to educate members. Their members and non-members can access the site for information on basic
financial education, such as balancing a checkbook and how to obtain, understand your credit report and credit score,
in addition to how credit unions differ from traditional banks.
 A worker’s compensation analyst for a health resources organization: When asked if she had ever
participated in organizational training, her response was “Yes. We have training workshops with our CEO and
director of operations to see what is expected out of us by our company and our clients, the hospitals, and our
goals and values for the company. All of our company is web based and we have the IT department show us how

687
to navigate our compass, the Apsirion database.”
When asked if she had ever been a part of non-traditional training such as e-learning, she said that she is required
to participate in webinars and HIPAA training on in-house hospital systems. She stated that this type of training was
very beneficial and helpful. She also said that she preferred it to other types of training since her firm is a nationally
based company; it's difficult for them to fly the needed representatives to a particular location for training.
The webinars are cost efficient and show the step by step process of how to navigate in specific hospital
systems. There is not a standard system, and even though there are some hospitals that use the same system, each is
uniquely designed for their facility. The webinars help the representative know how they would like for the
company to use their system.
She reported that HIPAA training is easiest with their e-learning. Many of the representatives can access the
information at one time and are able to move at their own pace, not feeling rushed or slowed down by others. This
e-learning style also enables them to learn the law for the first time and allows them to go back and re-familiarize
themselves with the information so that it is always fresh. She also pointed out that e-learning caters to the faster
paced environment we are moving towards. When asked if she had ever been involved in information knowledge
via YouTube she said that her firm uses YouTube to watch the Do’s and Don’ts of HIPPA violations.
Each interview produced a different type of e-learning response and each interview participant preferred it to the
traditional types of learning. This supports the idea that contemporary types of training have a very vital role in the
workplace. Online training allows the trainee to move at their own pace on their own time. While some employers see
online training as a risk, because employees can skip through it or avoid it all together, providing a small test as the
training is conducted is a good way to ensure that the trainee is paying attention to the program. Although it is still in
the beginning stages, YouTube and online training are already having making an impact on the training.
19. Discussion and Conclusions
The evolution of training methods throughout the years has enabled businesses to achieve greater
profitability through increases in productivity and cost effective training that also results in a more motivated and
efficient workforce. By keeping the company mission, values and needs in mind, an organization must effectively
choose the appropriate training method and delivery system. The research to date seems to suggest that low cost
training methods such as YouTube, social media sites, e-learning and other recent training trends are at least as
effective as traditional methods. Hence, going forward these should be the preferred training platforms in order to
keep cost low while maintaining an effective training program.
However, modern training methods may not always be accepted. Older generations still in the workforce,
such as baby boomers may be resistant towards these newer techniques and would respond better to traditional
training methods. Thus, older training platforms should not be carelessly cast aside unless they are cost
prohibitive.
Times are changing and therefore, so are organizations. To keep up with the times, businesses should search
for the most useful and value-creating training approaches available. Otherwise they run the risk of not being as
effective and cost efficient in their training programs as they could be.
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Leadership Success or Failure: Understanding the Link between
Promotion Criteria and Leader Effectiveness
Mike Stutzman1
, Tracy K. Tunwall2
(1. Rockwell Collins University-Rockwell Collins, Inc., USA;
2. Department of Business and Rockwell Collins, Mount Mercy University, USA)
Abstract: Leadership is a real and vastly consequential phenomenon, perhaps the single most important
issue in the human sciences (Hogan & Kaiser, 2005). Leadership is also historically one of the most poorly
understood (Judge, Piccolo, & Ilies, 2004). Leadership solves the problem of how to organize collective effort;
consequently, it is the key to organizational effectiveness and personnel management (Bono & Judge, 2004). With
good leadership and proper training, organizations thrive and prosper. Bad leaders perpetrate terrible misery on
those subject to their domain. The purpose of this qualitative study is to expand the field of knowledge regarding
how proper leadership selection can positively impact the long-term sustainability and culture of the workforce
through employee engagement (Judge, Piccolo & Ilies, 2004). Increased understanding of the relationships among
the variables included in this study offer the possibility to enable a long-term sustainable workforce model
through the development of proper leader selection and measurement. In conclusion, leadership effectiveness
should be defined and evaluated in terms of the performance of the group or team for which a leader is responsible.
Ultimately it is recommended that a greater emphasis be placed on results to enhance the real-world relevance of
leadership research. It is predicted that organizations that choose and reward leaders on the basis of how their
teams perform will be more likely to succeed and stand the test of time (Judge, Piccolo & Ilies, 2004). Many
studies lend support to the latter view. In the long run organizations must develop cultural values that support and
reward effective performance, not just successful socializing and politicking.
Key words: training; personnel management; corporate culture
JEL code: M53, M12, M14
1. Introduction
The psychological literature on proper leadership selection and employee engagement is extensive and
contains useful generalizations about the links between personality, cognitive ability, leadership style, and
evaluations of leadership potential and performance (Bono & Judge, 2004). Psychologists also know that certain
leadership styles are associated with effects on employee engagement (Lord, 1977). Effective leaders enhance the
job satisfaction, structured leaders have higher performing teams, and transformational leaders inspire greater
Mike Stutzman, Ph.D., North Central University (in progress); research areas: leadership development; workplace sustainability.
E-mail: mlstutzm@rockwellcollins.com.
Tracy K. Tunwall, Ph.D., Mount Mercy University; research areas: leadership development; workplace sustainability. E-mail:
ttunwall@mtmercy.edu.

Leadership Success or Failure: Understanding the Link between Promotion Criteria and Leader Effectiveness
691
commitment (Judge & Piccolo, 2004).
Distinguishing between people who seem leader-like and those who enhanced the performance of their teams
brought considerable clarification to the literature on this topic (Crabb, 2011). My research will show the factors
correlated with a successful career in management are not necessarily the same as those associated with leadership
effectiveness, which enhances employee engagement and leads a team to success.
We want to further knowledge in the field of leadership selection to ensure that successful and effective
leaders are hired, and to better understand the impact leadership selection has on organizational success. In an
ideal world, career success and leadership competence would go hand in hand—that is, those people who are
selected for leadership positions, who are well paid, who are promoted quickly, and who are well regarded by their
bosses would also motivate employees, make good decisions, and build teams that produce results over time
(Berson, Dan & Yammarins, 2006). But there are good reasons to believe that this is not necessarily the case
(Judge, Heller & Mount, 2002). Experienced observers suggest that what advances a manager’s career is not
necessarily what makes an organization effective (Judge, Piccolo & Ilies, 2004).
2. Literature Review
What is quickly discovered when reviewing existing research is that the literature contains few defensible
generalizations other than leaders seem to be somewhat taller and a little bit brighter than their subordinates
(Berson, Dan, & Yammarins, 2006). The methodological diversity in this research suggests a robust literature, but
may also reflect a lack of definitional clarity (Bono & Judge, 2004). For example, the early work on personality
and leadership appeared to produce inconsistent results, prompting reviewers to dismiss its importance (Hogan &
Kaiser 2005). Leadership research often focuses on how leaders are regarded, and tells us little about leading
effective teams (Judge, Heller & Mount, 2002). Reviews of leadership research often wrongly conclude that the
attributes that help managers gain recognition and approval also helps organizations prosper (Berson, Dan, &
Yammarins, 2006). Distinguishing between people who seem “leaderlike” and the performance of their teams
brought considerable clarity to the literature (Judge, Piccolo & Ilies, 2004).
The definition and measurement of effectiveness is even more elusive (Judge, Heller & Mount, 2002). The
vast literature on managerial effectiveness offered little agreement on criteria or measure. It is important to
distinguish between the success of managers’ careers—defined in terms of wealth, status, and reputation—and
managers’ effectiveness as leaders—defined in terms of the performance of the group or organization they lead.
The kinds of criteria used in leadership studies suggest that researchers often overlook the difference (Bono &
Judge, 2004). Another noted point is that much leadership research focuses on career success and how leaders are
perceived (Hogan & Kaiser, 2005). There has been relatively little research on the characteristics of leaders whose
teams and organizations beat the competition (Judge, Piccolo & Ilies, 2004). Most research defined leadership as
merely being perceived as “leaderlike”. There were no cases in which group performance was the effectiveness
measure (Berson, Dan & Yammarins, 2006).
3. Findings
What is found is that few real managers are both successful and effective. The traditional assumption holds
that promotions are based on performance (Bono & Judge, 2004). When attempting to discover what successful
managers—those who have been promoted relatively quickly—have in common with effective managers—those

692
who have attained satisfied, committed subordinates and high performing units, the answer seems to be that they
have little in common (Judge, Piccolo & Ilies, 2004). The real-world importance of leadership is critical for the
long-term success or failure of organizations and social institutions (Judge, Heller & Mount, 2002).
Although most people tend to take the importance of leadership for granted, many academics still challenge
this position (Berson, Dan & Yammarins, 2006). Some argue that the effects of leadership are minimal compared
with historical, organizational, and environmental forces (Hogan & Kaiser, 2005). Others suggest that attributing
organizational outcomes to individual leaders is a romantic oversimplification (Bono & Judge, 2004). Others
maintain that organizational performance cannot be attributed to individual leaders because performance is an
emergent phenomenon involving complex, nonlinear interactions among multiple variables in a dynamic system
open to outside influences (Luthans, 1988).
Each of these views is contradicted by a simple empirical fact. Research on managerial succession over the
last 20 years has consistently found a relationship between who is in charge and organizational performance.
Using different methodologies, these studies converged on the conclusion that changes in leadership are followed
by changes in firm performance (Luthans, 1988).
Three lines of research suggest the characteristics associated with career success are not the same as those
associated with leading a team to success (Berson, Dan, & Yammarins, 2006). The first concerns individual
differences in orientation toward one’s career versus one’s team or organization (Hogan & Kaiser, 2005). They
concluded that career-oriented and team-oriented commitments are different (Bono & Judge, 2004).
The second line of evidence comes from the so-called “derailment” literature (Judge, Heller & Mount, 2002).
This research shows that many bright and ambitious executives nevertheless are fired, are demoted, or fail to
advance. They suggested that this failure rate reflects the fact that managers are rarely chosen on the basis of their
talent for leadership (Judge, Piccolo & Ilies, 2004).
A third line of research contains studies directly evaluating the relationship between a manager’s career
success and the performance of his or her team found that measures of career success (e.g., rate of promotion) and
team performance (e.g., team morale and productivity) were unrelated. Less than 10% of their sample of general
managers had both successful careers and effective teams (Bono & Judge, 2004).
Many managers believe that getting ahead depends more on looking good than leading effectively (Hogan &
Kaiser, 2005). Berson (2006) offered the following “promotion tips”: Avoid confrontation; withhold suggestions
for improvement; do not ask your boss to champion “unpopular” positions; always agree with your boss;
concentrate on presentation skills and looking good in meetings with superiors; demonstrate an intense desire to
win career advancement and to best your peers; and try to find your next promotion because rapid advancement
looks good.
Thus, it is proposed that the relationship between career success and leadership effectiveness is weak in the
corporate population (Judge, Heller & Mount, 2002). The message to leaders is that overcoming organizational
inertia, raising uncomfortable realities, and initiating adaptive change can wreck individual careers. It is dangerous
to be right when the organization is wrong (Judge, Piccolo & Ilies, 2004).
Observers of real organizations have long suspected that social and political skills are the real key to getting
ahead, to being successful (Hogan & Kaiser, 2005). They believe that although managers who are successful (that
is, rapidly promoted) may be astute politicians, they are not necessarily effective (Berson, Dan & Yammarins,
2006). Indeed, the so-called successful managers may be the ones who do not, in fact, take care of people and get
high performance from their units (Luthans, 1988).

693
Could it be that the successful managers, the politically savvy ones who are being rapidly promoted into
responsible positions, may not be the effective managers, the ones with satisfied, committed subordinates turning out
quantity and quality performance in their units (Berson, Dan & Yammarins, 2006)? The importance that networking
played in real manager success was very apparent (Judge, Heller & Mount, 2002). Only networking had a statistically
significant relationship with success (Bono & Judge, 2004). The most successful real managers were doing
considerably more networking and slightly more routine communication than their least successful counterparts.
From the relative strength of relationship analysis it was found that networking makes the biggest relative
contribution to manager success and, importantly, human resource management activities makes the least relative
contribution (Bono & Judge, 2004). In the study of real managers, using speed of promotion as the measure of
success, it was found that successful real managers spent relatively more time and effort socializing, politicking,
and interacting with outsiders than did their less successful counterparts (Hogan & Kaiser, 2005).
Perhaps equally important, the successful real managers did not give much time or attention to the traditional
management activities of planning, decision making, and controlling or to the human resource management
activities of motivating, reinforcing, staffing, developing and managing conflict (Bono & Judge, 2004).
It was also found that communication and human resource management activities made by far the largest
relative contribution to real managers’ effectiveness, and with traditional management, networking made by far the
least relative contribution (Berson, Dan & Yammarins, 2006). These results mean that if effectiveness is defined as
the perceived quantity and quality of the performance of a manager’s unit and his or her subordinates’ satisfaction
and commitment, then the biggest relative contribution to real manager effectiveness comes from the human
oriented activities—communication and human resource management (Bono & Judge, 2004). In other words, the
successful real managers do not do the same activities as the effective real managers, in fact, they do almost the
opposite (Hogan & Kaiser, 2005). These contrasting profiles may have significant implications for understanding
the current performance problems facing American organizations (Berson, Dan & Yammarins, 2006).
Sayles (1993) noted that many managers believe getting ahead depends more on looking good than leading
effectively. Hogan and Kasier (2005) reviewed surveys suggesting that about 50% of executives derail. They
suggested that managers are rarely chosen on the basis of their talent for leadership (Judge, Heller & Mount,
2002). These incompetent managers were promoted on the basis of their skill at managing impressions, not their
skill at leading troops or driving employee engagement (Kaiser, Hogan & Craig, 2008).
4. Conclusion
In conclusion, leadership effectiveness should be defined and evaluated in terms of the performance of the
group or team for which a leader is responsible (Bono & Judge, 2004). Second, much leadership research
concerns how managers are perceived and therefore provides limited insight into leadership effectiveness (Hogan
& Kaiser, 2005). Third, a portion of the literature is informative about how leadership affects organizational
performance; however, it focuses more on follower, team, and organizational processes than on organizational
outcomes (Bono & Judge, 2004).
Ultimately it is recommended that a greater emphasis be placed on results to enhance the real-world relevance
of leadership research (Hogan & Kaiser, 2005). It is predicted that organizations that choose and reward leaders on
the basis of how their teams perform will be more likely to succeed and stand the test of time (Judge, Piccolo &
Ilies, 2004). Many studies lend support to the latter view. In the long run organizations must develop cultural values

694
that support and reward effective performance, not just successful socializing and politicking. This goes
hand-in-hand with the current attention given to corporate culture and how to change it (Hogan & Kaiser, 2005).
An appropriate goal for cultural change in today’s organizations might simply be to make effective managers
successful (Judge, Piccolo & Ilies, 2004). The effort they devote to the human-oriented activities of
communicating and human resource management are what make them effective, and should not continue to be
overlooked. How human resources are managed—keeping them informed, communicating with them, paying
attention to them, reinforcing them, resolving their conflicts, training/developing them — all contribute directly to
managerial effectiveness (Hogan & Kaiser, 2005).
References:
Berson Y., Dan O. and Yammarins F. J. (2006). “Attachment style and individual differences in leadership perceptions and
emergence”, Journal of Social Psychology, Vol. 146, No. 2, pp. 165-182.
Bezuijen X. M., van Dam K., van den Berg P. T. and Thierry H. (2010). “How leaders stimulate employee learning: A leader-member
exchange approach”, Journal of Occupational & Organizational Psychology, Vol. 83, No. 3, pp. 673-693.
Bono J. E. and Judge T. A. (2004). “Personality and transformational and transactional leadership: A meta-analysis”, Journal of
Applied Psychology, Vol. 89, No. 5, pp. 901-910.
Crabb S. (2011). “The use of coaching principles to foster employee engagement”, The Coaching Psychologist, Vol. 7, No. 1, pp.
27-34.
Hogan R. and Kaiser R. B. (2005). “What we know about leadership”, Review of General Psychology, Vol. 9, No. 2, pp. 169-180.
Hogan J. and Holland B. (2003). “Using theory to evaluate personality and job-performance relations: A socioanalytic perspective”,
Journal of Applied Psychology, Vol. 88, No. 1, pp. 100-112.
Johnson M. (2011). “Workforce deviance and the business case for employee engagement”, Journal for Quality & Participation, Vol.
34, No. 2, pp. 11-16.
Judge T. A., Heller D. and Mount M. K. (2002). “Five-factor model of personality and job satisfaction: A meta-analysis”, Journal of
Applied Psychology, Vol. 87, No. 3, pp. 530-541.
Judge T. A., Piccolo R. F. and Ilies R. (2004). “The forgotten ones? The validity of consideration and initiating structure in leadership
research”, Journal of AppliedPsychology, Vol. 89, No. 1, pp. 36-51.
Kaiser R. B., Hogan R. and Craig S. (2008). “Leadership and the fate of organization”, American Psychologist, Vol. 63, No. 2, pp.
96-110.
Kent R. L. and Moss S. E. (1994). “Effects of sex and gender role in leadership emergence”, Academy of Management Journal, Vol.
37, No. 5, pp. 1335-1346.
Lord R. G. (1977). “Functional leadership behavior: Measurement and relation to social power and leadership perceptions”,
Administrative Science Quarterly, Vol. 22, No. 1, pp. 114-133.
Luthans F. (1988). “Successful vs. effective real managers”, Academy of Management Executive, Vol. 2, No. 2, pp. 127-132.
Pati S. and Kumar P. (2010). “Employee engagement: Role of self-efficacy, Organizational support & supervisor support”, Indian
Journal of Industrial Relations, Vol. 46, No. 1, pp. 126-137.
Richman A. L., Civian J. T., Shannon L. L., Jeffrey Hill E. E. and Brennan R. T. (2008). “The relationship of perceived flexibility,
supportive work-life policies, and use of formal flexible arrangements and occasional flexibility to employee engagement and
expected retention”, Community, Work & Family, Vol. 11, No. 2, pp. 183-197.

695
An Exploratory Study on Private Label Brand Knowledge
and Consumer Loyalty
Ching-Wei Ho
(Department of Marketing, Feng Chia University, Taichung, Taiwan)
Abstract: The objective of this research is to assess the relationship between retail private label brand
knowledge and loyalty in Taiwan. A questionnaire survey is conducted among 529 customers in Taiwan as the
research design. The results of this study indicated that retail PLB awareness and retail PLB image both have a
positive effect on consumer retail PLB loyalty. The research finding is one of the first to demonstrate that retail
PLB knowledge affect consumer loyalty positively in Taiwan through examining PLB food and non-food products.
Retail PLB knowledge must be considered as a ‘whole package’ for developing services marketing effectively.
Key words: private label brand; brand knowledge; brand loyalty; survey, Taiwan
JEL code: M310
1. Introduction
The topic of retail brands has been discussed and investigated a great deal by previous researchers and
scholars (e.g., Aaker, 1996a; Ailawadi and Keller, 2004; de Chernatony and McDonald, 1998; Gordon, 1994;
Kapferer, 1997; McGoldrick, 2002; Randall, 2000; Wileman and Jary, 1997) and the concept of retail brands has
been recognised and argued since the 1960’s (McGoldrick, 2002). With the growth of retailer brands over the past
25 years, particular in Europe, the evolution of these product ranges has started with private labels offering the
consumers a lower quality product alternative for lower prices, into retail brands offering a true quality brand
alternative (Burt, 2000). Meanwhile, compared with the mature European retailing market, the concept of retail
brands in Asia has just started from the beginning stage and more and more Western retail companies go global
and enter into the Asian market with their successful operation experiences. According to Au-Yeung and Lu
(2009), many international retailers believe that use of own label brand in Taiwan is important. However, an
understanding of the development and strategic use of own label brand by retailers in Taiwan is not yet well
established. Burt (2000) pointed out that not all countries’ or companies’ private label brands progress through the
same sequence as the development of retailer brands. Current research from the US indicated that consumers are
considering purchasing a greater proportion of retail private label brands, e.g., in 2008, 24% of foods and drinks
were got from private label brand products in American families, and 97% of American families bought private
label brand products (Su, 2009). In Taiwan, retail branding has been introduced for over one decade (since about
1998 and 2000) by international retail brands, e.g., Carrefour, COSTCO and TESCO (Ho, 2008). Since then they
started creating and promoting low-priced private label brand products as the first stage for developing retail
Ching-Wei Ho, Ph.D., Feng Chia University; research areas: marketing, retailing, branding. E-mail: cwho@fcu.edu.tw.

An Exploratory Study on Private Label Brand Knowledge and Consumer Loyalty
696
branding in Taiwan. The research finding from Au-Yeung and Lu (2009) summarized that the developing progress
of retail own label brand products in Taiwan does not follow the pattern witnessed in the West. According to Ho,
Vignali & Temperley’s research (2006), at the beginning few years Taiwan’s retail private label brand still stayed
at the introduction stage, but in recent years, it is forecasted to have a growth trend (Carat Media Weekly, 2008). It
has been believed that more and more Taiwanese consumers have started to know, accept and use retail private
label brands. The key issue therefore is whether the more retail brand knowledge consumers acquire, the more
retail brand loyalty they have. It is an interesting issue to observe and explore after a decade into retail brand
development in Taiwan.
Therefore, this research paper is going to explore consumers’ retail private label brand knowledge which is
adopted from Keller’s brand knowledge concept (1993) to examine whether consumers’ retail private label brand
knowledge affect their retail private label brand loyalty. The previous discussions about the relationship between
brand knowledge and brand loyalty are mainly for the manufacturer brand or in general (Peng, 2006), less for the
field of service or retail branding specifically, thus this research will investigate a proposed conceptual research
framework for the relationship between retail private label brand knowledge and retail private label brand loyalty.
2. Background to Retail Private Label Brand in Taiwan
Taiwan is one of the newly industrialized economies and its retail industry is currently in a very strong
competitive phase. Taiwan’s modern retail market started from the first 7-Eleven in 1979 and then the first
international chain warehouse, Makro, from Dutch in 1987 and the last three decades have seen rapid growth of
chain system (McDonnell et al., 2011). The development and density of hypermarkets in Taiwan (per 229
thousand people have one hypermarket) leads throughout Asia Pacific (ACNielsen, 2004; Retail News, 2004).
With regard to retail private label brands in Taiwan, which were launched from 1979 by 7-Eleven, but late to
1995 they started to be used in hypermarkets by Carrefour Taiwan. At the beginning, private label brands only had
non-foods commodity products (e.g., commodity products) and did not get consumers’ attention. 76% of
Taiwanese consumers said, “I don’t know these private label brands so I don’t want to have a try.” (ACNielsen,
2005). According to Ho, Vignali and Temperley’s research (2006), the first few years (till 2005) still stayed at the
introduction stage. At that stage, all products no matter foods or non-foods which were higher price-sensitive and
lower preference had potentiality to develop as private label brands, and private label brands did not have any
brand value. Every retailer just operated private label brands with low price strategy (Wang, 2005).
According to Wang and Lu (2005), the private label brand share was under-developed with only 2.1 percent
market shares in Taiwan, but the growth rate was 30 percent. Figure 1 illustrates that global private label brand
share is 17 percent and average retailer concentration is 60 percent. The UK and Switzerland was at the position
of over both average levels where is the well-developed private label brand market. In the grey zone, e.g., New
Zealand and Australia, it is the highest potential market for private label brand growth. Though Taiwan was in the
under-developed marketplace, it was moving toward to grey zone by increasing retailer concentration.
Until 2009, both quantity and quality of private label brand products had a big growth trend. For the quantity,
Carrefour’s private label brand products accounted 10% for total sales in 2007 and aimed to up to 17%-20%;
RT-Mart’s private label brand products also had 10% of annual sales; COSTCO’s “KIRKLAND” achieved 20% of
annual sales (Carat Media Weekly, 2008). For the quality, both Carrefour and RT-Mart created the second private
label brand label to claim that the products under this label are provided with the same good quality as national

697
brand products (Card U News, 2009). Since then, brand value for private label brand products was concerned as a
key issue for both retail players and Taiwanese consumers.
Figure 1 Private Label Brand (OB) Shares and Retailer Concentration
Source: Wang and Lu (2005)
Meanwhile, in recent years, Taiwanese consumers have started to know, accept and use retail private label
brand. After observing Taiwanese consumers’ private label brand shopping behavior, Peng (2011) concluded that
nowadays when making a buying decision, more and more consumers have considered the knowledge and value
about retail private label brands not just the price issue. Furthermore, it could be found that private label brand
loyalty for Taiwanese consumers was developed during these years, e.g., there were 90% of Carrefour’s
consumers realized to buy private label brand and have high repurchase rate, according to PR Manager of
Carrefour Taiwan, Lin (Card U News, 2009).
Moreover, for the development of own label brand product categories, it also had a change. At the
introduction stage (before 2005), the developing strategies of private label brand more focused on non-foods
products, such as commodity products (e.g., toilet paper) than foods product, i.e. fresh foods, such as meat,
vegetable and fruits, and frozen foods (Wang, 2004). Actually, at the first few years, non-foods products
particularly paper products and plastic goods were the most popular private label brand products for consumers,
but from 2005 AC Nielsen report, foods products, e.g., milk, cheese and ready-to-eat products, had 32% market
shares with 9% growth rate, which means that foods products replaced non-foods products to be the most accepted
private label brand products (Ho, 2007).
3. Literature on Retail Private Label Brand
There are many different definitions of retail private label brands (own-label brands, private labels, or own
20% 40% 60%
20%
40%
60%
Global OB
share 17%
OB Share
Retailer
Concentration
Average Retailer
Concentration 60%
TAIWAN
UK
Switzerland
US
Japan
New Zealand
Australia
Highest Potential for
OB Growth

698
brands), Brassington and Pettitt (2003, p. 1106) defined as “branding applied to goods that are produced by a
manufacturer on behalf of a retailer or wholesaler who owns the rights to the brand.” Meanwhile, Rousell and
White (1970) pointed out the feature of “exclusively” for private label brands and indicated that products sold
under a retail organization’s house brand name, which are sold exclusively through that retail organization’s
outlets. Also Koskinen (1999) argued the definition with the greater diversity of branding and channels: a brand
name owned by the retailer or a wholesaler for a line or variety of items under exclusive or controlled distribution.
The evolution of retail private label brands can be traced back to 1870s, according to de Chernatony and
McDonald, multiple retailers emerged around that period and developed their own range of brands for which they
controlled the production and packaging. The early versions of distributor brands (usually referred to as own
labels or private labels) tended to be basic grocery items (1998, p. 31). “The late 1960s was when private label
brands started to be widely noted as a threat to manufacturers’ brands, especially in packaged grocery markets”
(McGoldrick, 2002, p. 337). The development of retail private label brands in Europe is much more than in US
and any other countries, especially in the UK. Laaksonen and Reynolds (1994) developed a typology of product
brand development which suggests that retail branding in the UK has developed through a number of generations
from generics to private label brands and through to added value retail branding (Table 1) (Burt, 2000; Burt and
Sparks, 2002; Veloutsou et al., 2004).
Table 1 The Five Generations Model
1st Gen 2nd Gen 3rd Gen 4th Gen 5th Gen
Branding form
Generic; No name;
Unbranded
Own label;
Unsupported private
label brand
Supported private
label brand
Extended retailer brand,
i.e., segmented retail
brands
Corporate brand
Strategy Generic Low price copy
Me-too copy of major
brands
Value-added
Corporate
positioning
Quality/ Image
Lower quality and
inferior image
Medium quality but
still perceived as
lower than leading
manufacture brands
Comparable with the
brand leaders
Same or better than
brand leader; Innovative
and different products
from brand leaders
Quality and
consistency through
the organization
Price position
20% or more below
the brand leader
10-20% below 5-10% below
Equal or higher than
knprivate label brand
Focus on delivering
value
Consumers’
motivation to
buy
Price is the main
criterion for buying
Price is still important
Both price and
quality, i.e., value for
money
Better and unique
products
Trust
Source: Adapted from Burt and Sparks (2002).
Similarly, Wileman and Jary (1997) suggest five stages in the development of retail brands-generics, cheap,
re-engineered cheap, par quality, and leadership- which roughly match the maturity of the brand concept (Burt,
2000). Meanwhile, McGoldrick (2002) also identifies a number of different “species” of retailer brands: retailer
name brands, store sub-brands, generic brands, exclusive brands and exclusive products. The result is that the
stages concept in these schemes does not only present the development and evolution of private label brands, but
also indicates a hierarchy of retailer brands. Under the same retailer’s name, private label brands have different
layers comprising generics, core own-brands and sub-brands and form a brand hierarchy in order to target and
satisfy different consumer segments and hence differing consumer needs. Basing on those models, Ho, Vignali
and Temperley (2006) created a hierarchy of retail branding, i.e., Generic, Value, Standard, Exclusive and Retail
store/company, which is not only to present the evolution of private label brands but also to classify the typology
of private label brands (Table 2).

699
Table 2 A Hierarchy of Retail Own Label Brand
Own label brand
hierarchy
Characters of hierarchy
model
Five Gens model Five stages model Examples
Exclusive
Sub-brands
(high quality)
4th: Extended retailer
brand
Par quality
Tesco: Finest
Asda: Extra Special
Standard Core own-brand
3rd:Supported private
label brand
Re-engineered cheap
Tesco: Tesco
Asda: Asda
Value
Sub-brands (low
price/quality)
2rd:Own label Cheap
Tesco: Value
Asda: Smart Price
Generic Generics 1st: Generics Generics
Vegetables and fruits
without any brand name
Source: Ho, Vignali and Temperley (2006, p. 46).
4. Retail Private Label Brand Knowledge- Brand Awareness and Brand Image
As mentioned above, retail private label brands are developed over ten years in Taiwan and Taiwanese
consumer should realize more retail private label brand knowledge than before. It is the time when after a decade
into retail own label brand development in Taiwan to examine what Taiwanese consumers know and feel about
retail private label brands. That is to say, to investigate the retail private label brand equity in Taiwan. Current
marketing literature defines brand equity based on different thoughts, e.g., brand knowledge such as brand
awareness and brand image/association (Keller, 1993), proprietary brand assets like perceived quality, brand
awareness, brand loyalty, brand association (Aaker, 1991), attitudinal dispositions (Rangaswamy et al., 1993),
incremental utility (Kamakura and Russell, 1993; Roy and Chau, 2011). This research will adopt Keller’s brand
knowledge concept as he defined brand equity as when a brand is well known and has some favourable and
unique association in mind of consumers (1993). Thus, the two components of brand knowledge, i.e., brand
awareness and brand image, will be discussed and explored for retail private label brand in this study.
Brand awareness is one of the main crucial issues for consumers when assessing products (Aaker, 1991). The
importance of brand awareness has been discussed a great deal in previous literatures, e.g., Hoyer and Brown
(1990), Rao and Monroe (1988), Shimp and Bearden (1982) and Simon (1970). From Keller’s model, brand
awareness consists of brand recognition and brand recall performance by consumers. Brand recognition requires
that consumers can correctly distinguish the brand as having been previously seen or heard (Keller, 2003). Brand
recall requires that consumers correctly generate the brand from memory (Keller, 1993). Aaker (1996b) indicated
that brand awareness could influence consumers’ perceptions and attitudes, as well as drive the choice and loyalty
of a brand. However, it is not easy to find out the relevant issue of brand awareness for retail private label brands
from previous researches.
The issue of brand image has been seen as one of the key topic in the field of consumer behaviour since the
1950’s (Dobni & Zinkhan, 1990). Keller (1993) defined brand image as perceptions about a brand as reflected by the
brand associations held in consumer memory. He also believed that brand image includes types, favorability, strength
and uniqueness of brand association. Research has also demonstrated that brands with a better image are preferred
than those with a less positive image (Kwon, 1990). Besides, Vahie and Paswan (2006) studied the private label brand
image and explored its relationship with store image. One of the findings indicated that the store atmosphere and store
quality positively influence the perception of private label brand’s quality. The results and knowledge gained from this
research on department store may not easily applicable to grocery retailers for this research.
Even though previous studies have investigated the topic about brand awareness, brand image, and the

700
relationships between each other, most of them still focused on the field of the brand in general (e.g., Peng, 2006)
but less for the field of retail brand. Therefore, the following hypotheses are proposed:
H1: Retail private label brand awareness has a positive effect on retail private label brand image.
5. Consumer Loyalty for Retail Private Label Brands
Consumer loyalty means that consumer insists on buying the same brand the next time (s)he needs to buy the
product again without any reason or stimulation (Bloemer & Kasper, 1995; Hu, 2006). If the consumer believes
that a brand has attractive attributes, s/he will have a more favourable attitude toward it. These attitudes then may
be measured by asking people how much they like the brand, feel committed to it, will recommend it to others,
and have positive beliefs and feelings about it (Kassim and Abdullah, 2010; Donio et al., 2006).
The importance of retail private label brands has contributed to change many consumers’ purchase and
consumption behaviors particularly in the grocery industry (Binninger, 2008). Theoretically, retail private label
brands’ role in building consumer loyalty is usually taken for granted because retail private label brands’
differentiation strategy toward competes their consumer attraction and loyalty-building capacity (Cortsjens & Lal,
2000; McMaster, 1987), but has not yet been completely identified. In reality, only some authors have directly dealt
with retail private label brands by concentrating on consumer loyalty (Ailawadi et al., 2001; Cortsjens & Lal, 2000;
de Wulf et al., 2005; Steenkamp & Dekimpe, 1997). Moreover, undoubtedly, it is believed that consumer loyalty in
the context of retailing is a complex issue, e.g., Robinson, 1995, as it involved in both store loyalty and brand loyalty.
Therefore, this research is going to focus on the brand side, namely the retail private label brand, to examine the
loyalty for retail private label brands. On the basis of the above discussion, the following hypotheses are proposed:
H2: Retail private label brand awareness has a positive effect on consumers’ retail private label brand loyalty
H3: Retail private label brand image has a positive effect on consumers’ retail private label brand loyalty
AC Nielsen has advised that the more private label brand information and knowledge are provided by
retailers, the more intention to try are happened by Taiwanese consumers (ACNielsen, 2005). Therefore, to sum
up, according to this actual situation in the market, it is an interesting issue to observe and explore the relationship
between retail private label brand knowledge and consumers’ retail private label brand loyalty, especially at the
time that after a decade into retail private label brand development in Taiwan. The concept of brand knowledge in
this research is adopted from Keller (2003) who defined brand knowledge in terms of two components: brand
awareness and brand image. Figure 2 illustrates the conceptual research framework for this study. It is going to
examine the relationship among retail private label brand (PLB) awareness, retail private label brand (PLB) image,
and consumers’ retail private label brand (PLB) loyalty.
Figure 2 A Conceptual Research Framework
Retail
PLB
PLB knowledge
Retail
PLB
Retail
PLB
H1
H2
H3

701
6. Research Method
6.1 Research Setting
To test the above hypotheses, an empirical study was conducted to examine the behaviours of Taiwanese
customers of hypermarkets. Taiwan has four main nationwide hypermarket brands, i.e., Carrefour, RT-Mart, Costco,
and Ai Mai, and the first three of them have focused on the development of their retail branding. Therefore this
study covered these three retail brands to give comprehensive coverage of all the key retail players in Taiwan.
6.2 Sample and Data Collection
A questionnaire survey with consumers was conducted in this research for examining these 3 hypotheses.
The sample for the study was selected to be representative of the hypermarket consumers in terms of having the
experience of buying hypermarket own label brands. Due to the limitation of the place and time cost, the
questionnaire survey was distributed from those three hypermarkets in Taichung (the third biggest city in Taiwan)
by simple random sampling. All participants were randomly conducted in front of those retail stores with
face-to-face guidance of the questionnaire respondents. Of the total number of 600 responses, 71 were discarded
due to missing values, which left 529 in the sample, which was in a valid response rate of 88.17%.
6.3 Measures
Retail PLB awareness. Brand awareness is typically measured by recall or recognition (Rossiter and Percy,
1987). Meanwhile, Keller’s (1993) model, brand awareness consists of brand recognition and brand recall
performance by consumers. Moreover, according to the researches from Wang (2004) and Ho (2007), Taiwanese
consumers had changed attitudes for PLB food and non-food products. Therefore, this study is going to apply
retail brand recognition (for PLB food and non-food products) and retail brand recall (for PLB whole products) as
the research elements for measuring retail private label brand awareness.
Retail PLB image. Aaker (1996a) proposed that the brand association involves image dimensions that are
unique to a product or to a brand. The measurement of brand association can be structured around three aspects:
the brand-as-product (value), the brand-as-person (brand personality) and the brand-as-organization
(organizational associations). This research tries to focus on the private label brand product side, so it took brand
value (for PLB food and non-food products) and brand personality (for PLB whole products) as the means of
measurement for retail private label brand image in this study.
Consumer retail PLB loyalty. Many studies have been discussed how to measure consumer’s brand loyalty,
e.g., Dick and Basu (1994); Jones and Sasser Jr. (1995), but it still depends on the research object to decide which
measurement is suitable. Among those, Jones and Sasser Jr. (1995) used three major categories to conduct
measures of loyalty, which is considered to be applied in this research as the measurement for consumer retail
private label brand loyalty:
 Intent to repurchase, e.g., consumers’ future intentions to repurchase retail PLB whole products
 Primary behavior, e.g., actual repurchasing behaviour for retail PLB food and non-food products
 Secondary behavior, e.g., consumer endorsements for retail PLB whole products
Retail private label brand (PLB) awareness, retail private label brand (PLB) image, and consumer retail
private label brand (PLB) loyalty were measured based on the items created from theoretical literature reviews
mentioned above because it is not easy to find the similar items from previous research. Scales of all items in this
questionnaire were designed to be measured on a 5 points Likert scale (1 = strongly disagree and 5 = strongly
agree). The measurement items are presented in Table 3.

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