Quebec SMBs and Training: The Impact of Size and of Institutional Mechanisms

Since the economic crisis of the 1980s, the SMB has increasingly become a focus of concern, displacing the large business that was the figurehead of the Fordist model during the Glorious Thirty Years. With SMBs now being seen as the sine qua non condition for economic growth, the training of their work force takes on an even greater importance. And yet, the first evaluations of the Law on the Development of Workforce Training in Quebec (Quebec, MESS, 2000 and 2002) reveal that, as is the case around the world, small businesses invest less than large business in workforce training. This article aims to reconsider the explanation for the low investment made by SMBs in terms of this being only an effect of size; we link this consideration to other factors which, taken together, determine the context in which the link of SMBs with training exists, and gives its meaning. Our starting-point is the idea that the social-economic environment of businesses (their status of sectional or territorial membership and the institutional mechanisms that surround them (laws, standards, etc.) are, along with individual characteristics (size, ownership, business structure), among the main factors which explain the relationship of businesses to training. A review of studies on this subject allows us first of all, to go beyond the idea that the propensity of businesses to provide training is “determined” only by the size of the business: other factors may play a role in the relationship the business has with training. For methodology, our research has chosen as its example a study carried out by the CEREQ in France (Bentabet, Michun and Trouve, 1999). This study set out to establish configurations of small businesses through linking a set of criteria to explain the relation of these businesses with training. As was the case for this ground-breaking study, by using as our basis Weber’s ideal types obtained through accentuating the main traits observed in reality, we bring to light several typical figures for small and medium businesses, taking into account both their environment (sector, territory, laws and standards), their size, their ownership and their structure (independent businesses, concessions, banners, franchises, etc.) and also their production and workforce management to finally link these elements into the relationship with training.In all, among the 40 cases studied, our analysis leads us to identify three main configurations for SMBs in relationship to training: (1) the more traditional businesses which are based on the “family” model and give little training, or mostly informal training within the business – on-the-job training which is usually given by the manager; (2) on the other hand, more structured businesses (subsidiaries of large business groups or franchised businesses) which offer more structured training similar to large businesses and (3) between these two configurations, SMBs which are becoming structured and which are trying to review their organization, and beginning to give a higher priority to staff training. Even though a qualitative analysis of 40 businesses does not allow us to measure the influence of each of the factors taken into consideration, our analysis does allow us to at least reject the idea that SMBs form a homogenous group of businesses all having a low tendency to invest in training, and limiting themselves to only unstructured training provided a the work station.As well, on the practical level, the results of our investigation make it possible to understand how a SMB is led to structure itself and to modify its relation to training. If a SMB’s structure may sometimes be the result of individual decisions made by managers (for instance, to place oneself under a banner with a view to company growth), it is nonetheless true that the individual actors are prevented from or encouraged to act by environmental factors. From this point of view, the change in training within SMBs could not only be the result of the action of individual actors any more than it could be the result of the rules imposed at an institutional level. The change in the relationship of SMBs with training would be, instead, the result of an interaction between individual choices and the institutional context. It would be more precisely the result of a transaction between the demand for training on the part of firms, and the institutional framework for offering training.Therefore, we can state that business training practices are a “social construction,” that is to say, the needs of businesses, and their demand for training, do not exist in and of themselves; rather they are the result of the interplay between different institutional actors such as government organizations, sectional worker committees, local and regional organizations, including education establishments which, by means of their employment analysis, their analysis of the job situation or by their definition of training context and their service offer interact on the training relationship. Among the set of institutions, the intermediary organizations (sectional, local or regional) seemed more and more to us to play a leading role in initiating the structuring of training within businesses. These organizations could also be seen, according to our analysis, as the level at which the individual actors are put into relationship with the institutions in the negotiation of institutional compromise and new game rules. Thus, our conclusions are in line with the institutionalist approach in which the organizational choices made by companies do not only depend on the managers themselves, but these choices are “influenced” or even “constrained” by the characteristics of their institutional environment which establishes the framework within which the managers make their decisions.If our analysis has enabled us to show the importance which institutional mechanisms take on at all levels to stimulate training in SMBs, it also shows the necessity of a “systemic” consideration of the various institutional mechanisms, not only in the analysis but in the proposal of government policies. For this reason, if our analysis shows that the institutional context may increase the tendency of businesses to train or to improve the management of their training, this will not be achieved, according to our analysis, by reinforcing only one institutional mechanism. Laws, standards, intermediary organizations, and various levels of training mechanisms are all part of an overall system of manpower training in Quebec and all contribute together to provide a framework for the actions taken by businesses in worker training. This is what some have called “institutional complementarity.”

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