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Volume 04 | Issue 01 2010

EFMD

EFMD aisbl

Global Focus Volume 04 | Issue 01 2010

Email: info@efmd.org

Dean Bernard Ramanantsoa on selecting quality student applicants:

Phone: +32 2 629 08 10 Fax: +32 2 629 08 11

Rue Gachard 88 – Box 3 1050 Brussels Belgium

DEAN BERNARD RAMANANTSoA, HEC BuSiNESS SCHool, PARiS

“HEC Paris has always placed selectivity at the forefront of its mission. High selectivity means high quality for an institution where graduate management education rhymes with leadership, integrity, fortitude and effectiveness. The GMAT is the perfect tool to help HEC Paris achieve this mission. We select MBA candidates from more than 70 countries for whom the GMAT creates a fair and balanced measure of potential achievement and success in our MBA programme. Combined with interviews and a detailed analysis of the candidate’s achievements, the GMAT offers a means of both effective selection and solid prediction of success in academic courses.

London calling Sir Andrew Likierman, Dean of London Business School, on his polymath career

Ranked #1 Business School in Europe for four consecutive years by the Financial Times Global Ranking, HEC Paris is proud of using the GMAT for its MBA program.” To learn more about the GMAT exam, visit gmac.com/efmd INSIDE THIS ISSUE GMAT® is a registered trademark of the Graduate Management Admission Council (GMAC), the leading advocate and resource for quality graduate schools of business, worldwide.

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Schools out Jordi Canals looks at the challenges facing business schools

Frog march David Gosset explains China’s urge to go global

Business model Emerson de Almeida considers the business of education

What deans do Julie Davies and Howard Thomas survey British deans

A theory too far? Frank Jan de Graaf on a dominant economic idea

Stay at home Enough internationalism says Nicola Hijlkema


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EFMD and Fundação Dom Cabral invite you to attend the International EFMD-FDC Conference Strategic Movements in Business Education. The conference aims at analysing experiences and trends in the field of executive education from the perspective of its different players namely, Business Schools, Corporate Universities and Consulting Firms.

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1 EFMD Global Focus | Volume 04 | Issue 01 2010

Volume 04 | Issue 01 2010

In focus The question of whether business schools and the management education sector generally bear any responsibility for initiating the current financial and economic crisis looms large in this issue of Global Focus. As others have said before them in these pages, two leading business school deans, Sir Andrew Likierman of London Business School in Britain (page 8) and Jordi Canals of IESE in Spain (page14), argue forcefully that they do not. There were credit crises long before business schools were created, Sir Andrew points out, adding that “I don’t put business schools high in the hierarchy of blame. There are others way in front of them... [business schools] would have to have had gigantic influence even to be able to claim they are to blame”. And Dean Canals argues similarly that pointing fingers at business schools is overstating the case. “Though many MBA graduates did indeed end up in financial institutions, their relative overall numbers were not large,” he writes. “The claim that business schools were the main ‘feeders’ of investment banks is not accurate.” But he adds that a more important question is whether schools could have provided better frameworks of business and ethics and, more important, better ways of integrating ethics with finance and strategy. On the other hand, Dutch academic Frank Jan de Graaf argues (page 48) that the domination of neoclassical economics thinking (the assumption that the rational, selfish behaviour of people in free markets leads to the highest social usefulness) in academia and business schools has contributed to the economic crisis. And while links between management education providers and the business world are always essential, Elio Borgonovi and Manuela Brusoni point out (page 60) that the current recession is having significant, and potentially long-lasting, effects on the relationship between schools of management and corporations. Indeed, the influence is increasingly two-way. Emerson de Almeida, Founder and Dean of Fundação Dom Cabral, a leading Brazilian business school, and an enthusiastic networker with top business schools around the world, argues that growing competition and changing markets have forced business schools to re-evaluate their strategies, often borrowing techniques from the business world. But, he wonders, can they do this and still remain academic institutions?


2 www.efmd.org/globalfocus

Volume 04 | Issue 01 2010

Global Focus The EFMD Business Magazine

1 In focus

Executive Editor

4 Talking Shop

Matthew Wood matthew.wood@efmd.org Advisory Board

Eric Cornuel Jim Herbolich Howard Thomas Consultant Editor

George Bickerstaffe bickerstaffe@btinternet.com Contributing Editors

GRLI appoints new CEO Drucker forum review Business of Branding 2009 Five new EQUIS schools

8 London calling A year into his job as Dean of London Business School, Sir Andrew Likierman talks to George Bickerstaffe about his polymath career

Emerson de Almeida, Elio Borgonovi, Manuela Busoni, Jordi Canals, Julie Davies, David Gosset, Frank Jan de Graaf, Nicola Hijlkema, Charles Jennings, Andrew Rutsch, Gordon Shenton, Howard Thomas, Giselle Weybrecht

14 Can they fix it?

Design & Art Direction

20 Focus on: EQUIS & AACSB – Credit where it’s due

Jebens Design www.jebensdesign.co.uk Photographs & Illustrations

Jebens Design Ltd / EFMD unless otherwise stated

Jordi Canals looks at the main drivers of business schools’ success in the 20th century along with some of the major problems and challenges they will have to deal with in the future if they want to remain relevant

Gordon Shenton provides a guide to the AACSB and EQUIS accreditation systems – their similarities and differences

©

Editorial & Advertising

Matthew Wood matthew.wood@efmd.org Telephone: +32 2 629 0810 EFMD aisbl Rue Gachard 88 – Box 3 1050 Brussels, Belgium www.efmd.org/globalfocus ©

EFMD

26 Grassroots: The sustainable MBA? Giselle Weybrecht argues that business schools have a key role in preparing the next generation of business leaders to make sustainability the norm

30 Learning on the job Innovations in information technology and financial imperatives are fuelling the return of workplace learning. Charles Jennings looks at why an age-old practice is so suited to the 21st century

34 The last frog in the well David Gosset examines the extraordinary way in which China and the Chinese people have rapidly become global citizens

38 The business of education Growing competition and changing markets have forced business schools to re-evaluate their strategies, often borrowing techniques from the business world. But, asks Emerson de Almeida, can they do this and still remain academic institutions?

44 What do deans do? Julie Davies and Howard Thomas report on a survey of British business school deans by the Association of Business Schools


3 EFMD Global Focus | Volume 04 | Issue 01 2010

Contents

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48 Economics, scientific doubt and history Frank Jan de Graaf argues that the dominance of neoclassical economic thinking in academia has contributed to the economic crisis

52 Cap that! Capgemini University is one of the world’s leading corporate universities. George Bickerstaffe meets Vice President and University Director Steven Smith

56 Fit for Purpose: Internationalisation? Nicola Hijlkema wonders whether the desire to be “international” has gone too far in business schools

38

60 Companies, business schools and the economic crisis The current recession is having significant, and potentially long-lasting, effects on the relationship between schools of management and corporations say Elio Borgonovi and Manuela Busoni

64 Focus on: CLIP – Creating business impact through learning functions The most recent EFMD Sharing Best Practice CLIP Workshop focused on the creation of short- and long-term business impact through learning functions. Andrew Rutsch describes a framework to help diagnose how to do it

44

Stuck in the past? Frank Jan de Graaf argues that the dominance of neoclassical economic thinking in academia has contributed to the economic crisis page 48


4 www.efmd.org/globalfocus

News and events in brief from the business world

Talking shop The Globally Responsible Leadership Initiative appoints Mark Drewell as CEO

2009 Ashridge Sustainable Innovation Award “The kind of innovation that will truly lead to a low-carbon economy is not just the one that is necessary to create a sustainable future, it is also the most fun to be involved in. If that combination isn’t about creating value, I don’t know what is.” These are the closing words of Jonathan Alexander’s award-winning essay How can organisations innovate to create value from the shift to a low carbon economy?

The Globally Responsible Leadership Initiative is pleased to announce the appointment of Mark Drewell as its Chief Executive Officer with effect from 1 January 2010. Mark brings a broad range of business, academic and NGO leadership skills to this new post, which has been created by the Board with the express purpose of increasing the scale and accelerating the impact of the GRLI’s work. The GRLI’s Secretary-General and founder Anders Aspling will step down from an operational leadership role but continue to serve the GRLI on a part-time basis. Commenting on the appointment, Pierre Tapie, Chairman of the GRLI Board and President of ESSEC Business School, said: “The work of the GRLI as a community of action is focused on creating a new generation of globally responsible business leaders. Our new CEO has the skills, knowledge, experience, networks and energy required to rapidly expand the reach and impact of our work”. GRLI is a global coalition of 62 companies and business schools/learning organisations focused on developing a next generation of globally responsible business leaders. Headquartered in Brussels, it was founded in 2004 on the initiative of EFMD and the United Nations Global Compact. Its scope of activities includes thought leadership, advocacy, best practices benchmarking and educational innovations. For further information please contact Martine Torfs at the GRLI Management Centre, martine.torfs@grli.org or Anders Aspling, Secretary-General of the GRLI, anders@aspling.net

Mr Alexander – who explores in his essay the imperative for innovation that is modelled on creating what is needed rather than what will make money – received 17,000 for his entry and was presented with the award by Jöran Hägglund, Swedish State Secretary for Enterprise, Energy and Communications at the EU Presidency conference “Eco-efficient Economy – Towards Innovative and Sustainable Competitiveness” on 2 November 2009. The award ceremony was the final highlight of the 2009 Ashridge Sustainable Innovation award, an essay competition run in association with the European Academy of Business in Society (EABIS), HewlettPackard (HP) and WWF. The award searched for the best ideas from MBA and other post-graduate students on sustainable innovation and creating value from the shift to a low-carbon economy and was itself a selected project in the European year for Creativity and Innovation. The publication with all the shortlisted entries can be downloaded from: www.ashridge.org.uk/SustainableInnovation


5 EFMD Global Focus | Volume 04 | Issue 01 2010

Talking shop

The kind of innovation that will truly lead to a low-carbon economy is not just the one that is necessary to create a sustainable future, it is also the most fun to be involved in. Jonathan Alexander, Ashridge's Sustainable Innovation Award Winner

EPAS Accreditation Seminar Brussels, 11 March 2010

The Business of Branding 2009 There are estimated to be over 7,000 business schools globally. Research by GMAC suggests the number of postgraduate business programmes grew by almost 4,000 in the decade to 2007. In continental Europe there are over 1,200 taught Englishlanguage business masters programmes. A search on Google for the words “business school” produces tens of millions of responses.

This seminar will focus on the presentation of the new EPAS Manual and Application Datasheet, the interpretation and practical application of the EPAS Standards and Criteria as well as the key stages of the EPAS Accreditation process. The seminar is targeted at institutions considering applying for EPAS accreditation or those holding active eligibility for at least one of their programmes. It will be relevant for Deans and Directors, Associate Deans, Directors of major programmes, Directors of External Relations and Accreditation Officers. EPAS Peer Reviewers are encouraged to attend as well in order to receive an update on recent EPAS developments. For more information please contact: epas@efmd.org

Taken together with the current global economic downturn, which is causing uncertainty for business schools, there has never been a more important time for schools to clearly explain and differentiate their offer and market the benefits of studying at their school. “The Business of Branding” survey has run for five consecutive years collecting data on perceptions of schools and their positioning in the market, helping schools better understand how they can successfully communicate with key target audiences. The 2009 research was conducted by CarringtonCrisp in partnership with the Association of Business Schools (ABS) and EFMD during April/May using an online questionnaire. The research sought to examine how and why students choose different schools, what potential students understand about school reputation, information sources used when searching for schools and courses, how schools could add value to the business school experience, attitudes to career and alumni services and overall perception of schools. This information enables business schools to make betterinformed decisions about marketing themselves to different audiences and building a strong and sustainable brand.

Job opportunities across EFMD network EFMD has a job posting service that is free for all members and which is showcased on a six-weekly basis to over 16,000 contacts via the EFMD eNews service. During 2009 over 300 positions were advertised with a number of successful candidates coming via the EFMD network. For more information please visit www.efmd.org/jobs or contact matthew.wood@efmd.org

Since the start of the study more than 45,000 respondents from 80 business schools in 20 countries have completed the survey. In 2009 5,103 respondents broken down in to distinct groups completed the survey - first-degree students, full-time MBAs, part-time MBAs, other business masters, PhDs, alumni, faculty and administrative staff. The full executive summary is available via: www.efmd.org/businessofbranding


6 www.efmd.org/globalfocus

News and events in brief from the business world

Talking shop Drucker Forum Review

Five new schools receive EQUIS accreditation EFMD would like to warmly congratulate the following schools, which were recently awarded EQUIS accreditation. This takes the number of accredited schools to 122 across 34 countries. Telfer School of Management University of Ottawa, Canada School of Management, Fudan University, China Université Paris-Dauphine, France División Académica de Administración y Contaduría ITAM – Instituto Tecnológico Autónomo de México, Mexico School of Business, National University of Singapore, Singapore

The Peter Drucker Centennial Forum, held in November in Vienna, was attended by some 350 participants from all over the world in the historical auditorium of the Federation of Austrian Industry. Several thousands also tuned in to the live webcast from the opening session, featuring Doris Drucker, the 98-year-old widow of Professor Drucker, and Jim Herbolich, Director of Network services at EFMD. Reactions from speakers, participants and the media were enthusiastic. Following the event the Financial Times published a column by management writer Stefan Stern with the headline "Drucker's ideas stand the test of time". From the contributions by such eminent speakers as CK Prahalad, Charles Handy, Yves Doz, Phil Kotler, Fredmund Malik and Thomas Sattelberger it emerged clearly that Peter Drucker still provides a valid and relevant view of management on which ideas and concepts for today's and tomorrow's world can be based. A complete review of the forum including the videos, slides and photographs can be accessed on http://bit.ly/Forum_nov19_20 The Peter Drucker Centennial Forum was organised by the Peter Drucker Society of Austria and EFMD. The second global Peter Drucker Forum will be held in Vienna on 18 – 19 November 2010 with the theme "Managing in the Next Society".

Professor Eric Cornuel, CEO of EFMD, said: “From its inception EQUIS has targeted top-quality international business schools and we are delighted to welcome five more leading schools into the EQUIS community. EQUIS started as a European initiative for the benchmarking and accreditation of business schools but it is now the leading global accreditation system. EQUIS has had an enormously positive impact on the quality of management education worldwide”.

2010 Case Writing Competition The 2010 EFMD Case Writing Competition is going green and virtual. We will no longer be accepting paper submissions. All enquiries will be dealt with virtually. We have simplified and clarified the case submission process. For more information, please contact: Emmanuelle Duval, + 32 2 629 0810 Emmanuelle.duval@efmd.org


7 EFMD Global Focus | Volume 04 | Issue 01 2010

2010 Seminars

EFMD Advisory Seminars EFMD Advisory Services assist members in the continuous quality improvement of their programmes, activities and governance.

Seminars are interactive and include the intervention of experts and the presentation of a recent case study. As the seminars are limited to a maximum of 20 participants the opportunity to share ideas, best practices and learn from colleagues and speakers is a key component of the seminar design. In 2010 seminars will be organised at the EFMD head office in Brussels on the themes listed.

9 March Integrating Executive Education into Business School Strategy

For more information visit: www.efmd.org

28 September Students Selection

EFMD aisbl Rue Gachard 88 Box 3 1050 Brussels Belgium

5 October The Impact of Bologna on Programme Design

Phone: +32 2 629 08 10

23 March Faculty Management in Business Schools 20 April Creating Competitive Advantage with Pedagogical Innovation 4 May Career Services in Times of Crisis – Lessons Learned 22 June How to create an International Learning Experience for the Home Students

5 November Internationalisation of Business Schools 23 November Intercultural Management: International Cooperation and Project Management in Business Schools


8 www.efmd.org/globalfocus

LBS has directed its commitment to globalism into a huge diversity in faculty and student bodies and into programme content rather than direct activities overseas


London calling: Sir Andrew Likierman interview by George Bickerstaffe

9 EFMD Global Focus | Volume 04 | Issue 01 2010

Sir Andrew Likierman is just one year into his term as Dean of London Business School (LBS). It is a position he did not expect, perhaps even did not particularly want. But it is one that he is enjoying immensely. The reason, he says, is that he knows LBS so well; “I’m very comfortable with the place.” Indeed he should be. Sir Andrew has been a faculty member at the school on and off over the last three decades, virtually since the school’s beginning. He has had a long and varied career. In his own irreproachable mini version of pantouflage, he has moved easily between academia (exclusively at LBS apart from a short spell at Leeds University), public life and the private sector. All three, he believes, have informed and influenced the others. He most recently rejoined LBS in 2004 after 10 years running a department in HM Treasury, the British government’s finance ministry. The son of refugee parents from Eastern Europe, Sir Andrew has variously run a textile plant in Germany and formed, and subsequently sold, his own company selling business books. Being a Dean was not a job he particularly coveted and he acknowledges that it is a testing role even for his undoubted management and business skills. “It’s a very complicated management role by any standards,” he says. LBS has perhaps made it even more challenging by declaring that they want to be “the pre-eminent global business school”, a statement that adorns the wall of the school’s main reception area.

A year into his job as Dean of London Business School, Sir Andrew Likierman talks to George Bickerstaffe about his polymath career


10 www.efmd.org/globalfocus

LBS has directed its commitment to globalism into a huge diversity in faculty and student bodies and into programme content rather than direct activities overseas. On the MBA programme, for example, students come from 72 different countries and 91% are from outside Britain. The 99 faculty members come from over 30 countries. The school has, however, opened a centre in Dubai where it runs an Executive MBA that Sir Andrew expects to expand to include other programmes in the future. He is also not opposed to opening further satellites though he is concerned about the effect of splitting faculty between different locations.

It is this range of ringside seats that has given him a multi-layered view of the global financial crisis of the last couple of years. But it is not a view that persuades him, as it has many, to cast business schools (especially their financial teaching) as the villains in the current crisis. “There were credit crises long before business schools were ever dreamed of,” he says. “I don’t put business schools high in the hierarchy of blame. There are others way in front of them.” Such as?

“A lot of people have been involved. You can think of those who lent money to people to buy houses they couldn’t afford, rating agencies, regulators, “It’s not as if we have a huge faculty,” he governments and so on. It seems to says. “It’s a community. And we do value me business schools come rather low having everyone together on one site.” on the list. They would have to have

had gigantic influence even to be able to claim they are to blame.” Sir Andrew also points out that, unlike some American business schools that are often keen to promote a coherent and concerted view of financial or economic issues, LBS and most other European schools have a much wider range of views within their faculty members and are not “peddling a party line” as he says. As a result, he believes business schools in Europe have understandably been somewhat less defensive than some American schools over any role they may have had in the crisis. He also argues that critics have muddled and conflated two unrelated issues – risk management and ethical behaviour. “They are quite different things and should not be confused,” he says. “You can manage risk badly and be ethical and, equally, you can manage risk well and behave unethically.” Therefore, he thinks, there is no reason for a radical change to the business school curriculum. “We have always adapted the curriculum of our programmes according to circumstances and we always will,” he says. “I don’t think it [the credit crisis] is a case for saying the model is bust and it’s all over.”

IMAGES COURTESY OF london BUSINESS SCHOOL,

Surely this is a daunting target given the As well as Dean, Sir Andrew is, and competition? has been for some time, Professor of Accounting and Financial Control at Well, he says, it’s a vision not a target. LBS. Until the end of 2008 he was a “It’s not a plan for getting from A to B,” non-executive Director of the Bank of he says. “But it does affect everything we England, Britain’s central bank, and do. Everybody here is aware of the global still occupies a similar position at nature and quality of our programmes, Barclays Bank. He is also Chairman our faculty and our student body. I know of the National Audit Office, a body that people say ‘oh vision is just blah blah’. audits central government accounts But it’s not blah blah for us. It does and reports to Parliament on the value actually make a difference to what we for money achieved by government do here.” projects and programmes.


London calling: Sir Andrew Likierman interview by George Bickerstaffe

Sir Andrew argues that the management education landscape in Europe has been significantly changed as a result of the Bologna agreement

72

Sir Andrew is certainly not averse to making changes to the management education model, though. After previously setting its face firmly against any such move, in September 2009 LBS launched its first Master in Management (MM), an 11-month MBA-like programme aimed at recent graduates (average age 22) with less than one year’s work experience. When the new programme was first proposed it provoked strong opposition from MBA students (average age nearly 29), worried that MM graduates would undermine the value of the MBA degree and rival them for jobs in a tight recruitment market. There are no shared classes though there is increasing interaction between the two groups on campus via the numerous student clubs (everything from the Acting Club, the Entrepreneurship Club, the Pratham Club [which helps to educate street children in India] through to the Wine and Cheese Club) that are a key feature of student life at the school.

11 EFMD Global Focus | Volume 04 | Issue 01 2010

“I don’t rule it out but we are not saying that the next stage is four or five more specialised masters,” he comments. Sir Andrew has been involved in management education for a long time (he was the Founding Director of the LBS Executive MBA programme back in the 1980s) and has seen many changes. What does he feel have been the most significant and what does he foresee for the future? “Just to pick a couple of issues, I think there was an initial feeling that maths would solve everything,” he says. “Management became very quantitative. Now there has been a shift to softer factors and more focus on the management of people. A second factor is that management education is now focused on the problems of individual organisations rather than on taking a general view. Companies want academics to address their own issues. That’s what’s behind the rise of customised programmes and so on.”

On the MBA programme, students come from 72 different countries and 91% But perhaps the greatest change has been are from outside Britain. close to home, at LBS. The 99 faculty members In any case, he is unapologetic about come from over 30 countries launching the programme. He argues that the When he first arrived at the school, he says, it management education landscape in Europe has been significantly changed as a result of the Bologna agreement. The implication, he says, is that business schools are now able – and perhaps even required – to provide management education at every stage from pre-experience to executive education. So LBS has to compete in what is effectively a new market.

The Master in Management concept has proved enormously popular with both students and recruiters in mainland Europe. And coming rather late to the party, claims Sir Andrew, has allowed LBS to define exactly what such a programme is and be able to design it as very distinct from the MBA. He is confident that, with MM students only numbering 100 out of total student body of around 1,200 (though their numbers may increase in the future), there will be no conflict with or cannibalisation of the MBA and that the nature of the school will be relatively unchanged. “I don’t think they’ll alter the character of the school in ways that would be destructive,” he says. “They are bringing a new element.”

was a British faculty teaching British students. As he recalls it, of the 39 faculty at the time 36 were British and the other three were from Australia or New Zealand. Virtually all the students were British – and the vast majority were men. “The focus of the school has changed very radically since then,” he says. “It has gone from being very local to totally global.” As for the future, he sees the rise of Asian economies and Asian business schools as likely to have a profound effect on the way we think about management. “I think there will be elements involved that we can barely conceive of yet. It is likely that management thinking will be much less dominated by America than it has been in the past,” he says. “The way we start thinking about problems may not be the way we are used to thinking about them.” An urbane and affable man, Sir Andrew says he would not have wanted to do anything else in his life. He says that as an organised person his only comment is that his life has not been as organised as he had expected. But he still counts himself a lucky man.

What he probably will not do, though, is add any further specialised masters programmes Perhaps LBS has also been lucky to find to the already hugely successful 10-month Master in Finance. him on its doorstep.


12 www.efmd.org/globalfocus

The 2009 Emerald/EFMD

Outstanding Doctoral Research Awards Winners

International recognition and cash awards for the best doctoral research.

Entries for the 2009 Emerald/ EFMD Outstanding Doctoral Research Awards came from over 170 institutions worldwide. There were overall winners from nine countries in the twelve subject categories, sponsored by a selection of Emerald’s journals. Each award-winning entry will receive a cash prize of €1,500 (or currency equivalent), a certificate, a winners’ logo to attach to correspondence and the prospect of an offer of publication in the sponsoring journal - either as a full paper or an executive summary – at the discretion of the editor. In addition, a number of Highly Commended and Special Commendations, from 17 countries, were bestowed.

Educational leadership and strategy Winner Orly Shapira-Lishchinsky Organisational ethics as predictors of teachers’ work withdrawal behaviors Bar-Ilan University, Israel Hospitality management Winner Jill Poulston Ethical issues and workplace problems in commercial hospitality: a New Zealand study Auckland University of Technology, New Zealand

+ Winner Ines Ghorbal-Blal An exploration of the role of the construct of control in expansion strategy of hotel chains: a multiple-case study Ecole Hoteliere de Lausanne, Switzerland Doctorate conferred by Virginia Polytechnic Institute and State University (Pamplin College of Business), USA

Human resource management Winner Karin Bredin Human resource management in project-based organisations – challenges, changes, and capabilities Linköping University, Sweden Information science Winner Jennifer Berryman Judgements during information seeking: policy and research workers’ assessments of enough information University of Technology Sydney, Australia Interdisciplinary accounting research Winner Christina Boedker Local players and global strategies: the transformative effects of accounting in strategising University of New South Wales, Australia


13 EFMD Global Focus | Volume 04 | Issue 01 2010

Doctoral Award Winners 2009

“On behalf of Emerald & EFMD, we are pleased to pledge our ongoing support for the Awards in 2010, and to contributing to outstanding scholarship in the field of Doctoral Research in business and management.” Dr John Peters CEO of Emerald Group Publishing Ltd Prof. Erc Cornuel Director General and CEO of EFMD

Knowledge management Winner Dan Holtshouse Knowledge management and the future of the knowledge worker The George Washington University, USA Leadership and organisation development Winner Chin-Chung Chao Cultural values and anticipations of female leadership styles in non-profit organisations: a study of rotary clubs in Taiwan and the United States University of Nebraska at Omaha, USA

Management and governance Winner Matthias Seifert Intuition and rationality in managerial decision behaviour IE Business School, Spain Doctorate conferred by University of Cambridge, UK

Doctorate conferred by Bowling Green State University, USA

Marketing research Winner Annie Pei-I Yu The impact of financial service type on consumer relationship engagement motives: an empirical investigation of retail banking consumers The University of Edinburgh, UK

Logistics and supply chain management Winner Alex Michel Behavioral supply management – a review of human judgment and decision making theory and its integration into the field of supply management WHU – Otto Beisheim School of Management, Germany

Operations and production management Winner Dirk Breitschwerdt International production mandates of subsidiaries – conceptual framework and empirical evidence from German MNEs WHU – Otto Beisheim School of Management, Germany

Property investment and finance Winner Vivek Sah Asset acquisition criteria: a process tracing investigation into real estate investment decision making University of San Diego, USA Doctorate conferred by Georgia State University, USA

Further listings Further information including a list of the Highly Commended and Special Commendations will appear on the Emerald and EFMD websites. http://info.emeraldinsight.com/ research/awards/2009_odra.htm www.efmd.org/odra


14 www.efmd.org/globalfocus

Jordi Canals looks at the main drivers of business schools’ success in the 20th century along with some of the major problems and challenges they will have to deal with in the future if they want to remain relevant

Can they fix it? The many leadership and managerial challenges of the 21st century will sustain strong demand for professional managers and entrepreneurs


15 EFMD Global Focus | Volume 04 | Issue 01 2010

Can they fix it? by Jordi Canals

Business schools are young institutions. They first appeared about a century ago in America, 50 years or so ago in Europe and much less than that in other parts of the world But, generally, in that short time they have had a positive impact on people, companies and society. There is wide experience of the positive effects of their programmes in the lives of many people and the success of many companies. Some failures and mistakes (including those related to the 2007 financial crisis) cannot hide the basic fact that the effects of business schools in developing professionals and through them fostering job creation, investment, innovation and new firms has been impressive. In addition, leading business schools have become important paradigms of excellence. Many have globalised education in ways much older and renowned universities have never done. The many leadership and managerial challenges of the 21st century will sustain strong demand for professional managers and entrepreneurs. Business schools will continue to have a decisive role in educating them and providing society with the managerial talent needed to face these challenges. While it is true that business schools prospered in the benign economic conditions of the second half of the last century it is also true that their impact on entrepreneurs and professional managers was at least partially responsible for that economic growth in the first place. Though individual business schools took different approaches, all, both in America and Europe, adopted a similar model that was the key to their success. This model was based on an academically qualified full-time faculty that carried out relevant research and attracted a high-quality

student body. These in turn proved highly effective recruits inside companies, increasing corporate interest in using business schools as recruiting and training grounds. The positive experience of both alumni and companies was key in funding business school endowment, particularly in America – an effect that was vitally important to building financially solid educational institutions. This model has been the linchpin of the success of business schools. Nevertheless, it has created its own problems. Moreover, the business context in which graduates have to work has also changed significantly. The current financial crisis and the eroding of corporate reputations have given rise to strong criticisms of business schools and their role in those events. For these reasons, business schools will have to change if they want to keep having a positive impact on people, firms and societies. These criticisms fall into two categories. The first is related to factors external to business schools, mainly the financial crisis, globalisation, and the notion of the firm and its reputation. The second category has to do with internal deficiencies or deficits in business schools themselves.

External factors The role of business schools in the crisis As happened with the dotcom crisis at the end of the 20th century, many are pointing fingers at business schools over the current financial crisis. Though many MBA graduates did indeed end up in financial institutions, their relative overall numbers were not large. The claim that business schools were the main “feeders� of investment banks is not accurate. A more important question is whether schools could have provided better frameworks of business and ethics and, more important, better ways of integrating ethics with finance and strategy; or whether senior managers


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There is no single answer but it is nevertheless important to understand why a business school exists and what it wants to do. Each school has its own views but it is good to make them explicit and connect them with its strategy, faculty development, programme design and research initiatives.

educated in good graduate schools could have done more to avoid disaster. And, more importantly, whether those graduates could have provided a better example of professionalism and integrity.

Globalisation Together with the current economic crisis, globalisation and its impact on the business world is another area of concern. Many Western companies have failed in their efforts to become more efficient in their international operations.

Governance deficit Business schools are influential institutions. As such, their governance matters. Unfortunately, academic institutions in general have a poor track record in this area.

In this area, business schools have not done a good job in making clear and explicit the specific demands of globalisation, crosscultural management and the variety of dimensions, experiences, and human and cultural values to be taken into account.

There are several levels of governance in business schools to look at. The first is the relationship between the parent university and the business school, a link that can mostly lead to situations of lack of autonomy, both strategic and financial.

The crisis and corporate reputation

Second is the accountability and powers of the dean and senior faculty. There is no single best model here but it is certainly an issue not always well defined in business schools.

The third relevant factor is the serious damage to corporate reputations that has unfolded over the past decade. In many countries, companies used to be admired institutions that created jobs, generated investment and were drivers of progress.

The third is the role of faculty in designing programmes, shaping research initiatives, promoting their peers to tenured positions and shaping the strategy of the school. Good governance requires a stronger faculty commitment to the long-term development of their schools.

Public opinion in some countries now sees business leaders as opportunists with a short-term focus on their own benefits and privileges and responsible for many of today’s corporate disasters.

Humanistic deficit In the early part of the 20th century prominent business people believed that companies had a social purpose beyond just making money.

Internal factors

Unfortunately, the challenges for business schools do not come only from the outside world. Their own development and success have sown the seeds of serious internal challenges that must be tackled. There are some areas with major deficits at many business schools: mission, governance, humanistic approach, financial and relevance.

IMAGE COURTESY LONDON BUSINESS SCHOOL

Mission deficit

IMAGE COURTESY OF AIESEC

Good governance needs to give faculty an appropriate role in business schools, one that neither blocks change nor makes faculty members alienated from the management of the school.

Business schools have been slow in reacting to these challenges. As institutions educating managers and business leaders, business schools have to rethink the role of companies in society, the job of business leaders and how to include these dimensions in their programmes.

Some business schools do not have a clear sense of mission of the role they want to play in society. It is clear that all of them want to help educate people and develop new knowledge. The question is what balance between those two activities business schools want to have.

As institutions educating managers and business leaders, business schools have to rethink the role of companies in society and the job of business leaders


17 EFMD Global Focus | Volume 04 | Issue 01 2010

Can they fix it? by Jordi Canals

sciences schools. Unfortunately, this research, even if (or perhaps because) it was adorned with an allegedly superior academic rigour, became increasingly irrelevant to management practice. A relevance deficit also became clear in schools’ programmes. Many top US business schools did not offer executive programmes until quite recently. It was, in part, a matter of choice but also attributable to the lack of faculty interest in working with senior executives on real business problems.

IMAGE COURTESY LONDON BUSINESS SCHOOL

However, the risk of irrelevance in research is smaller when faculty members have to work in a classroom with senior executives. Working with experienced managers stretches the capabilities and expertise of faculty and makes them more aware of real corporate problems.

Financial deficit The creation of business schools through the generosity of major donors was related to the conviction that the education of general managers in a rigorous and ethical way was important for the good of society. Management and financial theories and the stronger role of capital markets as drivers of modern capitalism have displaced some of those early ideals. Getting results, irrespective of what happens to individuals working in the organisation, has become the dominant paradigm in the practice of management. The outcome has been the growth of more impersonal organisations where individuals are just one more resource and a rise in employee dissatisfaction. The claim that people are important is stronger than ever; but, in practice, many decisions are taken without considering their impact on people.

The challenge for business schools is to develop an economic model that can make them sustainable in the long term

Business schools have contributed to the spread of this view by underplaying the role of individuals in organisations and business decisions.

Relevance deficit After the second world war business schools became relevant institutions because they helped tackle a very important need: the education of professional managers and the development of a body of knowledge about the main management disciplines.

American business schools used to rely on their endowments to pay higher salaries or attract students and were consequently less dependent on academic fees. In Europe schools had to be closer to the real world with more emphasis on executive education. In both cases, there is a problem. For American schools the endowment model is good when stock prices go up but becomes a nightmare when market prices fall. For European business schools, executive education is a distinguished undertaking for many reasons but in some cases business schools only do it for financial reasons, which is not the best motivator. The challenge for business schools is to develop an economic model that can make them sustainable in the long term. There is no single formula. Each school has to design its own pattern. Their development will be one more test of how well a business school is run.

New challenges for business schools

There are some other ingredients in the current model of business schools that require additional work. Companies, recruiters and executives expect this. Some have been referred to earlier. Below are highlighted others that have been neglected and are more difficult to tackle: integration, leadership development, a humanistic view of the firm, life-long learning and organisational structure.

In the 1970s and 1980s many business schools became more interested in promoting a type Integration of research similar to that of other social The modern firm as it developed was built


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around business functions: purchasing, manufacturing, logistics, marketing, sales and so on. Over the past few decades, many companies have grown in complexity. Some basic processes can still be managed and run on a functional basis but many others require a more complex organisational design. Unfortunately, business schools in general have not been very quick to react. Business programmes and research are still based around business functions. This is not wrong. What is wrong is what happens with courses where the reflection, diagnosis and decisions around business problems are considered exclusively from the perspective of the specific business functions (marketing, finance, operations, and so on) not the perspective of the whole company.

Life-long learning

The explosion of diversity and complexity in all areas of knowledge makes a significant part of the educational process obsolete more quickly than in the past. This is obvious in scientific disciplines such as physics, biology Teaching integrated courses is an important or chemistry. And it is becoming evident in step. But helping people think in an integrated business leadership and management. This way is a transformational experience business requires a commitment to life-long learning and education. schools should aim at.

Leadership development An indirect effect of the lack of integration in business education is the fact that there are not many coherent and comprehensive models of leadership development or management. As with integration and cross-disciplinary, cross-functional learning, leadership development is a complex process. And it is one that many schools leave to the spontaneity of students and faculty. Moreover, many schools have neither a view of what a senior manager is and what he or she should do nor how to educate for those capabilities if they did know.

Humanistic view of the firm The dominant economic and sociological paradigms in management have produced a simplified and warped view of the individual in organisations. It replaces the notion of individual freedom with determinism. Given the right incentives or the right environment, people will always behave in a certain way. And the role of incentives and the environment is to shape human behaviour at the service of organisations’ goal of maximising profits. This assumption is at odds with one of the basic tenets of many companies and management scholars who highlight the importance of these humanistic roots: people do matter. There is a need to make firms more human, moving beyond the notion of pure efficiency.

Continuous education and learning is obviously a big challenge. But it also is a great opportunity for business schools. Many graduates are eager to keep learning, develop new capabilities or think about a second or a third professional life. In addition, companies and society need business schools to keep contributing to the development of managers' knowledge and capabilities.

Even if the challenges are huge, the need for excellent business schools is even deeper today than it was a century ago when the first schools were founded

This challenge requires that schools adopt a new strategy, more open to considering undergraduate and graduate programmes as initial steps in a professional development process. They also need to think about executive education programmes not as a portfolio of disparate areas and topics but as a way that may help cover the new educational needs of individuals and companies.

Conclusion

This article has briefly examined some complex and demanding needs that have an impact on business schools and how their mission is perceived by the business world and society. Business schools alone cannot solve these problems. Nevertheless, business schools and their faculties have the potential to help address many of them. Even if the challenges are huge, the need for excellent business schools is even deeper today than it was a century ago when the first schools were founded. The opportunities for great educational programmes and relevant research are bigger than ever.

FURTHER INFORMATION

This article is an edited version of a longer article Business schools in the twenty-first century: Strategic, organizational and managerial challenges, a chapter to be published in the book The future of leadership development: The role of business schools in 2010. ABOUT THE AUTHOR

Jordi Canals is Dean of IESE business school


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19 EFMD Global Focus | Volume 04 | Issue 01 2010

A N N O U N C E M E N T

The European Hopefuls for Innovation award is now open! With the support of the European Commission, The European Hopefuls for Innovation - Innovact enables young students to implement their projects at European level. All students with a creative idea for a business project can, with a team or individually, take part in the 8th edition of the European Hopefuls for Innovation whose aim is to reward new and challenging projects that can either be at design stage, in progress or already launched. The selection committee composed of professionals (heads of companies, journalists, scientists) will reward the candidates who - whatever the product or activity - show imagination as creators.

Deadline for receipt of application forms: Friday 22 January 2010 The winners will receive prize money and will benefit from media coverage: 1st prize: 3,000 Euros - 2nd & 3rd prize: 1,500 Euros. In order to encourage their projects, the 25 finalist candidates will be invited to come (transport and accommodation free) on March 2 and 3 2010 in Reims to the 14th edition of the European forum for innovative growth companies, Innovact 2010. The Forum will gather 4000 professionals from 20 countries and 220 young European companies.

Join our Facebook Community! Join our Facebook Community! The European Hopefuls for Innovation now have their own private group on Facebook. Within the group, you and other candidates will be able to exchange ideas and discuss your projects and innovations. Join the “European Innovation Hopes 2010� group on Facebook now!

The Awards ceremony will take place in Reims on March 2 2010. If you wish to participate, download the application form on: www.innovact.com; www.letudiant.fr; www.lors.fr; www.lentreprise.fr; www.ffbde.fr

Contact: Dahvia Ouadia +33 1 53 10 29 89 - dahvia.ouadia@verbatim-communication.fr


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Focus on... AACSB & EQUIS

Credit where it's due Gordon Shenton provides a guide to the AACSB and EQUIS accreditation systems and their similarities and differences

It is now just over ten years since the launch of EQUIS by EFMD and the transformation of the American Association of Collegiate Schools of Business into the Association to Advance Collegiate Schools of Business, now known as AACSB International. AACSB is a much older institution (it was founded in 1916) and carries with it a long tradition in its home market. But in its operations outside America AACSB and EQUIS (European Quality Improvement System) are of similar age and each, within its own distinct philosophy and set of founding values, has gone through a similarly intense and rapid learning curve to reach their present levels of maturity. Standards and processes have been defined, tested and redefined in the light of experience. In the past decade EQUIS has accredited 122 schools and AACSB has accredited 110 outside America, of which 17 are in Canada. During this period, the two systems have been in mostly friendly and probably constructive competition, both learning from the other in some areas while offering the market a clearly differentiated alternative. The purpose of this article is to give readers a brief overview of the main similarities and differences between AACSB and EQUIS. The analysis is, of course, from the EQUIS perspective and reflects the personal views of the author. However, it is intended to be informative and as far as possible to avoid any judgments. Both accreditation systems are managed by not-for-profit membership organisations

that exist independently of any government or public body. Both define their underlying mission as the defence of high standards of quality in higher education in the field of business and management. Both seek to provide a tool for the continuous improvement of the institutions that go through their accreditation processes. Both see the accreditation label as a contribution to international market transparency regarding quality institutions rather than as a system of regulation or compliance. However, beyond these very substantial similarities, which have always given people inside AACSB and EFMD a sense of common purpose, there are significant differences that derive from the nature of the organisations. Until AACSB began to accredit more diverse types of institutions internationally, its membership was essentially made up of universities represented by their colleges (faculties) of business administration. The result was that the academic imperative has always been paramount in the AACSB system. Indeed, AACSB was originally founded to defend the intellectual standing of business studies as an academic discipline in university-based (collegiate) education in the face of widespread scepticism regarding its legitimacy. EFMD, on the other hand, was created with a double constituency of schools and large corporations. Its founding mission encompasses a wider concept of management development than just

AACSB & EQUIS AT-A-GLANCE AACSB AACSB was founded in 1916 but has only been operating outside of America for about ten years Like EFMD AACSB is a not-forprofit membership organistion With AACSB it typically takes three to five years to gain accreditation EQUIS EQUIS was launched by EFMD in 1999 Accreditation for EQUIS typically takes one to two years


Credit where it's due: AACSB & EQUIS by Gordon Shenton

21 EFMD Global Focus | Volume 04 | Issue 01 2010

The two accrediting systems have been in mostly friendly and probably constructive competition, both learning from the other in some areas while offering the market a clearly differentiated alternative

university-based higher education. Relevance to business and to the management profession has been a major value for EFMD and EQUIS from the outset. In part this reflects the fact that management education in continental Europe has always been less exclusively focused on university values. Its development was led by private market-oriented non-university institutions often heavily involved in serving a corporate clientele. One might add that EQUIS was created at a time when the challenge of creating a European market for higher education was very much on the political agenda. The ideal of integration while respecting diversity and national identity inspired much of the early work within EQUIS. These factors have determined the differing scope of assessment in each process. Within the AACSB system accreditation covers all degree programmes in business and is given to the whole university or institution and not just to part of it. AACSB accredits institutions but assesses programmes. An important part of the eligibility process is, therefore, the determination of which programmes are to be included or excluded in the assessment. EQUIS on the other hand does not focus exclusively on degree programmes. It assesses the whole entity that is applying for accreditation with no exclusions, including non-degree programmes in the executive education area. A key issue in the EQUIS eligibility phase is, therefore, to identify the entity – business school or faculty within a wider university – that is to be assessed. A consequence of this focus on the business school or faculty as a whole is that EQUIS places great emphasis on

issues of governance, internal management systems and strategic coherence. A great deal of benefit in the feedback given during the accreditation process lies precisely in the area of institutional development. AACSB, in contrast, defines itself as missiondriven and constantly looks for evidence of explicit alignment between the mission statement and the institution’s operations. The 21 Standards in the AACSB system are organised into three groups: – Strategic Management Standards, which cover the mission, appropriateness to higher education and resource adequacy – Participant Standards, which cover students and faculty – Assurance of Learning Standards, which cover programme quality. Within this range of criteria, the crucial challenge for schools is to satisfy the requirements regarding faculty sufficiency, faculty qualifications, faculty deployment across the degree programmes and the intellectual contributions of faculty. The tables must be completed with details and ratios of participating faculty, supporting faculty, academically qualified faculty and professionally qualified faculty, together with the five-year track record of intellectual contributions for each faculty member. These force schools to improve their internal reporting systems and concentrate their minds on key issues of academic quality. It is here that one observes the greatest continuity between the original AACSB American approach and the revised set of standards that have been introduced to adapt the system to its new international reach. A major difference between EQUIS and AACSB lies in the breadth of coverage within the assessment criteria.

122 In the past decade EQUIS has accredited 122 schools and AACSB has accredited 110 outside America, of which 17 are in Canada


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Focus on... AACSB & EQUIS

The EQUIS standards and criteria are organised into 10 chapters: Context, Governance and Strategy; Programmes; Students; Faculty; Research and Development; Executive Education; Contribution to the Community; Resources and Administration; Internationalisation; and Corporate Connections. The academic quality of a school’s operations is extensively assessed in the sections on programmes, students, faculty and research. Although there is less emphasis on input criteria than in AACSB, EQUIS is very demanding in all these areas. In fact, there has probably been convergence upon AACSB rigour in the areas of faculty qualification and research. Since its creation, failure to achieve EQUIS accreditation or the granting of accreditation for three rather than five years has often been due to weaknesses in faculty and research. EQUIS also requires that schools meet high standards in two other areas that relate to its founding principles. The first of these is the international dimension, which is expected to be present in all aspects of a school’s organisation and activities including governance, announced strategy, programme positioning and content, student mix and mobility, faculty profile, research output, institutional alliances and corporate connections. From the beginning EQUIS was conceived as an international system and has always carried the flag for internationalisation. An important principle is that to be accredited by EQUIS a school must be more than just a renowned institution in its home market. It must demonstrate substantial international outreach. More precisely, a school cannot argue that its mission precludes an international strategy.

The second dimension is that of professional relevance and corporate links. There are separate chapters on executive education and corporate relations and an expectation that evidence of a structured interface with the corporate world will be found in the school’s governance system, programme design processes, student selection and career services, faculty exposure to business and the professions, and in the professional impact of research. EQUIS demands a lot and it can be argued that pursuing quality in all the areas listed above may lead to strategically incompatible situations. Developing a faculty that can at the same time deliver high-quality research, teach effectively in executive education and function in international networks is a big stretch. Yet these are the key challenges for business education and each school has to position itself in relation to all three. Although EQUIS was not set up on any one business school model, it does carry a vision of an ideal balance between academic quality, professional relevance and internationalisation. As regards process, there are many similarities of a general nature between the two accreditation systems. Both schemes are rooted in the twin concepts of self-assessment and external review by peers. Both also rely on the commitment of experienced deans who give their time to the advancement of the profession either as peer reviewers or as members of the operational committees (one can note in passing that a surprising number of working deans are active in both accrediting bodies). However, in detail the two systems lead to a very different experience for schools going through their processes.

Although EQUIS was not set up on any one business school model, it does carry a vision of an ideal balance between academic quality, professional relevance and internationalisation


23 EFMD Global Focus | Volume 04 | Issue 01 2010

Credit where it's due: AACSB & EQUIS by Gordon Shenton

In the case of EQUIS, the first step is to submit a formal application accompanied by a short fact sheet (the Datasheet). This is followed by a one-day Briefing Visit by one of the EQUIS team. In addition to providing practical information and advice about the EQUIS process, he or she makes an initial assessment against the eligibility criteria and formulates a recommendation to the EQUIS Committee regarding eligibility. If the EQUIS Committee, which meets four times a year, is satisfied that the school has a reasonable prospect of achieving accreditation within two years, it gives the green light and draws the school’s attention to possible areas of concern.

passed on with its recommendation to the Accreditation Coordinating Committee (ACC) for concurrence. At the same time, the PAC assigns a mentor whose task is to guide the school through the process and help it design an Accreditation Plan in which it will address all the issues identified in the eligibility phase and in the school’s own SWOT and gap analyses. Once the PAC has accepted the Plan, it is forwarded to the Initial Accreditation Committee (IAC), which takes over the responsibility for monitoring the school’s progress. The mentor continues to help the school with the implementation of the Accreditation Plan and informs the IAC annually on the applicant’s progress.

3

EQUIS offers three accreditation possibilities: five-year accreditation, three-year accreditation The school is then expected to set a date for with an obligation to submit the Peer Review visit and to begin work on Once the IAC is satisfied that the school has annual progress reports on the Self-Assessment Report. Guidance is specified areas of concern made sufficient progress, it authorises the provided by a detailed Process Manual. applicant to begin the initial accreditation and non-accreditation The Peer Review team of four people spends two-and-a-half days interviewing a broad range of stakeholders within the school and writes a report with its assessment and recommendation regarding accreditation. The report is then examined by the EQUIS Awarding Body, which makes the final decision on accreditation. There are three possibilities: five-year accreditation, three-year accreditation with an obligation to submit annual progress reports on specified areas of concern and non-accreditation. The requirements for re-accreditation are identical to those for initial accreditation except that the focus will be somewhat different and take into account what has happened since the previous assessment. In the AACSB system, schools enter a Pre-Accreditation Process. This begins with an Eligibility Application that is reviewed by the Pre-Accreditation Committee (PAC) and

process. At this point the IAC appoints a Chair of the Peer Review team (PRT), who takes over from the mentor in providing guidance to the school in preparing its Self-Evaluation Report (SER). Once the SER is completed, it is submitted to the PRT and the IAC for review. The PRT drafts a pre-visit letter in which it flags up any concerns that it may have about the SER. This is forwarded to the IAC for concurrence. Upon completion of the on-site visit, the PRT immediately informs the school of its conclusion and sends its report to the applicant and to the IAC. In cases where the IAC does not immediately concur with the PRT recommendation there is a process of arbitration until agreement is reached. The final decision can be accreditation for five years, deferralfor one year or non-accreditation. Once accredited, schools enter the Maintenance of


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Focus on... AACSB & EQUIS

Accreditation Process monitored by the MAC end of AACSB on-site visits. This underlines the fact that the team is only making a (Maintenance of Accreditation Committee). recommendation and that it is the EQUIS Several very significant points of divergence Awarding Body that makes the final decision. emerge from this analysis of the two systems. The Awarding Body does not hesitate to First, the timelines are very different. In the overturn Peer Review team recommendations case of EQUIS, time to completion of the full that are inconsistent or out of line with the process is between one and two years. The standards of EQUIS. Another point is that AACSB timeline indicates up to five years for there is no provision within the system for the pre-accreditation process with a further arbitration between the teams and the two years in the initial accreditation process Awarding Body. (although few schools spend a full seven years The AACSB system engages schools in the system). in a long, ongoing process in which they This is largely because EQUIS has no are given constant direction with multiple requirements between successful eligibility checkpoints and regular requirements and the submission of the Self-Assessment to submit annual progress reports and Report. AACSB, on the other hand, introduces statistical updates, all under the continued a substantial development phase requiring guidance of their appointed mentor, PRT approval and implementation of an Chair or one of the numerous interlocking Accreditation Plan. The advantage of this, committees that monitor the system. of course, is that most of the substantive EQUIS is a lighter, more rapid process in issues that might lead to non-accreditation which value is added through the rigour have been extensively addressed before the of the assessment against demanding SER is begun. standards. As a matter of policy, EQUIS has Whereas EQUIS leaves it up to schools to established a complete separation between demonstrate that they meet the standards, the assessment function and the consulting AACSB provides a mentoring system to guide support function. schools through the process, ensuring that The development dimension, which is built foreseeable problems are dealt with before into the early stages of the AACSB process, the final assessment. The risk of failure for is found in EQUIS after the accreditation a school that reaches the end of this assisted decision, whether this is positive or negative. process is, therefore, normally reduced. Schools granted three-year accreditation In the case of EQUIS, on the other hand, the must submit annual progress reports. risk of rejection is much higher, both at the Those accredited for five years are required eligibility stage, where decisions have to be to choose three development objectives upon tougher because there is no pre-accreditation which they report after two-and-a-half years. phase to follow, and at the end of the process. Those that fail to achieve accreditation receive A further important difference in the Peer Review process is that EQUIS review teams do not inform the school of their recommendation during the final feedback session whereas this is always done at the

a blueprint for future development in the detailed feedback given to them. Many schools that have failed on the first attempt go on to achieve accreditation in a subsequent application after several years of work.

EQUIS is a lighter, more rapid process in which value is added through the rigour of the assessment against demanding standards

ABOUT THE AUTHOR

Gordon Shenton is Associate Director, Quality Services, EFMD.


THE

25 EFMD Global Focus | Volume 04 | Issue 01 2010

SUSTAINABLE

GISELLE WEYBRECHT

SUSTAINABLEMBA

THE MANAGER’S GUIDE TO GREEN BUSINESS

The Sustainable MBA provides the knowledge and tools to help you “green” your job and organization, to turn sustainability talk into action for the benefit of your bottom line and society as a whole. Based on more than 100 interviews with experts in business, international organizations, NGOs and universities from around the world, this first of its kind guide brings together all the pieces of the business and sustainability puzzle including; • The basics on what sustainability is, why you should be interested, how to get started, and what a sustainable organization looks like. • A wide range of tools, guidelines, techniques and concepts that you can use to implement sustainability practices. • Tools and tips on how to “green” your job, including how to sell these ideas to your team, how to make green choices as a consumer and how to organize green meetings.

• A survey of the exciting trends in sustainable business happening around the world. The Sustainable MBA is organized like a business school course – allowing you easy access to the relevant information you need about sustainability and Accounting, Economics, Entrepreneurship, Ethics, Finance, Marketing, Organizational Behaviour, Operations and Strategy. ISBN 978-0-470-74114-6 • Hardback • 400pp £16.99 / €20.40 / $27.50 / AUS$42.95 / NZ$47.99

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26 www.efmd.org/globalfocus

The education sector, and in particular business schools, provide the real key to sustainability. When we change the way that the next generations of employees, managers, CEOs and leaders think and act then this will lead to broader changes across industries around the world. In addition, the way that an MBA is structured makes it uniquely and ideally placed to train managers and leaders in sustainability issues. For sustainability to be successful within a business, all parts of that business need to be engaged, from the accountants to the HR departments, from the CEO down to the mailroom. Sustainability requires creating a culture where everyone contributes and everyone accepts responsibility for doing her or his part. The problem is that most MBAs, indeed most business training programmes, do not provide a deep understanding of what sustainability is and, more importantly, how graduates can apply sustainability within their jobs and careers.

Giselle Weybrecht argues that business schools have a key role in preparing the next generation of business leaders to make sustainability the norm


Grassroots: The sustainable MBA by Giselle Weybrecht

Instead, sustainability is often taught as an add-on, presented in a way that is not connected to the key messages and frameworks in the mainstream MBA curriculum. The implicit message is that sustainability is only relevant to those managers who have the word “sustainability” on their business cards. General managers do not learn how to translate – and integrate – these ideas into the real world once they go back to work.

DE

120

120 faculty members, our job u “green” y m line o y lp e h to o administration, d tools your bottcareer enefit ofrepresentatives b e th r fo n service and o ti students froml universities ationa and other , internBritain s s across ide e in s u s in b f its kind gu first owere is th , d rl countries interviewed o w ; luding nd the puzzle incfor ility research bfor a the book in ta s u s d n get w ted, ho to s re te in e b ou should n looks like. use to that you can ts p e c n o c es and ideas to to sell these anize green w o h g in d lu to org b, inc er and how as a consum

integrate sustainability into their professional careers gives today’s business students and their school’s alumni base a competitive advantage in today’s marketplace. Business schools must seize this opportunity to ensure their graduates have the very best preparation possible to meet the challenges of the 21st century. If they do not, the best students will go elsewhere.

Incorporating sustainability into the MBA or other business training has not proven easy. Discussions on sustainability – or CSR (corporate social responsibility) – are often met with scepticism and sometimes even rolling eyes. Although some students want it many are not receptive, especially when they feel it is not directly useful to their careers.

When I started my own MBA after working for many years on sustainability issues at the international level at and with the United Nations, students and alumni approached me because of my experiences in this field. They were interested in doing something more with their lives; they wanted to “make a difference” but they also wanted to know about work opportunities and what their interest in sustainability could bring them.

Faculty are often not equipped to teach these issues or in a position to do so. Often the institution itself is not engaged in sustainability. Most recruiters and business partners do not yet require or expect their new employees to have this knowledge.

Because many students did not feel they were receiving enough sustainability teaching, I started a project in my second year to examine why such courses and ideas were not being taught and how they could be better incorporated into the MBA experience.

There are several reasons why business I interviewed faculty members, administration, schools leaders ought to push sustainability. career service representatives and students First, many of them recognise the important from London Business School (where I was role they play in shaping the next generation enrolled) and also other universities in Britain of leaders. Sustainability in its different shapes and other countries. and forms is here to stay and is part of the I then started speaking with representatives new business reality. from international organisations, NGOs and Second, business schools are usually located the business sector as well as sustainability experts and entrepreneurs. within universities, many of which are now exploring how sustainability might be incorporated into their curricula and business schools can be at the forefront of that.

A B M E L B A N AI

LE

27 EFMD Global Focus | Volume 04 | Issue 01 2010

Third, business schools need to stay up to date. Some recruiters are already seeking to recruit leading-edge students with knowledge of sustainability and who possess the critical skills, collaborative abilities, open mindedness, sense of innovation and entrepreneurial spirit that are necessary to bring their companies successfully into the future in a challenging global environment. Being green and understanding how to

Incorporating sustainability into the MBA or other business training has not proven easy. Discussions on sustainability – or CSR – are often met with scepticism and sometimes even rolling eyes


28 www.efmd.org/globalfocus

Over 120 interviews later, I realised that there were many challenges to be met before sustainability could truly be mainstreamed into MBA programmes. It is not going to happen overnight. However, students want and need to get this information now. If we want to see changes in the future, we need to start educating the leaders of tomorrow today. Every year that another class graduates without the appropriate knowledge to bring sustainability tools to their companies is another opportunity missed. This is how my book The Sustainable MBA: The Manager’s Guide to Green Business was born. The book equips individual students and employees with the tools to take sustainability from talk to action, to understand what is happening, sell these ideas to others on their teams and implement them into their job. It is organised like a business school programme, allowing readers easy access to the relevant information they need about sustainability and accounting, economics, entrepreneurship, ethics, finance, marketing, organisational behaviour, operations and strategy. It also provides: –the basics on what sustainability is, why you should be interested, how to get started and what a sustainable organisation looks like – a wide range of tools, guidelines, techniques and concepts that you can use to implement sustainability practices with resources on how to implement them and links for more information – tools and tips on how to bring sustainability concepts into your job (whatever job that may be) including how to sell these ideas to your team, how to make green choices as a consumer and how to organise green meetings – the business case for each tool and idea introduced as well as a presentation of the challenges involved in pursuing different sustainability strategies in order to give managers a “heads up” on what to expect. – a survey of the exciting trends in sustainable business happening around the world

– a wealth of links after the presentation of every tool leading readers to interesting resources for more up-to-date information, statistics and best practices Educating students in sustainability issues is about giving them the tools to understand the issues and teaching them how to use and apply them in different business environments, especially in the traditional business areas that most will be entering. Schools around the world are experimenting with different approaches for introducing the notion of sustainability into their programmes. Here are a few tips:

Be realistic

Do not present sustainability as only being about saving the world or doing good. Prepare students to be able to understand the balance between business and society – that sustainability is about good business

Sustainability should to be taught as it relates to what is currently happening in the business world. Presented in a way that allows students to understand how these ideas can be incorporated into businesses of all sizes


29 EFMD Global Focus | Volume 04 | Issue 01 2010

Grassroots: The sustainable MBA by Giselle Weybrecht

to accounting. Not only will this set a good example with students but it will also create some first-hand experience to build on.

Get engaged in the discussion

There are now a wide variety of international networks of universities and professors exploring these issues including EFMD, PRME, GRLI, Aspen Institute and EABIS to name but a few. Universities also have a lot to learn from more general business and sustainability networks such as WBCSD.

Approach it from different angles

Provide a variety of different ways for students to be engaged in these issues, from student clubs or international student networks such as AIESEC, OIKOS and Net Impact to student projects. Have speakers in from the sustainability area and from general business presenting not just success stories but also challenges and failures. Use case studies, independent projects, lectures, videos, field trips, websites, books and so on.

Offer a range of opportunities

Show students that they can make a difference without necessarily getting a job with the word sustainability or green in their job title. Universities can play a role in helping students to understand that they can have a positive impact in any job they go into.

Remember that faculty members are key and can be about making more money (or not losing money). Many of the lessons relating to sustainability are not even about sustainability itself. They are about teaching students to be open minded, innovative and collaborative.

Make it useful and relevant

Presenting sustainability as a separate concept is not useful to the majority of students, who will not go into a job focused on sustainability. Sustainability should be taught as it relates to what is currently happening in the business world. Present it in a way that allows students to understand how these ideas can be incorporated not just into NGOs and social enterprises but businesses of all sizes.

Faculty members who teach sustainability concepts alongside traditional business concepts send a strong message to students that this is an important business reality. Make sure instructors are aware of these issues and how they relate to their teaching. Provide training, opportunities and guidance for faculty on how they can incorporate sustainability into research and classes. More and more, the real success of a business education programme will be judged by whether it is able to train graduates to think about business and making money in different ways, aligning social and environmental objectives with financial goals.

Practice what you want to teach

A university is a business as well. Look at how sustainability can be incorporated into the daily operations of your institution, from HR

ABOUT THE AUTHOR

Giselle Weybrecht : gweybrecht@thesustainablemba.com www.thesustainablemba.com

Show students that they can make a difference without necessarily getting a job with the word sustainability or green in their job title


30 www.efmd.org/globalfocus

Innovations in information technology and financial imperatives are fuelling the return of workplace learning. Charles Jennings looks at why an age-old practice is so suited to the 21st century

Learning 0n the job Profound changes over the past 20 years have influenced the approaches we are taking to developing workforce capability at both individual and organisational levels. The rise of networks and the ability of individuals to access massive amounts of information on seemingly every subject are presenting both opportunities and challenges for learning within the workplace. While having ubiquitous information and connections at one’s fingertips is a luxury unimagined by our forefathers, it also alters fundamentally the way we learn and perform.

These developments have re-awakened great interest in the age-old approach of learning within the workplace rather than leaving the workplace in order to learn. The difference now, of course, is that 21st century workplace learning is being overlaid and supported by 21st century technologies and 21st century thinking. Workplace learning has been part of the toolkit for building human performance and productivity for centuries. The masterapprentice model and experiential on-the-job learning were the only ways people developed


Learning on the job by Charles Jennings

mastery of their trade or profession until the extension of more formal class-based one-to-many learning systems that originated in Prussia during the 18th century. This Prussian model spread around the world and, until recently, has been the dominant approach to learning in the vast majority of organisations. The French philosopher and sociologist Michael Foucault has referred to the period during which classrooms were established as the modus operandi of education and training as “the great confinement”. In the 55 years from the end of the second world war to the millennium, the classroom model became even more dominant in corporate training. Many of the “corporate universities” that were established in the 1990s were simply extensions of the off-thejob classroom-based learning model.

31 EFMD Global Focus | Volume 04 | Issue 01 2010

Most of us now realise that classroom-bound learning is confining. The vital link between learning and work is broken or at least weakened significantly by moving learning away from the workplace. The challenge of retaining what has been learned in a classroom and applying it effectively is difficult. It is certainly more difficult than if the learning takes place in the context of where it is to be applied. At the same time, the profusion of new communication technologies and applications built upon them has opened up opportunities for workplace learning that simply have not existed previously. Many organisations are now taking steps to break out of the “confinement”. When these changes and opportunities are set against the weakening business climate

The profusion of new communication technologies and applications built upon them has opened up opportunities for workplace learning that simply have not existed previously


32 www.efmd.org/globalfocus

over the past two years there is an even greater imperative to focus more closely on the value that can be delivered from stagnant or declining learning budgets through taking a fresh approach and incorporating workplace learning at the heart of our learning strategies. In fact, it is vital that all organisations, be they institutions of higher learning, government departments or business corporations, now recognise the sea change that is taking place and adjust to it. Doing so is critical for the preparation of students and employees for successful and effective careers in today’s hyper-competitive environment.

Learning maturity and workplace learning

It is worthwhile pondering on learning maturity and its relationship with workplace learning to understand whether we are moving forward by adopting what could be seen as an age-old approach to ensuring someone can do his or her job effectively. Various maturity models have been developed for organisational learning that link learning with work. One of the most straightforward is that originated by technology group IBM. In IBM’s model learning maturity is described in three phases. – an Access Phase, where learning is separate from work – including classrooms and other away-from-work learning “events” that are planned and delivered not by the learner but by Leadership and Development professionals – an Integration Phase, where learning is enabling work – using enterprise-wide learning systems, supporting business performance and with some “blended” learning and increased learner control

Workplace learning sits firmly in the On Demand phase in this model. Much of workplace learning is “pulled” by the learner rather than being pushed and it is carried out on a need-to-know and need-toperform basis rather than when an event is scheduled. In the workplace most learning is “just-in-time” rather than “just-in-case”.

Knowledge work and workplace learning

The rise of knowledge work is one of the most important phenomena to have occurred in the second half of the last century. In a society dominated by highly specialised institutions and organisations, knowledge work – as characterised by non-routine, creative, problem-solving, innovative and change-oriented activities – has become the norm rather than the exception. We find these knowledge workers everywhere in our society – as managers and executives in commercial business and social enterprises, as civil servants, politicians, as entrepreneurs, as consultants, as doctors, as accountants, financial analysts and stockbrokers. In developed countries these knowledge workers are approaching 40 % of the population and in emerging economies they form a new “middle-class”. The explosion of knowledge work and the increasingly dynamic world of the workplace have together created challenges that cannot be addressed through the provision of structured off-the-job learning solutions alone. There are significant challenges in this new world of work that require a range of different approaches.

“Time to competence” is one major challenge facing organisations that employ knowledge workers. In an environment where information – an On Demand Phase, where learning and knowledge are exploding and where the is embedded in work – where learning is part of the work and “learning is the work” half-life value of both is decreasing, the need

In an environment where information and knowledge are exploding and where the half-life value of both is decreasing, the need to keep abreast of change and continually to refresh understanding is paramount


33 EFMD Global Focus | Volume 04 | Issue 01 2010

Learning on the job by Charles Jennings

40% In developed countries knowledge workers are approaching 40 % of the population and in emerging economies they form a new “middle-class” to keep abreast of change and continually to refresh understanding is paramount.

EFMD is actively addressing the issue of workplace learning and extending learning beyond the classroom as part of its Excellence in Corporate Learning strategy

Knowledge workers need to develop and enhance their “knowledge capital” on an on-going bases during their daily working lives. To do this, they need to adopt a continuous learning approach that includes learning from the experiences they have during their working day, learning through practice and learning from others they work and interact with through conversation, discussion and problem analysis. Although time-bounded learning events may help, in no way can they fully support these needs. The use of effective workplace learning approaches is not a desirable but an essential in 21st century knowledge work. An additional dimension in the general “speed to competence” issue faced through working in a dynamic workplace is that many organisations struggle with the challenge of ensuring that their most talented employees are provided with support for their ongoing development and career progression. In the more robust financial climates of ten or 20 years ago most of the talent development was through off-the-job events and experiences that were provided in conjunction with leading education providers and business schools.

ABOUT THE AUTHOR

Charles Jennings is Director of Duntroon Associates, a UK-based Strategic Learning and Performance consultancy. From 2002 until the end of 2008 he was the Chief Learning Officer for Reuters and Thomson Reuters

In today’s whirlwind working world and financially constrained environments many organisations are looking to support talent development within the workplace, whether through workplace coaching and mentoring or through facilitating the use of employee social networks and “learning through others”. Both of these approaches can be integrated into overall workplace learning strategies.

The EFMD and workplace learning

The EFMD is actively addressing the issue of workplace learning and extending learning beyond the classroom as part of its Excellence in Corporate Learning strategy. A Workplace Learning Group has been established as the first of a number of planned special interest groups to support members in developing their learning provision. Initial membership of the workplace learning group includes the BBC, Allianz, Coca Cola, Eli Lilly, Ergo, GSK, Holcim, L’Oreal, Novo Nordisk, Toyota and MAN. The group had its first peer workshop event in October 2009 and is actively identifying the key levers, tools, guidelines, frameworks, good practice and solutions that can help build sustainable employee capability beyond the confines of formal training and development courses and programmes. Pilots and case studies of new approaches to workplace learning are also being developed. One key area of focus for this year-long collaboration is the use of new informal workplace learning methods and technologies emerging from Web 2.0 developments such as social software and performance support solutions. The group is also focusing on issues such as the engagement of experts as originators of learning content, closer alignment with line managers to develop informal coaching and mentoring, building best practice through distributed working groups, technologybased delivery and consumption of learning content, and other related areas. EFMD is working on the launch of further special interest groups including Executive Development Centres and Community-Driven Action Learning.


34 www.efmd.org/globalfocus

David Gosset examines the extraordinary way in which China and the Chinese people have rapidly become global citizens

At the end of the 18th century, Lord Macartney, the ambassador to China of Britain’s King George III, had been instructed to request permission for Britain to send a representative to the imperial court and to create the conditions for the expansion of trade between the Qing dynasty and Britain. The written answer of the Chinese emperor Qianlong, who reigned over the empire for 59 years (the People’s Republic was 60 years old in 2009) is, in a sense, a gem: “Why then should foreign nations advance this utterly unreasonable request to be represented at my court? If you assert that your reverence for Our Celestial dynasty fills you with a desire to acquire our civilisation, our ceremonies and code of laws differ so completely from your own that, even if your envoy were able to acquire the rudiments of our civilisation, you could not possibly transplant our manners and customs to your alien soil...I have but one aim in view, namely, to maintain a perfect governance and to fulfil the duties of the state: strange and costly objects do not interest me.”

After centuries of complacent sinocentrism behind the Great Wall and secretive imperial politics within the Forbidden City, China is still often perceived as self centred, its mandarins as being aloof and self satisfied. Such a persistent representation misses some fundamental features of 21st century China: an unprecedented level of opening-up and transparency, a thirst for a better understanding of the foreign world and a desire not only to modernise a huge and ancient country but also to become a source of modernity. Consequently, the traditional Chinese separation between the outside, or the foreign, (wai), and the inside, or “us”, (nei), has been considerably reduced. Some elements of Chinese society might feel uneasy about this change but China’s opening up to the world does not equate to the loss of the Chinese identity; it is about the transformation of the idea of “Chineseness” and the revival of Chinese civilisation. The common and vivid Chinese locution jing


The last frog in the well by David Gossett

35 EFMD Global Focus | Volume 04 | Issue 01 2010

93% Research showed that 93% of Chinese had a good opinion of international trade

di zhi wa – the frog at the bottom of the well – is used to deride a mix of parochialism, narrow mindedness and complacency. In an increasingly interconnected and interdependent global village, the expression does not apply to China. In a 2009 survey conducted by the Pew Research Center, based in Washington DC, it appears that 93% of Chinese respondents had a good opinion of international trade. The same institute estimates that 88% of the Chinese believe that their country’s economic situation is good (17% for America, 14% for France and 10% for Japan). In the Chinese collective psyche, openingup, progress and confidence reinforce each other. The conjunction of these characteristics partly explains why the visitor to Beijing, Shanghai or Chongqing is often astonished by the energy that circulates there and, indeed, in most Chinese megalopolis. In 2009, Pew enquired about the level of satisfaction in 25 nations. Its study shows that 87% of Chinese are satisfied with the

way things are going in their country (36% for America, 27% for France and 25% for Japan). Any reflection on China’s political system, economy, business or diplomacy has to integrate this high level of confidence, which is in sharp contrast with the general apprehension that dominates in Western countries. China’s top leadership adopts a constructive global perspective. In 2009, at the 64th session of the United Nations General Assembly, China’s President Hu Jintao made three highly significant speeches that indicate that Beijing not only looks at itself as an integrated member of the world community but also as a coarchitect of the 21st-century world order. At the UN climate change summit, the title of Hu’s address was explicit: “Working together


36 www.efmd.org/globalfocus

338

Robert Sirota Conductor and president, Manhattan School of Music

I honestly think that in some real sense the future of classical music depends on developments in China in the next 20 years

As of June 2009, with 338 million Internet users, China ranks first in the world for the number of “netizens”. By comparison, India has only 81 million “internauts”

to meet the challenges of climate change”. In addition, the main theme of Hu’s address at the UN Security Council summit on nuclear non-proliferation and disarmament was the necessity to “work together to build a world with universal security”. Finally, at the UN General Assembly, Hu concluded his speech by a reference to the ideal of cosmopolitanism: “We are called upon by our times to unite as one and work together for mutual benefit and win-win progress like passengers in the same boat," he said. Even at Beijing’s Tiananmen Square celebrating the 60th anniversary of the People’s Republic of China – a ceremony targeted above all at a domestic audience – Hu mentioned his vision of a “harmonious world”, “world peace” and China’s contributions to mankind. The Chinese president is in harmony with Chinese society.

The world community, which hitherto was mainly an exclusive Western club, has now 1.3 billion new active constituents open to the idea of a global order but who expect to be adequately represented in its regulatory or political bodies and equitably depicted in its mainstream media. One can certainly find China’s new global citizens in the following segments of Chinese society, which also give an idea of the magnitude of China’s opening to the world. Around 300 million Chinese study or speak English. Events such as the Beijing Summer Olympic Games last year or the Shanghai World Expo in 2010 stimulate the desire to learn the language of international exchange. China’s largest English school organisation, New Oriental, is traded on the New York Stock Exchange. The unorthodox Li Yang, who created and the heads the language school Crazy English, is a national celebrity.

Selling more than three million copies, Reference News (Cankao xiaoxi) is the newspaper with the largest circulation in As Zhao Qizheng, the chairman of the Foreign the People’s Republic. Reference News’ loyal Affairs Committee of the Chinese People’s readers appreciate the fact that its content Political Consultative Conference (CPPCC), is mainly made up of translated articles noted in a recent article, Chinese citizens that have already been published around have been transformed into “global citizens”. the world. More generally, from July 2008 to The effects of this evolution are considerable. June 2009 translated books accounted for


The last frog in the well by David Gossett

20% of China’s overall book market by title output and 30% of sales. As of June 2009, with 338 million Internet users, China ranks first in the world for the number of “netizens”. By comparison, India has only 81 million “internauts”. While the number of foreign students in China reached a record high of 223,499 in 2008, the number of Chinese studying abroad expanded to 200,000 in 2009. Since Deng Xiaoping’s opening up policy in 1978, almost 1.5 million Chinese have chosen to study abroad. In 2007, about 37 million Chinese travelled overseas. The World Tourism Organisation predicts that 100 million Chinese tourists will travel abroad every year by 2020.

37 EFMD Global Focus | Volume 04 | Issue 01 2010

Delfin Colome was right to argue in a thoughtful essay that “the future of classical music depends on Asia”. And Robert Sirota, the distinguished American conductor and president of the Manhattan School of Music, is more specific, “I honestly think that in some real sense the future of classical music depends on developments in China in the next 20 years.". The Chinese people’s intense interest in the world does not mean that they forget or reject their own traditions. On the contrary, for most Chinese intellectuals or Chinese global citizens the opening up to foreign cultures is an invitation to the reinterpretation of China’s traditions.

In fact, China’s curiosity about the outside world is concomitant with a return to the If more than 600,000 Chinese engineers graduate every year from institutions of higher Chinese tradition and a reflection on the idea of “Chineseness”. education, one should also be aware that around 30 million Chinese are now learning to Can the West open itself to a Chinese play the piano and 10 million the violin. Tests renaissance as China opens itself to the to enter the top Chinese conservatories world? If the West believes that it has nothing attract nearly 200,000 students a year. to learn from China, from its ancient wisdom, aesthetics, values; if the West, facing the The Ukrainian virtuoso Isaac Stern, portrayed overall success of the Chinese model, refuses in the 1980 documentary From Mao to Mozart, to question its own assumptions about anticipated China’s massive opening up to economic and political modernity, it simply the beauties of Western classical music. takes the risk of ending up as the last frog in the well. The late Spanish diplomat and composer

ABOUT THE AUTHOR

David Gosset is director of the Euro-China Center for International and Business Relations at the China Europe International Business School (CEIBS) in Shanghai and founder of the Euro-China Forum.


38 www.efmd.org/globalfocus

Growing competition and changing markets have forced business schools to re-evaluate their strategies often borrowing techniques from the business world. But, asks Emerson de Almeida, can they do this and still remain academic institutions?


The business of education by Emerson de Almeida

80% One hundred years ago a group of Swedish entrepreneurs created the Stockholm School of Economics to help the development of companies in the country

Competition in the education industry, particularly in the management education industry, has increased significantly in recent years. The reasons for such an increase are linked to factors such as the need to: a) increase the revenue base to replace decreasing public funding b) enhance their image and improve their rankings c) respond to market demands for better-prepared professionals d) deal with management education offerings by new entrants who have been attracted by low barriers to entry. As schools came to experience classic business issues, practices that are common to the corporate world began to be incorporated into their daily routines. Mergers, acquisitions, alliances and spinoffs may be among the most visible of these practices. They have ranged from the simple (but not easy operationally) co-operation agreements between a business school and another school from the same university to one institution taking over another. Such a competitive scenario has forced schools – and particularly their deans – to analyse and choose competitive strategies that are new to the academic world. These strategies include new teaching and learning tools as well as differentiated and innovative content for programmes and courses.

The practice of looking to the corporate market to recruit business school leaders is becoming prevalent – many institutions are already led by executives or by professors whose careers began at companies

Harvard Business School has begun to collaborate with the Medical School from Harvard University to offer a set of programmes, among them an MBA in healthcare. In Europe, the Judge Business School (University of Cambridge) has joined other units within the university to organise a programme on sustainability it could not offer itself due to its lacking specialised professors. In Australia, the University of New South Wales, after trying to merge its business school (Australian Graduate School of Management – AGSM) with its counterpart at the University of Sydney, decided to carry out a merger within its own organisation. It brought together AGSM, an institution with about 40 faculty dedicated to the MBA and executive programmes, and the Faculty of Commerce and Economics, which is

39 EFMD Global Focus | Volume 04 | Issue 01 2010

focused on undergraduate courses and has approximately 200 faculty. With these consolidated financial, physical and academic resources, the university feels better prepared to compete with the other two important executive education suppliers in Australia, the Macquarie School of Management and Melbourne Business School/Mt Eliza (this also the result of a recent merger). One aspect of this process deserves highlighting. It was encouraged by the university's new president, Fred Hilmer, a former CEO of a large media company. Indeed, the practice of looking to the corporate market to recruit business school leaders is becoming prevalent. A large number of institutions are already led by executives or by professors whose careers began at companies. They include some elite schools such as Babson, INSEAD, Stanford, Western Ontario and Wharton. In Europe, too, mergers and acquisitions have become more common. In Britain, Henley Management College merged with the business school of the nearby University of Reading. The explicit objective was to position itself among the ten best schools in the world. Its director, Christopher Bones, is also a former business executive. In Spain Instituto de Empresa (IE), a business school that has been moving up the global rankings, bought a university in Segovia, 40 minutes away by train from its Madrid base. The aim is to create a global university with 80% of its students and faculty coming from other countries and which would be able to reinforce IE’s global positioning. Setting up alliances is a movement that schools have copied from companies and the most significant of them may be the one between Wharton and INSEAD. It allows INSEAD and Wharton to exchange MBA students, while both faculties can carry out joint research and case study development as well as other activities.


40 www.efmd.org/globalfocus

One hundred years ago a group of Swedish entrepreneurs created the Stockholm School of Economics to help the development of companies in the country. Other entrepreneurs and companies took similar initiatives. In 1916 the president of the Chase Manhattan Bank founded Columbia Business School; in 1946 ALCAN created IMI and in 1957 NESTLÉ created IMEDE (two schools now merged as IMD). Now, in the first decade of the 21st century, their counterparts in various countries are repeating their actions and creating a new generation of schools mainly in emerging markets. Table 1 summarises this process. These entrepreneurs’ motivation is similar to that of their predecessors. They want to create alternatives in their own countries for young people who seek to take an MBA in America or European countries but who often end up not returning to their native land. They worry about losing talents that would certainly be able to contributeto company development in their own countries. The fact that entrepreneurs who helped create schools in one country did not know of similar initiatives in others suggests that this is a trend and not an isolated movement and that it needs to be better understood. Another significant trend has been the movement towards internationalisation. (See also the article on page 56.) Although there are exceptions, it is present in the strategy of almost all business schools. Undoubtedly, the race to internationalise is driven by economic globalisation. Companies wish to be where their customers are. The rankings and the accreditation process of the two main accrediting bodies (EFMD and AACSB) also encourage the process since they include internationalisation as an element of their assessment. (See article page 20) However, there are exceptions, mainly at some smaller American schools whose strategy has been to look to local needs and protect themselves within small market niches.

TABLE 1

Date

Country

Institution

2001

India

Indian School of Business Raja Gupta, former McKinsey chairman, and Indian entrepreneurs supported by Kellogg, Wharton and LBS

2002

Germany European School of Management and Technology – ESMT

25 companies created a ¤100 million endowment for the school

2002

China Cheung Kong Graduate School of Business

Li Ka-shing, a Hong Kong b illionaire offered facilities and financial resources

2007

Russia Skolkovo – Moscow School of Management

Ruben Vardanian, from the Troika Dialog Group, and Russian entrepreneurs created an initial US$80-million fund to launch the school

education and include corporate universities that, although they do not belong to the school category, deal in the education industry by offering courses whose classes are taught by university professors and professionals from the company itself. These programmes emphasise products that will have objective and measurable impact on the organisation. Table 2 (overleaf) presents the positioning of some of these institutions. The schools in the table can also be grouped into two kinds of institutions: those that predominantly dedicate themselves to undergraduate/postgraduate courses (degree programmes) and those whose main focus is on executive development (non-degree programmes). More precisely, the influence of the full-time MBAis the watershed between one and the other.

There are more than 7,500 business schools in over 40 countries according to a 2006 estimate by the Global Foundation for Management Education.

Degree programmes give students a ollege degree (or diploma) while non-degree programmes give them a participation certificate (though there is a trend towards attributing credit to these latter programmes to allow progress towards a formal diploma).

They range from internal units at universities dedicated to undergraduate courses to independent schools that focus on executive

The former are aimed at individual students (usually young, ranging from 20 to 30 years old). The latter are aimed at organisational

Founders

Business schools have surrendered to a certain market fundamentalism and they have thus developed executives whose mission was almost only to maximise shareholder value


The business of education by Emerson de Almeida

41 EFMD Global Focus | Volume 04 | Issue 01 2010

7,500 A GFME survey in 2006 revealed 7,500 business schools in over 40 countries

life or at the organisation itself. What are sought are skills and attitudes that will lead to measurable results. Participants are professionals over 30 years of age (most are between 40 and 50 years old) who are interested in acquiring knowledge to help design strategies for their organisations. The MBA is the best-known brand for the first group. The others have two versions: open-enrolment programmes and customised programmes that can be specifically prepared for a given company, which together we call executive education. What the table shows is the predominance of schools whose core focus is on the MBA and which only complementarily offer executive education programmes. For schools centred on the MBA the complementary role played by executive programmes contrasts with their growing importance from a financial point of view. At a good number of American schools, for example, their revenues range between 30% and 70% of the total income from programme enrolment including the MBA. At a midsized school like Darden, it is close to 40%, and at a large one such as Harvard it is closer to 55%. Only a few schools dedicate themselves

predominantly to executive education while also offering an MBA. At these schools, the offer of open and customised programs is significantly higher than for the MBA. It can reach up to around 80%, both in terms of revenues and numbers of participants. This type of institution is easier to find in Europe than in America – for example IMD (Switzerland), Ashridge Business School (England), EGP – University of Porto Business School (Portugal) and the Center for Creative Leadership (CCL) in America (though it does not offer an MBA). A significant share of the activities carried out for companies by this type of institution is performed "on demand". Their professors are a blend of professional professors (with doctoral degrees) and professionals who are professors (executives with academic characteristics). At Ashridge, they are split into two groups: academic faculty and consulting faculty, a practice that is beginning to appear at other institutions that have been created more recently, such as ESMT in Berlin, Germany. Although their field of action is relatively limited, the particularities regarding their

For schools centred on the MBA the complementary role played by executive programmes contrasts with their growing importance from a financial point of view


42 www.efmd.org/globalfocus

TABLE 2

Classification and placement of some schools visited PREDOMINANT: MBA (DEGREE PROGRAMME)

PREDOMINANT: EXECUTIVE EDUCATION (NON-DEGREE PROGRAMME)

JUDGE (CAMBRIDGE) SAID (OXFORD) SAUDER (UBC)

COLUMBIA HARVARD KELLOGG

THEORY-BASED TEACHING AIMED AT INDIVIDUALS (Intellectual Platform)

ESMT

HEC

IMD

INSEAD

ASHRIDGE

BABSON

CCL

faculty suggest this kind of school is closer to consulting firms and to corporate universities, thus creating a common space for the interests of these three kinds of organisations. For example, there has been increasing competition between these schools and consulting firms to provide in-company programmes. One fact that stands out is that the strategy of the two types of school identified is not static. Migration can be seen between schools where the MBA dominates and those that lean more towards Executive Education. Almost as soon as the current international financial crisis began, accusations began to pop up stating that the organisations that were responsible for the crisis were led by people who had MBA degrees. Business schools were criticised for not knowing how to develop people who could build healthy companies, let alone a sustainable society. Some argue that business schools have surrendered to a certain market fundamentalism and they have thus developed executives whose mission was almost only to maximise shareholder value. The logic of shareholder primacy had freed them from any other responsibility except for that of achieving financial results. Academics were equally quick to suggest ways business schools could be reinvigorated. Professor Rakesh Khurana from Harvard, for example, defends the idea that schools must become professional institutions with

AMI

EGP (PORTO)

DARDEN

UNIVERSITY SCHOOLS UNIVERSITY SCHOOLS EMPHASISING EMPHASISING UNDERGRADUATE THE MBA COURSES

DUKE CE

INDEPENDENT SCHOOLS EMPHASISING THE MBA

INDEPENDENT SCHOOLS EMPHASISING EXECUTIVE EDUCATION

PROFESSIONAL ORGANISATIONS

CORPORATE UNIVERSITIES

APPLIED TEACHING, IMPACT ON ORGANISATIONS (Organisational Intervention)

a code of conduct and an ideology about their role in society – similar to medical and law schools. My impression is that most people were absorbed by the need to compete for a place in the sun while struggling for financial resources, rankings, accreditations and, almost obsessively, faculty. Such needs will still be there. What absolutely matters is a certain balance. Business school leaders will have to dedicate themselves more to their schools’ main mission – educating better people for a better world. This means reinforcing what some already do, renewing the curricula of their programmes and introducing topics that deal with responsible sustainability, social inclusion, business ethics, and individual and cultural values. Maybe then business schools will be able to reinforce their “school” mission without losing their “business” side.

As the current international financial crisis began, accusations began to pop up stating that the organisations that were responsible for the crisis were led by people who had MBA degrees

FURTHER INFORMATION

These and other topics will be the object of reflections during the EFMD-FDC Conference “Strategic Movements in Business Education” that will take place in Brazil from August 15th to 17th, 2010. The website will have further details: www.fdc.org.br/efmdconference ABOUT THE AUTHOR

Emerson de Almeida is the Founder and Dean of Fundação Dom Cabral, a leading Brazilian business school founded in 1976. This article is a personal reflection based on his visits to some of the world’s top business schools.


43 EFMD Global Focus | Volume 04 | Issue 01 2010

The Business in Society Gateway Europe’s most comprehensive online resource centre for corporate responsibility and management development

directory

resources

spotlight

events

about

contact

As part of the ongoing strategic alliance between EFMD & EABIS, both organisations are delighted to announce the launch of the Business in Society Gateway web site. The Gateway is a world-leading online resource centre on the integration of business in society issues into mainstream education and research. Featuring a unique, state-of-the-art Directory profiling business school innovation and leadership around the world, it aims to become the key reference point for any stakeholder interested in these subjects.

www.businessinsociety.eu


44 www.efmd.org/globalfocus

As we enter the second decade of the 21st century it might be useful to stop and reflect on the implications of the financial crisis for business school leaders. In particular, to contemplate what deans do now and what they might do in future. Dean watchers have commented on deans’ Janus-like qualities. Typically, the business school dean is seen as a mediator between the school and its central university, occupying a position in the middle. Others have highlighted business school deans’ significant contributions to creating forms of intellectual, social and reputational capital. While taking stock of the dean’s domain in British business schools, we considered the following questions in a sample of 23 interviews. These questions were prompted by a 25% turnover of UK deans during 2008 and the appointment of 21 new/acting deans out of 117 (18%) from Association of Business Schools (ABS) business school members in 2009.

What do deans do? Julie Davies and Howard Thomas report on a survey of British business school deans by the Association of Business Schools


45 EFMD Global Focus | Volume 04 | Issue 01 2010

What do deans do? byJulie Davies and Howard Thomas

Why become a dean?

What does the job demand?

In the course of the interviews a dean’s career It seems from the interviews that effective narrative often included some of the following deans are expected to resolve conflict, elements: defend their school and act politically and diplomatically on a wide range of issues. Deans “I never planned to be the dean. I was head may have a particular mandate on which to of department but seeing the deanship done act, such as restructuring after strategic drift, badly spurred me on. My predecessor exited creation of a research culture, dealing with rapidly. I was acting dean for a while and a financial deficit or fundraising for a new enjoyed it. At some point you make a conscious building. They are appointed to harness others’ decision to opt for a management rather than talents and ensure things get done. a research career track. I can articulate a strategic vision and get along with a range of A compelling business school narrative is valued, so too the ability to work positively people without being arrogant. I walk around a lot; it’s very rewarding. I like the challenge.” with senior university officers, especially the finance director. Interestingly, many of the individuals interviewed were working in their third Deans warned against wasting time on business school as a faculty member and routine committees and emails. They in their first role as dean. Several felt that advocated careful use of diaries, dealing with experiences in different universities, countries issues face-to-face and being selective about and sectors, including consultancy, were which meetings they attended. Team and helpful preparation. They wanted to “make a institution building are key skills. Often they difference”, perhaps not fitting an academic face dilemmas between spending time and mould neatly, moving between the different energy on operations or strategy, internal or worlds of academia, policy and professional external activities, investment in teaching practice. innovation or in research. Common irritants and frustrations include central university taxation levels, high staff/student ratios and the UK’s points-based immigration system.

23 23 interviews were conducted while taking stock of the dean's domain in British business schools

Deans warned against wasting time on routine committees and emails. They advocated careful use of diaries, dealing with issues face-to-face and being selective about which meetings they attended

25%

21

During 2008 there was a 25% 21 new/acting deans were turnover of British deans appointed out of 117 (18%) from Association of Business Schools (ABS) business school members in 2009


46 www.efmd.org/globalfocus

11.6% Britian currently has 11.6% of the world’s share of overseas students

Several deans said they feel privileged – “there are interesting challenges, being able to demonstrate growth, surpluses, getting extra resources, keeping the show on the road; it’s all very rewarding.” On the other hand, if a dean does not have a deputy dean (and very few do), research assistant or carve out time ruthlessly, personal scholarship may decline. “You kind of stop being able to find the time to write papers, you stop reading as much as you used to, the job soaks up huge amounts of time.”

How long are deans in the job?

No British dean has headed their current business school for longer than a decade though Cardiff Business School had one dean for 28 years. Indeed, the average tenure is now 4.2 years for business school deans and 6.8 years for heads of universities.

In a 2007 AACSB International survey of all its members (American and non American), the average time in the dean’s current position was five years, with the median around three years. London Business School has had five deans in 11 years (1998-2009). Very few While the business school dean’s job may individuals are like Professor Stephen Watson appear all-consuming, outside interests and (formerly Director of Judge Business School, the ability to “switch off” were regarded as Dean of Lancaster University Management vital for the individual’s sanity. School and Principal of Henley Management College) and do the job three times in an appointed executive role; a handful of people are deans twice.

The dean’s role is considered a rewarding one – interesting challenges, being able to demonstrate growth, surpluses, getting extra resources, keeping the show on the road

The Canadian-born Professor Sir George Bain was elected Chairman of the School of Industrial and Business Studies, Warwick University (now Warwick Business School) for 1983-9 and Principal of London Business School for 1989-97. Uniquely he is the only former head of a business school ever to lead a research-intensive university – Queen’s University, Belfast. Professors Chris Greensted (now an Associate Director of Quality Services at EFMD), Charles Harvey, Andrew Lock and Martin Timbrell headed business schools in both what we call the “old” and the “new” university sectors. Only the vice-chancellors (heads) of the Universities of Derby, Middlesex and Teesside (all “new” universities) were previously business school deans. A former registrar suggested this might be because in older universities management research is less well understood than other social science disciplines such as economics.

4.2 The average tenure is now 4.2 years for business school deans and 6.8 years for heads of universities


47 EFMD Global Focus | Volume 04 | Issue 01 2010

What do deans do? byJulie Davies and Howard Thomas

It goes without saying that the confidence of the school faculty and the head of the university in the dean is vital Life after deanship

Many institutions appoint executive deans in business schools on five-year fixed-term renewable contracts. A few operate a system of internal appointment for four years by the vice-chancellor (Queen Mary, University of London) or rotation (Ulster). Over the past decade in Britain most deanships have been advertised.

How is the job changing?

So, what are the prospects for business school leaders from 2010? Matt Symonds commented in 2008 in Forbes.com “there was a time when becoming the dean of a major business school was like winning the lottery. It meant a comfortable gig with good pay, prestige, the opportunity to mix with the great and good of business, politics and academia and, perhaps best of all, the kind of job Deans depart early for a number of reasons, security enjoyed now only by popes. In today's for example as a result of a merger, credit crunch world, however, things are disappointing results in the research very different.” assessment exercise, an uncomplimentary strategic review of the school, lack of dean/ Nowadays, success as a dean is increasingly school fit sometimes affecting appointees from linked to financial performance. However, no current business school dean in Britain industry who failed to appreciate academic cultures. Scholars who lack visibility or will have dealt until recently with such an those with a learning and teaching focus who economic downturn; most will have focused have not realised they need to stop doing their on growth not drastic cuts. former job may also have very short tenures. Some commentators predict a shakeout in Critically, a new vice-chancellor may change the sector, if, for example, undergraduate the organisation’s strategy and require a tuition fees are raised significantly. Students new type of dean. It goes without saying that may be attracted mainly to schools that the confidence of the school faculty and the offer high-quality teaching, reputation and head of the university in the dean is vital. guaranteed employability, which may mean loss-making business schools will close. Several deans, of course, sometimes retire to continue as panel members on accreditation Clearly, deanship is becoming increasingly visits, others return to the professoriate to complex with the creation in Britain of “super resume research, teaching and consultancy. deans” who are responsible for ever-larger A few deans move laterally to another units and cross-university matters. business school, others step up to deputy or Almost one in seven of all students in Britain pro vice-chancellorship or even to head an is now studying business and management Oxbridge college. Possibly one dean each year and there has been a 41% increase in becomes a dean in another country and one business and management postgraduate non-European arrives to head a school in research students over the last 12 years. Britain, for example Professor Frank Horwitz Britian currently has 11.6% of the world’s at Cranfield. Professor Bain recommended share of overseas students. Nevertheless, stepping down before the second term of if the prognosis in Europe is for low growth, deanship elapses – “leave them wanting more.” low funding and a jobless recovery in a leaner and low-carbon economy, we hope that deans’ contributions will result in more socially responsible, entrepreneurial, excellently managed and responsive business schools.

1:7 Almost one in seven of all students in Britain is now studying business and management

ABOUT THE AUTHORS JULIE DAVIES

Julie Davies is Head of Research and Executive Development at the Association of Business Schools in London. She is also co-ordinator of the ABS/EFMD International Deans’ Programme. HOWARD THOMAS

Howard Thomas will take up the post of Distinguished Professor of Strategic Management and Dean of the Lee Kong Chian School of Business, Singapore Management University, from February 2010. He was previously Dean of Warwick Business School in Britain and Dean of the College of Commerce and Business Administration at the University of Illinois at UrbanaChampaign in America.


48 www.efmd.org/globalfocus

Frank Jan de Graaf argues that the dominance of neoclassical economic thinking in academia has contributed to the economic crisis

Economics, scientific doubt & history. Alan Greenspan former chairman of the American Federal Reserve

I have made the error to expect that the self-interest of organisations, especially banks and others, was the best way to protect shareholders, capital and business...


Economics, scientific doubt and history by Frank Jan de Graaf

49 EFMD Global Focus | Volume 04 | Issue 01 2010

The most impressive mea culpa of the past year was undoubtedly given by Alan Greenspan, former chairman of the American Federal Reserve, or central bank.In a hearing before Congress on the credit crisis, he stated: “I have made the error to expect that the self-interest of organisations, especially banks and others, was the best way to protect shareholders, capital and business...� In reply, the chairman of the committee asked if he felt that his view of the world, his ideology, was inappropriate and had failed. Mr Greenspan agreed. With his apology Mr Greenspan recognised the failure of the neoclassical approach to economics, which assumes that the rational, selfish behaviour of people in free markets ultimately leads to the highest social usefulness. It must have been a shock to the economics of the past few decades. Subjects such as public finance, corporate finance, banking theory, risk management and management accounting are all largely based on the neoclassical approach. Most recent appointed professors have started their work with ideas based on a neoclassical fundament and its methodological preferences. Neoclassical economic thinking is not bad in itself. It has brought much good, even. In the 1980s politicians such as Margaret Thatcher in Britain and Ronald Reagan in America got their economies back on track based on neoclassical theories. At the time economic thinking in many Western European countries was still dominated by Marxist and socialist thinking. Despite the current criticism, radical policies proved to be a blessing in the long term. But now the downside of neoclassical theory has occurred. Failing financial markets have plunged the global economy into crisis. It is, therefore, high time for a debate on economic concepts as taught in universities and business schools. Are students really trained to think critically about economic theory and the consequences when economic theories are put into practice? Such a debate must focus on the sustainability of four assumptions behind current economic science. In recent years, students have learned that the economy is made up of (1) rational individuals seeking (2) maximum satisfaction who are (3) fully informed in a (4) market that strives for equilibrium. This has led to a generation of economists who believe in market forces but who can only build models and are mostly adding nuances to an existing economic theory. In the last ten years, Nobel Prizes have been given to economists who have modified assumptions on market equilibrium,


50 www.efmd.org/globalfocus

rational action, optimal satisfaction of needs and comprehensive information. The one-sidedness of academia has major implications for the real world. The neoclassical theory has been copied by investors, bankers, risk managers and regulators such as Mr Greenspan without any nuance. Many investors really believe that market-driven selfishness is a good thing and that performance can be measured objectively. The exaggeration of scientific models was directly introduced into the real world. This led to a crooked view of reality among banks, insurers, pension funds and advisors. The implications for the financial markets were unhealthy. Among investors, portfolio theory is all powerful. This led to most pension funds investing their money blindly, trusting on indices. For example, the Norwegian Petroleum Fund has, because of this approach, more than 5,000 companies in its portfolio. And due to this index-based approach, shareholders are unable to monitor individual organisations effectively. Moreover, index investing starts from the idea that the shareholders in a company are fully aware of what happens. We now know the reverse side of this technical approach. Because investors did not want to know where they invested, charlatans and swindlers had an easy life. Another unhealthy attitude is the near exclusive focus on financial data. We have seen that ratings or approved financial statements really say very little about reality. To get clear insight into risks, we have to look at all aspects of an organisation. In their classes academics have not warned students sufficiently about the weaknesses of their knowledge and methods. Building models is an economist’s strong and weak point. By definition models are based on limited assumptions including psychology, historical developments, human failure and group ideology. Current economists’ methodological blindness is inconsistent with academic tradition, which states that any theory is only as good as its own assumptions. A good economist knows the weaknesses of his theory and methodology and is prepared to debate them. Frits Bolkestein, former European Union Commissioner of Competition, states in his book The Two Lights of the Statesman that policymakers and politicians decide best when their decisions are based on logic and historical insight. The tragedy of current economic science is that it only allows itself to be enlightened by logic. Economic models have great logical elegance but lack the other, historical, light. Historical knowledge and historical methods are almost extinct. The best fruit of historical knowledge is humility. Historians, like no one else, are aware of the difficulty of truly understanding and determining facts even when they have already happened.

5,000 Most pension funds invested their money blindly, trusting on indices. For example, the Norwegian Petroleum Fund has, because of this approach, more than 5,000 companies in its portfolio


Economics, scientific doubt and history by Frank Jan de Graaf

51 EFMD Global Focus | Volume 04 | Issue 01 2010

History has shown that the apparently obvious solutions in a crisis may not necessarily be the best

History has also shown that the apparently obvious solutions in a crisis may not necessarily be the best. In the 1930s Depression governments saved money because that was what they were accustomed to do in times of crisis. In today’s crisis money is being spent whereas savings may be the only way out of it. However, widening their orderly world of clear assumptions and models to include different disciplines makes economists uneasy. But it is incorrect to assume that economic knowledge is applied correctly if academic economists simply stick to strict methodological rules. Even more striking, because economic models are independent of reality, there is room for abuse of scientific knowledge and methods. When the credit crisis first broke out, I raised some questions about a company with huge debts that now had its cash “securitised”. A respected colleague waved my doubt away – the market would normalise and the company would benefit for many years to come from this financial innovation. My common sense struggled with this. A company full of debt would by securitisation of its cash flows be able to get money for a better price? Why did I not say during this incident that we were all wrong? As people, we are forced to move with the masses because we fear for our social position. Three changes are needed in faculties of business and economics. First, the critical and independent evolution of the mind must again be central. Each dean has to reconsider if this is happening in his or her department and he or she must ensure that a department is not used to promote a new world order, whether it is neoclassical or Marxist. Economic development requires academic discussion and debate. One theory and method should never have any dominion. FURTHER INFORMATION

A Dutch version of this article first appeared in Het Financieele Dagblad, the main financial paper in the Netherlands, 5 September 2009 . The author would like to thank Harry Pieter de Graaf and Sean Kidney for their comments. ABOUT THE AUTHOR

Dr Frank Jan de Graaf is Professor of International Business at the Hanze University of Applied Sciences, Groningen, Netherlands. He also holds a part-time appointment at the faculty of economics and econometrics at the University of Amsterdam

Second, economists must abandon their presumptuous attitude to methodology. Methodologists understand that a model is only as good as the assumptions it is based on. This means that economists will have to question whether they are using the correct assumptions. These assumptions always have an ideological component that researchers should report. This means that economics should encourage multiple approaches. It is not just about building models. Third is the role of the users of economic research. Policy makers and journalists should not be intimidated by jargon and perceived authority. Economic research and analysis must be understood and socially relevant. Within academia, especially when social facts are under scrutiny, everything starts and ends with learning based on academic scepticism. Public discussion has to be part of that process.


52 www.efmd.org/globalfocus

Capgemini University is one of the world’s leading corporate universities. George Bickerstaffe talked to Vice President and University Director Steven Smith

Capgemini University, the in-house learning unit of consulting and IT group Capgemini, is one of the largest and most successful institutions of its kind in the world. Capgemini, a French company, has some 90,000 employees worldwide and in 2009 the University reached nearly 35,000 participants through its global curriculum delivered via classroom and virtual learning programmes. In 2007, it was recognised as both the "The Best Innovative Corporate University" and "The Best Mature Corporate University" at the International Quality and Productivity Center (IQPC)’s 9th Annual Corporate University Week in America.


Cap that! Steven Smith interview by George Bickerstaffe

53 EFMD Global Focus | Volume 04 | Issue 01 2010

35,000 Capgemini has some 90,000 employees worldwide and in 2009 the University reached nearly 35,500 participants through its global curriculum delivered via classroom and virtual learning programmes

In 2009 Capgemini University was awarded EFMD Corporate Learning Improvement Process (CLIP) accreditation. CLIP is a system for corporate universities and other corporate learning institutions that encourages quality benchmarking, mutual learning and sharing best practices and seeks to identify the key factors that determine quality in the design and functioning of corporate learning organisations. Founded in 1989, Capgemini University describes itself as “the heart, the home and the hub of the Group” with responsibilty for hosting and driving global learning programmes within Capgemini. It is based at Les Fontaines, near Paris, opened in 2003 and is comprised of a Forum building, sleeping accommodations to host 300 people overnight and a chateau built at the end of the 19th century by Baron James-Edouard de Rothschild. The University is headed by an American-born Director, Steven Smith. He joined the University in 1997 following careers in strategy and development at telecommunications group Alcatel and marketing at L’Oreal. At the time of gaining CLIP accreditation he commented: “The EFMD CLIP accreditation process is a huge achievement and a big step forward for us, crowning our efforts of the past 20 years. Recognition of the University’s strengths such as the impact of the University within the Capgemini Group through notably an international approach in bringing together all the cultures across the Group into the mainstream of the company’s business methods, but also the overall quality of our programs... make(s) us proud and we look forward to becoming the reference for corporate universities.”

How did you become associated with the University? I joined the University 12 years ago. That was a period when it had played an important role in a transformation that our company had just gone through and following that transformation you could say it had lost its way a little. A new President was called in and commissioned to turn it around. He brought me in in to help think about how we could revitalise the University. We did that by starting to think about the mission and how were we going to build the next generation of leaders for our company across all the different businesses. That whole thing of creating again a leadership development programme and trying to bring the group together went back to re-enabling the mission of how we were to become the heart, home and hub of the group again. At that time Capgemini had 30,000 employees and our largest country was France. It now has 90,000 and our largest country is India. So it’s a radically different company from 12 years ago. That raised questions about the university and its role within this global group that we were becoming.


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We used a simple system to get views of the university on each of the CLIP criteria – green, amber and red for good, neutral or poor

The university had in the past been very much associated with the chateaux. The physical site and the University were thought of as being basically the same thing. So one of the first big changes that we made about six years ago was that we said that we are not now just going to expect that people come to us; the University is going to start going to them.

What was the thinking behind seeking CLIP accreditation?

Well, we had been working very hard since the merger with Ernst & Young Consulting [which took place in 2000] and we were doing quite well. The University had won a number of awards for the way we had aligned the strategy of our teaching with the strategy of the group as a whole. So we knew we were quite good but we wanted to have that validated by someone outside. We also wanted to know, of course, places where maybe we were not so good and could improve. But essentially we wanted to find out where our strengths were and how we could leverage those strengths. I also wanted to use the whole process of CLIP accreditation as a sort of leadership development mechanism. Not just for the university team but also for the university’s key stakeholders, our business sponsors and so on. So we designed the whole CLIP accreditation process to help us achieve that. And the way we did that, I understand, was rather different from the way most other organisations approach it. I brought in a doctoral student to act as a programme manager for the Self-Assessment process and he helped me to carry out a 360-degree leadership development exercise. We identified three key target groups that we wanted to reach: our business leaders, human resources

including country learning and development people, and finally the university team itself. We conducted focus interviews with members of each of those groups and we covered every CLIP criteria with each of them. We then consolidated all of the views from the interviews and sent them back out to the all the people from the target group to validate the findings. We used a simple system to get their views of the University on each of the CLIP criteria – green, amber and red for good, neutral or poor. Then the University President and I collated all these and and made the final call; we were then ready for the Peer Review visit.

And what were the main things you learned?

The CLIP process allowed us to align everyone’s expectations and views of the University. It allowed us to formalise some things that had maybe been too implicit before. As I said earlier, the founding concept of the University was that it should be the heart, home and hub of the company. We all felt that this was a good mission but the Peer Review team pointed out that really we needed to be much more explicit about what that actually meant. So we really had to do some work on that and think hard about what those things meant in practice. For example, just to take one, we thought about what the heart is. First of all it’s a functional pump. So we envisioned the University as pump, pushing knowledge through the group. Second, it’s seen as the seat of emotion. So the University needed to be a place were people could emotionally connect to the group.


55 EFMD Global Focus | Volume 04 | Issue 01 2010

Cap that! Steven Smith interview by George Bickerstaffe

EFMD

Why CLIP? Companies are under ever-greater pressure to manage their learning and people development processes strategically. Critical objectives include: Attracting and retaining the best managers Nurturing tomorrow's leaders Aligning strategy, competencies and behaviours

One of the things we really welcomed about the CLIP process was the involvement in the review team of a business school academic

 isseminating knowledge and expertise throughout D the organisation Integrating the learning function into mainstream HR processes such as management development, talent management, succession planning and so on Shifting the emphasis from training to learning Performance improvement.

Another key thing to emerge from the accreditation process is that we have become much more rigorous in working with business sponsors, the people whom we work with on designing the programmes they need, on defining exactly what their learning objectives are, agreeing exactly what we want a programme to achieve. This is actually a lot more difficult than it sounds. But it’s important that it is done. Usually the agreement is that a programme will result in a change of behaviour that is measurable or something that we can put a number on like increased sales or better retention rates.

You are now going to become involved yourself in accreditation as part of an EQUIS Peer review team, looking at business schools rather than corporate universities. Are you looking forward to that? Very much so. One of the things we really welcomed about the CLIP process was the involvement in the review team of a business school academic. We really want to build bridges between business and business schools. Corporate universities are never going to replace business schools. For a start we don't have the resources or skills to undertake research. But we do welcome contacts with them. We want their views on what we are doing and we want to be challenged by them so that we know that what we are doing is going in the right direction.

To meet these challenges, the learning and training function in many firms has been re-engineered and upgraded to give it a central strategic role in the form of Corporate Universities, Corporate Business Schools, Academies, Management Institutes and so on. Most of these corporate universities are still relatively young organisations in Europe. However, they are beginning to reach a stage of maturity in which there is a felt need for more sophisticated means of assessment than are currently available in order to measure their effectiveness and justify the investments made in them. EFMD's Corporate Learning Improvement Process (CLIP) has been created to provide such a tool for a new profession. Drawing on the EQUIS quality assessment methodology, CLIP seeks to identify the key factors that determine quality in the design and functioning of corporate learning organisations. Internal self-assessment against a comprehensive set of rigorous criteria, defined and constantly updated by leading members of the corporate university community, is combined with external review by experienced peers. CLIP is a mechanism for quality benchmarking, mutual learning and sharing of good practice. CLIP is a service for EFMD members. The CLIP scheme is monitored by a Steering Committee made up of leading professionals in the field, including Chief Learning Officers from major companies, with input from Executive Education specialists from major European Business Schools.


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Has the world had enough of internationalisation? Nicola Hijlkema wonders whether the desire to be “international” has gone too far in business schools

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Sadly, the understanding of what it really takes to become an international business school is often lacking

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Fit for purpose: Has the world had enoughof internationalisation? by Nicola Hijlkema

Internationalisation is perhaps the most misunderstood word in the business school world. It is also the one most parroted by business school leaders. Twelve years after the introduction of EFMD’s EQUIS accreditation system (which stresses internationalism), business schools wherever they may be are stressing how international they are – or would like to appear. Sadly, the understanding of what it really takes to become an international business school is often lacking. At a meeting of external relations directors from EFMD schools in 2009 I had the pleasure of chairing several sessions on internationalisation with a French colleague who has lived many years in Sweden. Our joint backgrounds tally 12 countries in Europe, Africa and North America and we agreed that it was extremely enlightening to compare the national location of a school, or the nationality of the speaker, with the vision of what international means. In Britain, with a few honourable exceptions, internationalisation broadly means that there are lots of students at the school who do not hold British passports. The fact that they may have lived in the country for many years is irrelevant just so long as the number of nationalities looks good. This also applies to faculty. Many are native English-speakers, are from the British Commonwealth and trained in British business schools and universities. In continental Europe, internationalisation is often taken to mean that programmes are offered in English, some only designed for exchange students who are in turn used to boost statistics of international students. More and more people work in business schools in another country from their own.

In Britain, with a few honourable exceptions, internationalisation broadly means that there are lots of students at the school who do not hold British passports

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Interestingly, however, they often become assimilated, part of the national system and work in the language of their host country. This is often the case in the larger European countries such as France, Spain and Germany, where the linguistic and cultural influences are much stronger, or Italy, where the penetration of foreign languages is perhaps not as advanced. It is definitely the case in American schools, where the dominant culture effortlessly absorbs the foreign bodies. There is also a group of “mercenaries”, teachers who may have spent most of their working life in the business world and now travel the world sharing their experience with a younger generation. Some of them are very good teachers although they may not have highly prized academic credentials such as PhDs or extensive publication. Others are not. Detecting this latter group is a major concern for some of the new business schools in Central and Eastern Europe. It reminds me of the post-perestroika period when foreign consultants and academics flocked to the former Soviet bloc in order to share their sometimes-doubtful wisdom. Today’s crop often comprises people who have no knowledge of the country to which they propose to come and who think that their nationality and language must make them acceptable to academic institutions anxious to “internationalise” by bringing in doubtfully qualified non-native teachers. Clearly only a few schools, such as IMD and INSEAD, were created international. But there are other excellent institutions that have become international while not losing or abandoning their national roots. There is nothing wrong, for example, in a school such as IESE – today one of the big international players – still being grounded


58 www.efmd.org/globalfocus

as a Spanish school that came into being in the 1960s. Or London Business School – a major international business school – which is still shaped and influenced by its proximity to the City of London and its location in the heart of the British capital. On the contrary, I truly believe that successful business schools should remain rooted in their native culture while importing into their faculty, student body and programmes such elements as can colour and influence their research and teaching to become truly open to the world. But these elements must be real; and of real value. Take language, for example. Delivering programmes in English does not make you international. Often, nonnative speakers deliver courses in poor English merely to meet the requirements of ERASMUS students – or, indeed, accreditation systems. Some schools go further and introduce programmes in English designed to attract the many Asian students who help to fill their coffers. This can lead to ghetto-like courses with a majority of students not speaking English well, being taught in broken English by non-native lecturers. Who benefits by this? Definitely not the reputation of the school. To a certain extent, programmes can be international when taught in any language as long as they are delivered with a real understanding of the context and business environment outside the country where the school is located. However, they need to use truly international examples that illuminate the learning in the classroom.

they have a wider knowledge of more countries than do many of their competitors. And then we have the problem of the English language itself. Is it truly the universal language it is reputed to be? We all know that there are major differences between the English spoken in America and in Britain. Australian English, too, has evolved to reflect the influence of the non-British immigrants to that continent. There is an argument that the most grammatically correct English is written in India but this would surprise many native English speakers led astray by the accents and Bollywood stereotypes. What would surprise them even more is the difficulty that many for whom English is a second language have in understanding native English speakers.

In Britain, for example, English grammar has not been taught for decades. The variety of English spoken by many of our British colleagues is much more difficult to understand at international meetings than that spoken by non-native speakers who It is also true that the faculty of a school can have learned it correctly. There are not only be international if the members have gained the differences in dialects and pronunciation their doctorates abroad or have lived and but also the variety of British accents and a worked in another country. lack of consideration for their hearers who In fact, many Nordic schools have a very are listening to their second or third language. international faculty purely and simply International English may be a much less rich because it is a tradition for Norwegians, language than the native original but is Swedes, Danes and Finns to move around spoken by many more people. Many native the world studying and working. English speakers do not appreciate that since To take another example, some schools in the language is used extensively in academia Spain deliver the majority of their courses and business it has taken on a life of its own. in Spanish but their student body comprises Teaching materials present another problem. students from all over Latin America. Does this make them less international? Arguably Mainly because business studies originated in

Many Nordic schools have a very international faculty purely and simply because it is a tradition for Norwegians, Swedes, Danes and Finns to move around the world studying and working


Fit for purpose: Has the world had enoughof internationalisation? by Nicola Hijlkema

59 EFMD Global Focus | Volume 04 | Issue 01 2010

the use of more relevant teaching material and methods. However, the greatest stumbling block is the change of attitude and habits required for true internationalisation. It is not enough to have foreign students. It is not enough to have foreign teachers. You can bring in foreign academic materials. You can teach in another language from your own. But until you change the mentality of a school it can never be truly international.

90% Of the academic journals recognised in such rankings as the Financial Times, 90% are American publications

The challenge for the managers of business schools today must therefore be to decide what level of internationalisation is right for them. Not everyone needs to be international, after all

North America much academic writing is produced in English. And of the academic journals recognised in such rankings as the Financial Times, 90% are American publications. Many business schools use American cases since they are in English and easily available without thinking whether they are suitable for purpose in their own country. There are cases written by professors and lecturers from such leading business schools as Western Ontario, IESE, INSEAD, Darden, CEIBS, IMD and LBS that draw on widespread research into other areas of the world. But many other schools do not have the knowledge or the ability to select such materials, which may be more appropriate to the situation in their own countries. In countries where there are no large multinational companies, for example, surely it is wiser to look at cases on medium-sized companies in order to prepare students for the future economic development of their own country? Equally, human resource cases for huge global companies can have little relevance to a country where most enterprise is in the hands of small, often family owned, companies subject to the constraints of their own environment. These are often countries that are already very international in some aspects: their national language is not widely spoken elsewhere; the employment situation encourages their young workers to go abroad; their students seek education in other countries in order to improve their chances of being hired after graduation. Business schools in such areas need encouragement to internationalise through

One Italian school, when planning to change the language of teaching for its masters programmes from Italian to English, systematically went through the whole school looking at what needed to be changed: the signs in the corridors; the food in the cafeteria; the language capability of the administrators. All of these needed attention. Do the waiters and waitresses in your restaurant speak anything but your national language? Is the menu in other languages? Do you respect the religious convictions of your students and faculty? If the national character is reserved and regards counselling students about their personal problems as prying into their private lives, then you may have problems. Foreign students are away from home; they may be lonely; they may have problems with the bureaucracy; they probably need much more attention than your local students do. If the administrators working with students cannot empathise, the school is not truly meeting the needs of its new customers. The challenge for the managers of business schools today must therefore be to decide what level of internationalisation is right for them. Not everyone needs to be international, after all. Maybe there is a case for lowering our sights to a certain extent? There is still a market for good local educational institutions that educate the managers of national companies and have less lofty ambitions. Surely it is better to be a good local or regional school rather than a poor imitation of other so-called international institutions? ABOUT THE AUTHOR

Nicola Hijlkema is Vice Rector for International Relations at the Estonian Business School, Estonia.


60 www.efmd.org/globalfocus

The current recession is having significant, and potentially long-lasting, effects on the relationship between schools of management and corporations say Elio Borgonovi and Manuela Brusoni

50%+ Corporations are rolling back education expenditures – a quarter of the sample declared a drastic reduction – 50%-70% down in 2009 compared with 2008 – of their budget for management education


Companies, business schools and the economic crisis by Elio Borgonovi and Manuela Brusoni

61 EFMD Global Focus | Volume 04 | Issue 01 2010

One belief that everybody seems to agree on about the current recession is that the only way for a company to thrive during difficult times and to build sustainable business growth is to invest in innovation and in its core resource: the skills of its people. This is why management education tends to grow during periods of recession. Nevertheless, at a time when corporations are striving to cut costs, increase efficiency and trim all expenses that seem unnecessary, schools of management are also feeling the pinch. The Italian Association for Management Education Development (ASFOR) has for several years conducted an annual investigation aimed at identifying emerging trends in corporate – schools of management relations. The latest survey – conducted in 2008 through focus groups and questionnaires – involved 95 top Italian/Italy-based foreign companies and 48 ASFOR associates (with a total turnover of about 1 300 million) –See Figure 1 overleaf. It tried to analyse the impact of the economic crisis on management education and looked at policies on the demand side (corporations) and the reactions on the supply side (schools of management).

What really matters is the uncertainty of investments in corporate learning. Companies are not only shedding programmes, they are also reconsidering all the expenses made to date, questioning choices that previously seemed incontestable

A crisis, as its etymology suggests, is a time to separate, decide, judge and break up a routine and which allows us to distinguish the essence from the “frills” brought about by years of complacency. The most obvious figure to look at is the budget for management education. While on the supply side no major change is apparent, corporations, on the other hand, are rolling back education expenditures. A quarter of the sample declared a drastic reduction – 50%-70% down in 2009 compared with 2008 – and half the companies surveyed reported a 30% cut. Only those companies belonging to counter-cyclical sectors maintained their budget in line with previous years or even increased it. It is important to note that these figures refer to expected expenditures; the actual reductions could be even greater. What really matters is not so much the raw numbers as the uncertainty of investments in corporate learning. Companies are not only shedding programmes, they are also reconsidering all the expenses made to date, questioning choices that previously seemed incontestable. Although this has been an underlying trend for the last three years in the Italian market, the economic crisis has exacerbated it.


62 www.efmd.org/globalfocus

Cost-cutting leads a company to ask itself three questions about its learning strategy: – How much does it cost? – What do I really need? – How can I manage it internally? These questions should constitute the standard rule for making decisions but often they are only raised in tough times. The first question deals with the efficient use of resources. Companies have answered it by revising learning targets and priorities in terms of the participants in education programmes and the objectives to be met.

FIGURE 1

Industry distribution of survey participants Automotive Real Estate Luxury

At the same time, companies are asking schools of management to provide them with high-quality, tailormade programmes. Besides a lack of interest in standard solutions, companies are also urgently looking for crossfunctional subjects such as leadership, innovation and internationalisation. One trend, which clearly emerged in the survey, is that in the last three years the decrease in demand for open-market programmes, albeit slight, is nevertheless constant (one percentage point each year). The discrepancy between forecast and actual demand for custom programmes is even more interesting, with the latter five percentage points higher than the former. These two demands –customisation and industry-specific core education – are strategically incompatible. Usually, qualifying programmes are an industry-specific competence and schools of management are probably not interested in providing this kind of content. However, there could be an opportunity for schools to reinvent themselves as education solvers. They would no longer be providers, competing with corporate faculty, but they would help companies to find the best solution, in terms of learning strategy, shifting their services to the design and architecture of the corporate learning system. These faint signals of a change in the role of schools of management result from the modification of corporate education strategy. That translates into a reduction in or exclusion of residential programmes, greater use of internal faculty, a contraction in the duration of programmes and a systematic use of all sources of financing. Managing management education internally effectively brings

ICT

Healthcare

Retail

4%

4%

5%

Utilities

6% 10%

3% 3% 3% 2%

Corporate programmes will involve only those people whose education is vital (as declared by 50% of respondents) and they are going to be about the company’s core services and processes (63% of respondents). In other words, corporate learning is going to focus on qualifying education tied to an operational, productive dimension perceived as a driver for reaching corporate goals. These kinds of programmes are also more easily carried out by an internal faculty since they reproduce the know-how of the company.

Food & Beverage

Public Sector

11%

Consumer Goods

12% 21% 16%

Manufacturing

Services

Banking

Schools are increasingly asked to become a strategic business partner for companies, helping them to develop their internal faculty and to define corporate learning goals and how to reach them


Companies, business schools and the economic crisis by Elio Borgonovi and Manuela Brusoni

63 EFMD Global Focus | Volume 04 | Issue 01 2010

Companies have been revising learning targets and priorities:

50% 50% of respondents declared corporate programmes will involve only those people whose education is vital

63% 63% of respondents declared corporate programmes would only be about the company’s core services and processes about an overhaul of departments in charge of education (more internal faculty, downsizing of the education department) and, crucially, a direct link with top management. Schools are increasingly asked to become a strategic business partner for companies, helping them to develop their internal faculty and to define corporate learning goals and how to reach them. However, in order to do this, they need conscious customers who are able to select and recognise the right provider; customers who make effective choices not because they are looking for well-defined programmes but because they want – and have the capability – to work in partnership with schools of management. In order to fulfil their new role, therefore, schools of management should work on content and learning backdrops to meet this demand and by developing a market learning intelligence that delivers on time, or more importantly, ahead of time. The main risk for schools is if they continue

working in a functional way, offering a higher degree of innovation more through open market programmes than in custom programmes. Indeed, innovation in content and learning sets is urged by companies to an even greater extent in custom programmes, which could become “action research” in themselves. Schools of management should enshrine the value they offer in those subjects in which they excel and which make them unique in the eyes of customers. Where companies are asked to become conscious clients, schools must, in turn, make themselves recognisable. There is no more room for generalists, since corporations would not be able to identify them in the global market. Companies are looking for strategic partners and not for omniscient ones. Companies are looking for someone who can provide them with a creative and cross-functional interpretation of their core competencies on which to build learning strategies.

ABOUT THE AUTHORS ELIO BORGONOVI

Elio Borgonovi is a Board Member of ASFOR in charge of Research and former Dean of SDA Bocconi. MANUELA BRUSONI

Manuela Brusoni is a member of the ASFOR Research Group and a professor at SDA Bocconi.


64 www.efmd.org/globalfocus

Focus on... CLIP

Creating business impact through learning functions The most recent EFMD Sharing Best Practice CLIP Workshop focused on the creation of short- and long-term business impact through learning functions. Andrew Rutsch describes a framework to help diagnose how to do it The current economic environment has increased uncertainty, with markets and customers increasingly asking organisations to deliver more value for less money. As a result, firms are more than ever expected to control their costs and swiftly enhance their value proposition while preparing for the long term. This has serious implications for corporate learning. The key question is: How can learning functions facilitate strategically aligned learning with less money and more business impact in the short term while supporting the firm’s strategic renewal in the long term? The learning function’s agility in supporting the management of the tension between exploiting what has worked in the past while exploring what might work better in the future has become paramount. If a firm succeeds at learning faster than its competitors this may be a key competitive advantage as Arie De Geus suggested in his seminal Harvard Business Review article in 1988. The most recent EFMD Sharing Best Practice CLIP Workshop hosted by STMicroelectronics and supported by AREVA in September 2009 in Aix-en-Provence brought together leading

international companies to explore and discuss this topic. STUniversity and Credit Suisse Business School, both CLIP-accredited organisations, highlighted their approaches in group sessions. Four success factors – Learning Culture and Innovation, Learning Strategy and Vision, Positioning, and Human Capital – emerged that the participating firms deemed key in creating short- and long-term business impact through learning functions. This article first introduces a framework that explains how organisational learning contributes to the strategic renewal of an enterprise. Second, the framework is used as a diagnostic to help determine how STUniversity and Credit Suisse Business School create short- and long-term business impact related to the four key success factors.

The 4I Framework of Organisational Learning

The 4I Framework of Organisational Learning published by Mary M Crossan, Henry W Lane and Roderick E White in the Academy of Management Review in 1999 is probably the most comprehensive theoretical contribution

EFMD


Focus on: CLIP: Creating business impact through learning functions by Andrew Rutsch

to strategic management practice from an organisational learning perspective.

to group and individual level, affecting how people act and think.

It describes the dynamic multilevel nature of the process of strategic renewal and captures the interplay between the process and levels of the organisation. Four assumptions form the basis for the framework:

The three levels are the glue holding the framework together. Intuiting and interpreting happen at the individual level, interpreting and integrating at the group level, and integrating and institutionalising at the organisational level. (See Figure 1 – overleaf)

1. Organisational learning involves a tension between assimilating new learning (exploration) and using what has been learned (exploitation)

Learning functions should facilitate the learning of new ways in terms of what might work better in the future while delivering learning in terms of what has worked in the past

65 EFMD Global Focus | Volume 04 | Issue 01 2010

2. Organisational learning is multilevel: individual, group and organisation 3. The three levels of organisational learning are linked by social and psychological processes: intuiting, interpreting, integrating and institutionalising (the 4Is). 4. Cognition affects action (and vice versa) The assumptions support the central proposition that the 4Is are related in bottom-up feed-forward and top-down feedback processes across the levels of the organisation. Managing an appropriate balance between exploration and exploitation is a key factor in strategic management. Thus, learning functions should facilitate the learning of new ways in terms of what might work better in the future while delivering learning in terms of what has worked in the past. The authors conceive of organisational learning as a dynamic process. Learning does not only occur over time and across levels, it also creates a tension between assimilating new learning (feed forward) and exploiting what has already been learned (feedback). Feed-forward processes move new ideas and actions bottom-up from the individual to the group to the organisation level, translating into transformation of products, procedures, structures and strategy. Concurrently, what has already been learned feeds back top-down from the organisation

The next section presents an application of the 4I Framework to describe how Credit Suisse Business School and STUniversity create short- and long-term business impact and relates it to the four key success factors identified in the workshop.

How learning functions create business impact Learning culture and innovation A culture that continuously fosters bottom-up explorative learning is instrumental in driving innovation and business impact at the individual, group and organisational levels. The learning function plays a key role as a think tank for providing an environment conducive to such learning. At the same time, a culture of discipline focused on executing corporate strategy contributes to superior performance. Hence, a culture fostering absorption of the flows of both top-down learning to realise short-term efficiencies and bottom-up learning for long-term renewal is probably most effective. Both Credit Suisse Business School and STUniversity display continuous efforts to nurture a culture that drives both exploitative and explorative learning. The mission of one of the two learning functions was revalidated in 2007 to support implementation of corporate strategy and disseminate the company culture. In addition a revised learning offering included innovation support and consultancy to explore new business and innovations. Moreover, the learning function helps the


66 www.efmd.org/globalfocus

Focus on... CLIP business navigate through the current environment through change management support while the new innovation offering increases business impact in the long term.

FIGURE 1

4I Framework of Organisational Learning (Crossan et al 1999)

The other learning function contributes to a culture of both discipline and flexibility through new flagship programmes. These include:

INDIVIDUAL

In addition, human capital portfolio management and an engagement survey contribute towards developing a culture capable of fostering both predictable and ambiguous learning.

INTUITING INDIVIDUAL INTERPRETING

GROUP

FEED BACK

Front Line Training – a qualification and certification framework targeted at account managers and staff.

INTEGRATING

ORGANISATIONAL INSTITUTIONALISING

Learning strategy and mission

A learning strategy guided by the firm’s mission and strategy should be articulated at the firm level and regularly reviewed for short- and long-term relevance. Such alignment guides strategic integration, contributing to strategy execution through top-down learning while facilitating bottomup exploration and experimentation. Both learning functions are executing a mission and learning strategy in line with their firms’ strategic directions. For example, the revalidated mission of one learning function enables alignment of organisational learning with the current strategy, contributing to the dissemination of accumulated learning, while the new innovation offering supports risk taking and flexibility. A steering committee guides regular revision of the learning direction and strategy.

ORGANISATIONAL

FEED FORWARD

Managing through Difficult Times – key do’s and dont’s for managers in challenging times Leadership Forum – an interactive strategy workshop on topics such as strategy, client management and human capital management with the CEO targeting executives and selected high potentials

GROUP

If the learning function is to make a strategic contribution to the business then it should play a role larger than being simply a training provider


Focus on: CLIP: Creating business impact through learning functions by Andrew Rutsch

Alignment with the business and HR through a governance structure establishes credibility with key stakeholders and drives exploitative and explorative learning

The other learning function executes corporate strategy through a mission that guides translation of strategic business objectives into tailored learning. It has also extended its mandate, resulting in including human capital management in addition to learning and development (L&D).

play a role larger than being simply a training provider. Integration of the larger perspective of human capital management (succession planning, performance management, organisation development) under the learning function’s umbrella enhances business impact.

Positioning

In particular, it provides a view on total investment into L&D, facilitating the right learning approach and allocation at the different organisational levels.

The learning function should be clearly positioned within the company. Its mission, mandate and design should be appropriate to this positioning. Alignment with the business and HR through a governance structure establishes credibility with key stakeholders and drives exploitative and explorative learning across the organisation, group and individual levels. The two learning functions have increased their positioning, building on extended mandates and steady contributions to the strategic development of their organisations. The revalidated mission and new innovation offering of one learning function has increased its positioning, supported through its steering committee. Its impact is reinforced through a methodology to guide analysis of performance, design, development and deployment of effective learning solutions and a pool of trainers from the business to cascade key programmes. As a result, it is better able to challenge the top leaders on the right combination of top-down exploitative and bottom-up explorative learning needed by the firm across the different organisational levels.

ABOUT THE AUTHOR

Andrew Rutsch is Program Director Corporate Learning Improvement at Capgemini University.

67 EFMD Global Focus | Volume 04 | Issue 01 2010

The other learning function has increased its position through its integrated learning value proposition and serving all businesses and regions through a business-aligned organisational model and governance structure.

Human capital If the learning function is to make a strategic contribution to the business then it should

At one learning function, expansion of its mandate to also include innovation in conjunction with strengthening high-impact learning has led to more strategic partnering. The other learning function’s extended mandate comprising both L&D and human capital management enables it to play a truly strategic role. The 4I Framework is not intended to serve as a comprehensive diagnostic of how learning functions create business impact as it was developed for organisations in which the learning function is one of several actors. As a result, the 4I Framework does not incorporate, for example, actual practices or capabilities needed by learning functions in their endeavours towards creating business impact. However, this discussion of the four key success factors through the lens of the 4I Framework is an attempt to structure analysis of the role and business impact of learning functions from one perspective at a conceptual level that might prove useful.


68 www.efmd.org/globalfocus

EFMD 2010 | www.efmd.org/conferences

Upcoming events February 2010

March 2010

EFMD Entrepreneurship Conference

EFMD Advisory Seminar Dates / Venue

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21/23 February Paris, France Theme

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2010 EFMD Annual Conference

9 March Brussels, Belgium

23 March Brussels, Belgium

20 April Brussels, Belgium

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Theme

Integrating Executive Education into Business School Strategy

Faculty Management in Business Schools Host

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Is Management a Profession?

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EPAS manual, standards, criteria... Host

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James E. Hunton, PhD, Darald and Juliet Libby Professor of Accounting at Bentley University, conducts groundbreaking research in the field of accounting and ethics.

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And, as recipients of a grant from the Ernst & Young Foundation, we are transforming our undergraduate accountancy and finance curriculum and accelerating the exposure of students to advanced accounting concepts

EFMD and Fundação Dom Cabral invite you to attend the International EFMD-FDC Conference Strategic Movements in Business Education. The conference aims at analysing experiences and trends in the field of executive education from the perspective of its different players namely, Business Schools, Corporate Universities and Consulting Firms.

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13th BEST BUSINESS SCHOOL WORLDWIDE

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Email: info@efmd.org

Dean Bernard Ramanantsoa on selecting quality student applicants:

Phone: +32 2 629 08 10 Fax: +32 2 629 08 11

Rue Gachard 88 – Box 3 1050 Brussels Belgium

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Schools out Jordi Canals looks at the challenges facing business schools

Frog march David Gosset explains China’s urge to go global

Business model Emerson de Almeida considers the business of education

What deans do Julie Davies and Howard Thomas survey British deans

A theory too far? Frank Jan de Graaf on a dominant economic idea

Stay at home Enough internationalism says Nicola Hijlkema

GF Vol 04 Issue 01  

Schools out Jordi Canals looks at the challenges facing business schools • Stay at home: Enough internationalism says Nicola Hijlkema • What...

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