The role of the market in transforming training and knowledge to superior performance: evidence from the Australian manufacturing sector

Abstract

Training and development of employees increases the value and breadth of employee capabilities and knowledge, although this improvement, we suggest, cannot drive improved competitive performance in the absence of effective commercialisation of these capabilities. We propose and test a model of training and organisational performance, mediated by effective market engagement and transformation by firms. We find, as we anticipate, no direct link between training and performance, although there is a significant and positive path between training and performance when mediated through effective and contemporaneous market engagement.

Keywords:

• ambidexterity
• commercialisation
• competitive advantage
• market engagement
• training and development

Acknowledgements

We thank the Australian Bureau of Statistics for the permission to use the Business Longitudinal Survey data.

Notes

1. This may be the result of a confounding factor, namely, higher labour productivity brought about by capital–labour substitution (Dupuy and De Grip 2006).

2. These confounders may be included as control variables in traditional regression analysis, although in the SEM analysis, we introduced them into the model separately to test for their significance and their potential impact on the proposed model.