GF Vol 02 Issue 03

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Volume 02 | Issue 03 2008

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EFMD Global Focus

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Rue Gachard 88 – Box 3 1050 Brussels Belgium

Why Judge’s Dean Arnoud De Meyer likes being an integral part of a top university

Volume 02 | Issue 03 2008

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

Email: info@efmd.org

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No Cambridge blues

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GMAT The True Test of Business 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.

Diverse opinions EU Commissioner Janez Potocnik celebrates Europe’s differences

Flat refusal Strategy guru Pankaj Ghemawat says the world is still a rough place

CLIP art Martine Plompen reports on why the CLIP process is working well

Antai success China’s Antai College of Economics and Management wins EQUIS accreditation

Now it’s personal David Lamond opts for individual, not corporate, social responsibility

Stay-at-home OZ? Gerry Griffin and David Cox on making Australian students more international

5/ 6 November 2008 EFMD – CEIBS conference Shanghai, China Chinese Companies Going Global – Managerial Challenges & Aspirations Are the global markets ready for these new global players? What are the threats and the opportunities?

What are China’s views on the European economy and how does Europe view the Chinese economy?

How are the differences in organisational cultures and governance perceived by the different markets?

How are these challenges influencing the Management Education and Management Development agendas?

This conference aims at exploring both the challenges for the corporate world, focusing particularly on the managerial challenges, and the impact of challenges on management education and executive development.

The conference is followed by an EQUIS seminar in the afternoon at CEIBS. For further information please contact: delphine.hauspy@efmd.org or visit www.efmd.org

4 November 2008 Antai College of Economics & Management, Shanghai, China

6/8 November 2008 AAPBS Annual Meeting, Fudan University, School of Management, Shanghai, China

Responsibilities of Business Schools Summer Chen, chenxx@sjtu.edu.cn

Annual meeting of the Association of Asia-Pacific Business Schools Stephanie Xu, lihuaxu@fudan.edu.cn

In focus...

EFMD Global Focus | Volume 02 | Issue 03 2008

Volume 02 | Issue 03 2008

In focus How should a business school be governed? What are the key elements in its relationship with society and the wider academic community? These are some of the key questions posed in this issue of Global Focus.

For example, after 23 years at INSEAD in France, Arnoud De Meyer is now Dean of the Judge Business School at the University of Cambridge in Britain. In a wide-ranging interview (page 8) he makes the key point that, unlike INSEAD, Judge is an integral part of a famous university.

This, he believes, has given him “an opportunity to build a different type of business school. One that has the ambition of being in the top group but with a different strategy to INSEAD or London Business School and others, a strategy of being very integrated into the university, not a stand-alone autonomous unit”.

In the final part of his extensive review of the state of management education in Europe, Eric Cornuel, Director General and CEO of EFMD, also argues for a fundamental reassessment of its role and direction.

While on page 52, Julie Davies of Britain’s Association of Business Schools reveals research that shows the qualities needed by business school deans at a time when a quarter of British schools are looking for new leaders.

Other articles look more at the role of the corporate sector.

In an interview on page 24, for example, strategy guru Pankaj Ghemawat, arch opponent of the idea that the world is “flat”, argues instead that what we have today is “semiglobalisation”, large and distinctive differences across national and regional borders that corporate strategy has to accept and adjust to.

On page 44, academic David Lamond takes issue with the idea of “corporate” social responsibility when in reality the dubious ethical practices that corporations sometimes become involved in are the responsibility of individuals within an organisation and not of some corporate legal entity.

Finally, in an edited version of a presentation to the EURAM 2008 conference earlier this year (page 14) Janez Potocnik, European Commissioner for Science and Research, makes a detailed argument for the European Union to celebrate its diversity and, indeed, see this as the “engine for growth” it is.

www.efmd.org/globalfocus

Volume 02 | Issue 03 2008

Contents Global Focus The EFMD Business Magazine

1 In focus

Executive Editor

4 Talking Shop CLIP and London Business School First EQUIS accreditation seminar in China Advisory Services Seminars GMAC professional development event in London

Matthew Wood matthew.wood@efmd.org Advisory Board

Eric Cornuel, Jim Herbolich, Howard Thomas Consultant Editor

George Bickerstaffe bickerstaffe@btinternet.com Contributing Editors

Eric Cornuel, David Cox, Julie Davies, Gerry Griffin, Bruce Jenks, Antoine Kissenpfennig, Jonathan Lagoe, David Lamond, Martine Plompen, Janez Potocnik, Ronald Sibert Design & Art Direction

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

Jebens Design Ltd / EFMD unless otherwise stated ©

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 ©

8 No Cambridge blues Arnoud De Meyer, Director of Judge Business School in Britain, explains to George Bickerstaffe that the school’s close integration with the University of Cambridge could be a model for business schools in the future 14 Diversity as an engine of growth Janez Potocnik, European Commissioner for Science and Research, sets out how Europe is learning to profit from its diversity 20 The road ahead for European management education Eric Cornuel, Director General and CEO of EFMD, concludes a two-part series on management education in Europe with some thoughts on how the sector might be restructured and revitalised 24 Because the world is round it turns on strategy The world economy is not truly integrated and is unlikely to be so for decades, if ever. Pankaj Ghemawat, arch-proponent of ‘semiglobalisation’ as the real challenge for international corporate strategy, talks to George Bickerstaffe

EFMD

28 Quality improvement in corporate learning organisations Martine Plompen on a new report that emphasises the gains offered by the EFMD CLIP accreditation process for companies’ learning organisations 32 Doing business with the poor Bruce Jenks, Assistant Secretary General and Director, Partnership Bureau, at the UNDP, shows how by engaging the poor as clients, customers and producers, the private sector can succeed in the simultaneous pursuit of wealth creation and social impact

Contents

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EFMD Global Focus | Volume 02 | Issue 03 2008

38 Joining forces to promote quality and performance Ronald Sibert, Director, Strategic Alliances, Graduate Management Admission Council, describes how growing collaboration between EFMD and GMAC is providing new insights into the global graduate management education market 42 EQUIS and the future of Chinese business schools This summer Antai College of Economics and Management, Shanghai, China, gained EQUIS accreditation. Dean Wang Fanghua assesses the implications for the school. Interview by George Bickerstaffe

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44 Self-interest, cultural relativism and ethics in the global marketplace David Lamond argues that ‘responsibility’ for ethical behaviour cannot simply be attached to a legal entity. Ultimately it must belong to individuals 48 The best of both worlds Antoine Kissenpfennig and Jonathan Lagoe describe how a close partnership between a client organisation and a management development provider can lead to powerful results in leadership training

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52 What does it take to be a business school dean?

Nearly a quarter of British business schools have changed or are changing their deans. Julie Davies, Head of Research and Development at the Association of Business Schools, reports on ABS research that shows what deans themselves think is needed for the job 56 Mobility: a small step in a long journey Australians are reluctant to travel internationally during their studies at university. Gerry Griffin and David Cox of the University of South Australia outline some initiatives that overcome this and add to the overall ‘wellroundedness’ employers say they are looking for

By engaging the poor as clients, customers and producers, the private sector can succeed in the simultaneous pursuit of wealth creation and social impact page 32

www.efmd.org/globalfocus

News and events in brief from the business world

Talking shop First EQUIS accreditation seminar to be held in China EQUIS will hold its first accreditation seminar in China during the Shanghai Management Development week, which includes the 2008 EFMD – CEIBS Conference: “Chinese Companies Going Global - Managerial Challenges and Aspirations”.

The seminar, led by Julio Urgel, Director, EFMD Quality Services and EQUIS, will take place on 6 November. The programme is: 14:15 - 15:30 Welcome and introduction to the EQUIS Process 15:45 - 16:45 Understanding the EQUIS Standards and Criteria 17:00 - 18:00 Research, Internationalisation and Corporate Connections: the EQUIS expectation The objectives are: – Practical application of the 10 EQUIS Standards and Criteria

CLIP and London Business School London Business School’s Executive Education Forum “Learning Solutions – Business Impact” in July featured an EFMD presentation by Shlomo Ben-Hur, Vice-President Leadership Development & Learning, BP International, and Richard Straub, Director of Development and Corporate Learning Improvement Process (CLIP) at EFMD on the value of the CLIP programme.

EFMD

The Forum was attended by some 60 human resource development managers and executives and also featured presentations by leading academic including Nirmalya Kumar, Lynda Gratton and Costas Markides.

The EFMD presentation emphasised, from both an EFMD and corporate perspective, that CLIP is not just another quality programme but a way of advancing the strategic importance of corporate learning via an in-depth peer-review-based process.

Rory Simpson, Associate Dean of Executive Education at LBS, comments that the presentation “greatly enriched the programme and LBS is proud of its association with EFMD and CLIP and is delighted that the interaction over this event was mutually rewarding”.

See page 28 for more details on CLIP and the latest report on the key factors that determine quality in the design and functioning of Corporate Learning Organisations. www.efmd.org/clip

– Understanding the key stages of the EQUIS Accreditation Process: application, eligibility, self-assessment, peer review and continuous improvement – Making the most of the Self-Assessment process and preparing an effective Self-Assessment Report – Deciding whether you are ready for EQUIS Accreditation: gap analysis – Exploring alternatives: would EPAS Accreditation be a better option?

The seminar is targeted at both EQUIS-accredited schools that want to get a better understanding of the EQUIS standards and criteria and those considering EQUIS accreditation for the first time.

It will be relevant for Deans and Directors, Directors of External Relations and those responsible for accreditation within the school as well as experienced EQUIS Peer Reviewers. (For peer reviewers and members of the EQUIS Committee and Awarding Body, the fee is waived.)

For more information visit www.efmd.org/equis to register or contact veronique.roumans@efmd.org

EFMD Global Focus | Volume 02 | Issue 03 2008

Talking shop

LBS is proud of its association with EFMD and CLIP and is delighted that the interaction over the Executive Education Forum event was mutually rewarding Rory Simpson, Associate Dean of Executive Education, LBS

Register now for the remaining EFMD Advisory Services Seminars in 2008 – Business Diplomacy and Reputational Capital – November 12 – Curricula Development for Business Schools: Incorporating Public Affairs -November 14 – Attracting Quality International Students to Programmes – November 20 – Emerging Technologies for Management Education – December 9 For more information visit www.efmd.org/conferences

GMAC professional development Third Annual Meeting of the Global Business School Network event in London The third annual meeting of the Global Business School Network (GBSN) was held on 9-10 July, in Nairobi, Kenya.

The purpose of the meeting was to bring together representatives of the network along with other interested and relevant parties to continue exploring best practices in business education, discuss new ways of forming beneficial partnerships and to foster stronger ties among partner schools.

The theme this year was promoting local business schools as an innovative tool for national development. Representatives from business schools, foundations, civil society, government and companies from around the world came together to discuss the importance of management education in implementing successful growth and development strategies.

The Graduate Management Admissions Council (GMAC) will host an interactive meeting to explore ways to “mind the communications gap” in London in October.

Designed for marketing and admissions professionals with decision-making and direction-setting responsibilities, participants will join technology and new media experts to identify and explore ways to leverage new and emerging technologies in marketing and admissions to help attract the best students to their schools.

Mind the Communication Gap: Using Communications Technology in Marketing and Admissions will take place on 23 - 24 October, Imagination Gallery, London.

For more information visit www.gmac.com or contact Simon White at siwhite@gmac.com

Eighteen representatives of GBSN member schools from seven countries were present, while 60 representatives from an additional 22 business schools participated.

The meeting was also well attended by members of the private sector and several NGOs and development organisations sent participants.

During the two-day meeting a number of sessions were held on various topics surrounding the central theme. These included: Importance of Management Education; Strategic Advantage of Business Schools; Project Showcase; CEO Roundtable; Health Management; Tourism Management; NGO Management; Entrepreneurship and Microfinance; Technology in Business; and Management Education Best Practices.

Throughout the discussions, the importance of management education for national development was frequently highlighted. The message from the private sector was clear – business schools must be more relevant. Schools were challenged by the CEO Roundtable to produce graduates who could navigate the challenges of local environments while negotiating the complexities of a global economy.

For more information on the MERC network visit www.mercnetwork.org

www.efmd.org/globalfocus

News and events in brief from the business world

Talking shop Global Forum for Responsible Management Education

International Deans’ Programme (IDP) in association with EFMD and ABS

The role of a business school dean has become increasingly pressurised and challenging in today’s highly competitive global environment. The new International Deans’ Programme (IDP), beginning in December 2008, is targeted at recently appointed deans/directors of business schools that are members of the Association of Business Schools (ABS) and/or EFMD.

4– 5 December 2008 United Nations, New York City, US

Participate in a global event where business schools and managementrelated academic institutions will for the first time discuss their involvement in the global agenda.

Take part in a first-ever event of the academic world at the United Nations in New York, which will add global visibility and value to participants in the Principles for Responsible Management Education.

Learn from peers and committed experts about how your business school can provide real-world learning opportunities to create globally responsible business leaders who make the world a better place.

Who should attend?

It is a tremendous networking opportunity offering the chance to increase international collaboration. IDP enables a group of up to 20 deans from around the world to visit business schools in three countries.

They will gain a unique overview of strategy, operations, structures and future markets in business and management education.

In the first programme the three compulsory modules comprise study visits to:

– Deans, Administrators, Directors of Centres and Program Directors from academic institutions that are already participating in the Principles for Responsible Management Education (PRME) initiative. In this event, their ideas, actions and experiences, which are being discussed now in five PRME Working Groups, will be presented to all participants.

Rio de Janeiro, 3-5 December 2008 Petrobras University

– Deans, Administrators, Directors of Centres and Program Directors interested in sharing views and experiences concerning PRME issues: sustainability, corporate citizenship and corporate social responsibility in the curriculum, research and learning methodologies of management education.

Bled, 22-23 June 2009 IEDC – Bled School of Management

In six break-out sessions, deans and experts, chaired by high-level representatives of the PRME co-convening organisations, will discuss with participants the main findings of the PRME Working Groups on: – How to get started with the PRME – How to progress in curriculum change – New challenges and perspectives in management research – Perspectives on new learning methodologies – How to report on progress in the PRME initiative – Business schools as a space for dialogue and partnerships The Global Forum will also include a plenary session on the future governance of the initiative, an official reception with a presentation by the Mayor of New York (TBC) on sustainability and the city, as well as a final plenary session for which UN Secretary-General Ban Ki-Moon has been invited to address participants.

For more information visit www.unprme.org

Madrid, 1-2 April 2009 IE – Instituto de Empresa Business School

Only five places remain on the programme.

Contact Virginie Heredia-Rosa, virginie.heredia-rosa@efmd.org to reserve a place.

2008 EFMD and AACSB Global Collaboration Conference hosted by IESE Business School, 16-18 November 2008, Barcelona, Spain Fostering key partnerships through international collaboration and strategic alliances is critical to the missions of the world’s leading business schools and to help them understand trends that shape management education.

Presented jointly by AACSB and EFMD, this conference explores how global networks give business schools a competitive advantage in a world that becomes smaller and more complex each day.

For more information contact diana.grote@efmd.org or visit www.efmd.org/conferences

EFMD Global Focus | Volume 02 | Issue 03 2008

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

www.efmd.org/globalfocus

A

rnoud De Meyer has spent a quarter of a century in the management education “industry” – mostly at the top level – and 23 of those years at one institution, INSEAD in France, the first truly international European business school.

Today he sits in a modest office (which he jokes about having redecorated) on the sixth floor of the colourful post-modernist pile that is Judge Business School at the University of Cambridge in Britain as its Director (Dean) and Professor of Management Studies.

Arriving there has been a long and eventful journey.

Professor De Meyer, a Belgian, is an engineer by training and specialises in the management of technology innovation. His initial ambition was to work in industry but after taking his PhD he was encouraged to visit INSEAD and was offered a faculty job teaching operations management. He was, he says, attracted by its ambitions to be a top business school and its international atmosphere, a little unusual in the early 1980s.

What was initially an intention to stay for a year or two and then move back to the business world eventually became a 23-year stint in Fontainebleau.

During that time he served as Dean of the MBA Programme, Dean of Executive Education, Director of the Euro Asia Centre, Dean of External Relations and Administration, and Deputy Dean.

However, he regards setting up and acting as the first Dean of the INSEAD campus in Singapore as one of the most significant achievements of his career ( “so far”, he says) and certainly one of the most enjoyable periods of his life.

Things changed with the retirement as Dean of INSEAD of Gabriel Hawawini in 2006. Although a candidate, Professor De Meyer thought it unlikely he would be made Dean. INSEAD had set its mind on an outsider (a decision he approves of) to take over from Dean Hawawini. In 2006 J Frank Brown, an American from PricewaterhouseCoopers, and well connected with INSEAD, took over and Prof De Meyer was to some extent “in play”.

(For a profile of Dean Brown see Global Focus Volume 1, Number 1, Winter 2007.)

No Cambridge blues Arnoud De Meyer, Director of Judge Business School in Britain, explains to George Bickerstaffe that the school’s close integration with the University of Cambridge could be a model for business schools in the future

No Cambridge blues: Arnoud De Meyer interview by George Bickerstaffe

Lord Browne and the Vice-Chancellor of Cambridge University told De Meyer that if Cambridge wanted to retain its status as a top university over the next ten or 15 years then it needed a top business school

EFMD Global Focus | Volume 02 | Issue 03 2008

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7th Judge Business School is ranked seventh globally in the Economist Intelligence Unit’s 2007 list and tenth in the world in the Financial Times 2008 ranking For a while he resisted all blandishments but admitted he “perhaps hesitated half a second too long” when the University of Cambridge came calling.

Meetings with Lord Browne, Chairman of Judge Business School’s Advisory Board and former chief executive of BP, and the Vice-Chancellor of Cambridge University followed.

They told him that if Cambridge wanted to retain its status as a top university over the next ten or 15 years then it needed a top business school.

Soon it was a done deal.

“Judge Business School reminded me a bit of what INSEAD was like in the 1980s,” he says. “There was an ambition to make it a top business school. In addition, there was full support from the top of the university and a clear message that this business school was at the heart of the university.”

That’s a key point. The accepted theory is that most business schools like to be free-standing, as far-removed as possible from any parent university (which they often feel doesn’t understand the point of a business school or, worse, regards them as academically second class).

Professor De Meyer says in his two years at Cambridge he hasn’t experienced much of that. And in any case, he says, “I felt there was an opportunity to build a different type of business school. One that has the ambition of being in the top group but with a different strategy to INSEAD or London Business School and others, a strategy of being very integrated into the university, not a stand-alone autonomous unit.”

This, he thinks, could be a model for the future. The school is closely involved with other university departments, including engineering, finance, medicine, law and technology. It seems, says Professor De Meyer, “to work well”.

Having held virtually every administrative post short of the deanship at INSEAD he says he was “at the logical end of a cycle” when the approach from Cambridge came. Though he looks back at his time at INSEAD with “warmth, esteem and friendship; after so many years you do feel that you want to do something new”.

He was also in his early 50s and felt it was the right time to think about what he wanted to do with the remaining years of his professional career.

His first 25 years have been marked by an intense and early involvement in Asia, fuelled by his interest in manufacturing technology at a time when (the 1980s) the West was transfixed

by Japanese manufacturing prowess.

But, inspired by an early mentor at INSEAD, Henri-Claude de Bettignies, who in the 1970s started and developed INSEAD’s activities in Japan and was instrumental in creating INSEAD’s Euro-Asia Centre in 1980, he was also convinced that “Asia” was more than just Japan and that China, and indeed India, would eventually be major players. (He first visited Shanghai in 1986.)

And he believes that just as Japan has provided many lessons for the West, so have China and India.

“We shouldn’t forget that quite a few of the insights in Japan came out of the environmental conditions there,” he says. “The whole Just-in-Time system, for example, developed from the fact that they could not finance the working capital to invest in inventory.”

Similar lessons can come from China’s social and cultural experiences, he says, such as the importance of networks and the fact that low-cost production can be achieved as a result of flexibility and not just economies of scale.

India, too, has shown that, contrary to mainstream economic theory, a developed economy can be built on the service

No Cambridge blues: Arnoud De Meyer interview by George Bickerstaffe

11 EFMD Global Focus | Volume 02 | Issue 03 2008

Students coming to business schools today, De Meyer says, are smarter, better educated and know a lot more about management than they did in the past and schools will have to react Left: Arnoud De Meyer

IMAGES COURTESY: JUDGE BUSINESS SCHOOL

Far left , left centre, below: Judge Buiness School

sector (software, for example) rather than manufacturing. In India, in fact, the manufacturing sector largely arose after the service sector had become established.

The impact of Asia is just one of the trends now affecting management education that Professor De Meyer believes will influence how Judge Business School develops.

As well as Asia he sees an influence from the wider issues of globalisation and internationalism generally; a need for a more tailored curriculum, particularly at the MBA level; the adjustment to the Bologna process in Europe; the need to integrate the company into wider society; and the effects of “information overload”.

He thinks that Judge Business School is well-positioned to respond to globalisation. The School is ranked tenth in the world in the Financial Times 2008 ranking and seventh globally in the Economist Intelligence Unit’s 2007 list.

The 2007 MBA class of 150 students included 47 different nationalities, with 90% coming from outside Britain.

The plan is to increase student numbers at Judge Business School across all programmes and Professor De Meyer says

that the Bologna Agreement to integrate higher education across Europe will help stimulate this, arguing that it “will offer a lot of opportunities to British schools, which have a long tradition of bachelors and masters programmes”.

But that is no cause for complacency. Students coming to business schools today, he says, are smarter, better educated and know a lot more about management than they did in the past and schools will have to react.

“When they arrive here many students from a variety of disciplines have already had several courses in management and I don’t think we in the management education business have responded to that. We need to provide more tailored solutions. I think we need to offer more opportunities to opt out, for example, particularly from the traditional core courses.”

Schools will also have to prove themselves more adept at managing the “information overload” resulting from modern technology and helping students to handle it correctly.

While Professor De Meyer says his generation was trained in an era of information shortage, going to the library and waiting for books to be returned and fighting over the latest

12 www.efmd.org/globalfocus

journals, today, he says, “young people live in a world where all information is instantly available”.

But that means they may need help. Wikipedia, for example, is a tremendous first source of information but it has to be checked and not accepted at face value.

He also wants to see business schools helping to integrate companies and the business community into wider society.

It is now wrong, he argues, to describe a company as simply a mechanism for making money for shareholders. Society is demanding more. For example, he points out that companies now effectively face a closed supply chain loop where people expect them not just to put products on the market but also to collect and dispose of them when their useful life is over.

“We [business schools] have to grow beyond just teaching what a company is and how you manage it and put these problems in the context of society, a complex integrated world where companies are an important element that cannot be isolated,” he says.

One key way of getting this message over to students, he believes, is to bring many more practitioners into the classroom, not so much as teachers but as experienced managers who can communicate the realities of business.

Professor De Meyer accepts the vital importance of the Cambridge “brand” to Judge Business School in developing the school. However, he does not subscribe to the traditional rivalry that has marked the relationship of the universities of Cambridge and Oxford for hundreds of years – at least not in terms of their respective business schools anyway.

Judge Business School has many similarities with Said Business School at Oxford and, uniquely, the two universities even share at type of cobranding through the term ‘Oxbridge’

Judge Business School, he says, has many similarities with Said Business School at Oxford and, uniquely, the two universities even share a type of co-branding through the term “Oxbridge”.

He believes this benefits both, particularly as Oxford tends to be stronger as a brand in North America, while Cambridge is stronger in Asia.

“We are in the same market as Said because we offer a very similar programme,” he says. “But while we may compete at the margin for a few students we actually benefit from each other in the world market as ‘Oxbridge’.”

The two schools already collaborate in research and the only thing that prevents more of this, he says, is the appalling transport links between them, which usually means travelling a roundabout route via London.

Still, being close to London – less than an hour by train – does mean that Professor De Meyer can easily indulge his passion for opera and ballet. And since his interest in these is well known, he does, he smiles, “get lots of invitations”.

His third, and perhaps even greater, love – skiing – is proving a bit more difficult in the notoriously flat Cambridgeshire countryside. But he has a small apartment in the French Alps and says that “if I’m really organised I can leave Cambridge at 4.30 on a Friday afternoon, be on the ski slopes early on Saturday and back here for Monday morning”.

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Diversity as an engine of Janez Potocnik, right, explains how Europe is learning to profit from its diversity

E

urope is not the largest of continents…but it is a rich continent. This is true, on average, if you measure our GDP per head, television sets per household or the number of foreign holidays taken in a year.

But quite apart from these conventional and perhaps materialistic measures of wealth, Europe is rich in its diversity.

Whether you refer to peoples, languages, cultures or experiences, variety is one of our defining characteristics. The author Milan Kundera got it right when he said that “Europe is the maximum of diversity within the minimum of space”.

The sense that our different perspectives, traditions and talents are a positive asset for the continent is reflected in the very motto of the European Union: “Unity in Diversity”. These words reflect the values that serve the deepening and widening integration of European countries: principles such as openness, equality, plurality and solidarity and ideals like tolerance and the protection of individuals and their identities. It’s the promotion of these values that helps define the EU and we must never forget this.

That is one reason we chose to name 2008 the European Year of Intercultural Dialogue: to honour our cultural diversity.

I myself had the pleasure to launch this event at the start of this year in Ljubljana, Slovenia.

The author Milan Kundera got it right when he said that ‘Europe is the maximum of diversity within the minimum of space’

Diversity as an engine of growth by Janez Potocnik

15 EFMD Global Focus | Volume 02 | Issue 03 2008

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In keeping with these values are the five freedoms we have created in our common space. And yes, I said five freedoms.

Alongside the freedom of movement of capital, goods, services and labour, we are creating a fifth freedom: the freedom of knowledge. This encapsulates the notion that ideas, technologies, innovations and knowledge-workers should be exchanged and flow and spread throughout the EU, boosting our ability to compete globally and to develop in a sustainable and equitable manner.

This concept was endorsed by the Heads of State and Government of the EU earlier this year. It is an exciting and important new development that will bear real fruits in the decades to come.

But my point is that as we enjoy and make greater use of these freedoms, we encounter more often the differences between us. As we exercise our mobility, dealing with diversity becomes a daily reality for more and more Europeans. From a business perspective, companies are dealing with increasing diversity at all levels of their operations – be it customers, business partners, employees or investors.

Due to cultural and language differences between countries and regions, operating on a European scale clearly means facing greater diversity. European companies, as they develop and expand, have not only to cope with intra-European diversity, but even more importantly – in the face of globalisation – they are confronted by it on the international scene.

Many enterprises are important players in our globalising economy with long experience of this phenomenon.

Described like this, diversity can seem to be mainly a challenge. But it takes no great imagination to realise that in fact it is a great opportunity.

On the one hand, a common culture and a common language are likely to allow individuals to interact more easily. Moreover, cultural diversity can often lead to cultural shocks and conflicts, thus creating difficulties and imposing certain costs to the economy and social cohesion.

On the other hand, skills and knowledge are often culturespecific; individuals with different cultural backgrounds have different skills, expertise and experiences. Thus, cultural diversity creates an environment where the combination of resources produces important gains that can be transferred, through innovation, into improved economic performance via two different channels.

First, economic theory stipulates that the knowledge of one individual spills over into other individuals and improves other people’s productivity. These “knowledge spillovers” contribute to innovation. I like to use the following metaphor.

If you have two people who each have one apple which they decide to exchange, then each one still ends up with only one apple. However, if each of them has one idea and they exchange them, they will both now own two ideas.

This is freedom of knowledge at work.

Second, research suggests that in a culturally diverse

With the rise of the emerging economies, the ageing of the European population and the coming shrinkage of our labour force, we would be foolish to sit still

environment people are more creative – and creativity is one of the main sources of innovation. Consequently, to the extent that diversity positively affects innovation, it can serve as an “engine of growth”. In this sense, it brings considerable benefits to the economy.

I would go further and add that we are living in a time when the exchange of knowledge and ideas is not a luxury but a necessity. And in a culturally diverse environment there is a greater variety of knowledge, so knowledge spillovers are greater. So we are indeed on fertile ground.

European enterprises are waking up to this opportunity.

In recent years they have joined in ever-larger numbers the movement to promote diversity in the work place. Many have signed up to “charters of diversity” while voluntary initiatives have sprung up in a number of EU countries.

However, we still have a long way to go. It is clear, for example, when you consider that the share of women on the corporate boards of European companies is still in single figures. It is also a fact that the proportion of women in senior management

17 EFMD Global Focus | Volume 02 | Issue 03 2008

Diversity as an engine of growth by Janez Potocnik

734m

IMAGES COURTESY: EUROPEAN COMMUNITY

The amount over a ten-year period that was contributed by the Framework Programmes for Research to over 20 research teams around Europe

positions in China and India exceeds that found in EU states such as Germany, the Netherlands and Portugal. And that is only looking at the gender issue...

With the rise of the emerging economies, the ageing of the European population and the coming shrinkage of our labour force, we would be foolish to sit still. Europe cannot afford to ignore the talents of its women, its ethnic, racial and religious minorities or those with disabilities.

I am very much concerned with how we develop our ability to succeed, confronted with the challenges and opportunities of globalisation. That means developing the role of education, research and innovation in Europe: – as drivers of growth – as enhancers of competitiveness – as means to tackle our environmental and social problems.

over ten years within the socio-economic sciences and humanities research programme. The issue of diversity, its contribution to growth and competitiveness, and issues of diversity management and management and organisational studies have been given considerable attention.

To quote some figures: over the course of the 4th to the 6th Framework Programmes over €21 million was invested in research related to different aspects of diversity. A further €13 million was allocated to projects related to management and organisational studies. Thus, over a 10-year period €34 million was contributed to over 20 research teams around Europe.

The studies conducted can be divided into two main themes: investigating diversity as a phenomenon in itself, describing its characteristics and consequences; and linking diversity with economic performance and management and organisational studies.

In pursuit of the EU’s Lisbon Strategy for Growth and Jobs, I work to establish the European Research Area. In this space the freedom of knowledge reigns and an environment is produced that stimulates knowledge-based, innovationdriven entrepreneurship.

The number of projects around the problems of diversity increased dramatically in the 6th Framework Programme, with the consequence that many are still ongoing.

Given this context, how we take the most advantage of the diversity within Europe – and the diversity that comes with the global expansion of European enterprises – is of great importance.

First, ensuring proper communication is the prerequisite of effective diversity management. With the emergence of knowledge-based societies, it is important to identify the conditions under which Europe’s linguistic and cultural diversity can be an asset rather than a drawback.

Issues of diversity and diversity management have been addressed by the Framework Programmes for Research for

Currently, the problem of diversity is looked at from a truly multidimensional perspective.

Research suggests that different modes of thought, argument

18 www.efmd.org/globalfocus

of the financial system. The projects funded will also give further important insights into cultural interactions in an international perspective, including ethnic and religious diversity.

Starting in 2009, future actions are expected to contribute further to the areas I have touched upon. In particular, we expect to fund studies to investigate new education needs in the developing knowledge society and changing labour markets.

In the area of management studies, additional opportunities will exist to delve into the area of responsible business. This time, the emphasis will be on its impact at various levels, including company performance, as well as links with innovation development.

Also interesting from the business point of view will be the exploration of changes in and action, which are linked to different for reforming managerial education to create consumption and consumer markets, including languages, have an influence in the development business leaders who can better anticipate and transmission of knowledge. Thus, they play future developments and who better understand new products and services, which take into a role in problem solving and decision making. the importance of integrating responsibility into consideration the effects of cultural diversity.

Everything I’ve highlighted is, of course, only the core of their business strategy.

Second, it is important to identify the societal, a fraction of the richness of the outputs of our political, regulatory and institutional conditions To give a final example of the recent fruits of under which diversity can be a source of research, an important phenomenon observed research programmes. Still, I hope I’ve been able to convey the importance I attach to EU competitive advantage in knowledge-intensive in recent years is the process of global value research into the notion of diversity, its implications activities. chain restructuring. and its management.

One of the most important contributions at If you restructure your value chain, as often The future development of our continent is of the EU level in the area of management and happens for operations in multiple markets, interest to us all. What matters is the building organisation studies (linked indirectly with this is usually associated with increasing diversity management) comes from research diversity. This process implies significant changes of a knowledge-based economy that grows through innovation. What’s vital is the creation on corporate social responsibility. in work organisation that have tremendous of a Union that can provide health, prosperity, implications for the use of knowledge and skills, Responsible business, in which the EU is the a sound environment and a fair society for its for organisational flexibility and for the quality world leader, should serve as a driver of the people. If we choose to use it, then our diversity promotion and transfer of common European of life of workers. It is important that enterprises experiencing such changes take into account and is our strength. values to both developed and developing So let’s take pride in our Unity in Diversity. properly adjust to the growing multiplicity that countries. goes along with them.

Another example is an in-depth analysis of Ultimately, the trick is to use this diversity for common problems in relations with the maximum benefit. stakeholders. This is of key importance in avoiding conflicts and the resulting economic Let me turn to the present and future opportunities damage in a number of industrial sectors. that will build on these discoveries.

Research suggests that constant dialogue is The current 7th Framework Programme the key to effective stakeholder management capitalises on past results at both European and FURTHER INFORMATION as it allows learning to take place about mutual national level. During the first two years, research This is an edited version of a speech given by Janez Potocnik to the EURAM 2008 conference in Ljubljana, expectations, concerns and constraints. funding has been concentrated on the important Slovenia, in May 2008

In recent years a dialogue facilitated by the European Commission has been launched between academia, businesses and stakeholders in order to better understand societal expectations towards business but also the constraints on companies.

From among the many interesting results of this exercise I’d like to pick up just one: a call

areas of knowledge development and innovation as drivers of growth in the European economy.

The selected projects will also take a look at the role of investments in intangible assets as the basis for innovation.

Additionally, developments in the service sector will be analysed plus opportunities for business development provided by the different sectors

For the full text please see http://ec.europa.eu/commission_ barroso/potocnik/news/docs/20080516_speech_diversity.pdf ABOUT THE AUTHOR

Janez Potocnik is European Commissioner for Science and Research.

He was formerly Minister Councilor in the Slovenian Prime Minister’s Cabinet 2001–2002 and Minister for European Affairs 2002–2004 and headed the negotiating team for the Accession of Slovenia to the European Union between 1998 and 2004.

19 EFMD Global Focus | Volume 02 | Issue 03 2008

20 www.efmd.org/globalfocus

If we agree that there is a need for management science to change paradigms, there must also be changes in the way we train teacher-researchers

The road ahead for European management education Eric Cornuel concludes a two-part series on management education in Europe with some thoughts on how the sector might be restructured and revitalised

The road ahead for European management education by Eric Cornuel

I

21 EFMD Global Focus | Volume 02 | Issue 03 2008

nstitutional autonomy is a fundamental issue for any management education institution positioning itself in terms of the strategic choices outlined in Part 1 (See Global Focus Volume 02 Issue 02 P24.). At a global level questions should be raised about the corpus of concepts and values conveyed in management teaching. As mentioned before, the discipline has been criticised for its standardised approach with teaching in a given discipline being delivered in a given classroom at a given time without any leeway.

could lead management science into the same blind alley as the one economics has gone down.

Professors can clearly be highly competent but may not integrate their research sufficiently into their modules.

The transmission of knowledge should not cease at the end of a class – or on graduation.

In short, management research needs less Popper and more Feyerabend. Europe must regain control.

There have been many praiseworthy efforts, particularly in Europe, to integrate more transversality, and elements of research action, into curricula. The necessary adaptations have turned out to be fundamentally deeper and more revolutionary.

Our environment has changed markedly, notably in the exponential technological progress that now allows us to analyse, choose and communicate anywhere at any time.

The iPod, iPhone, Blackberry, Skype and even Google are all enablers along these lines.

Consumers are also becoming increasingly versatile and difficult to categorise. Their values, orientations and expectations (ethical, for example) have undergone profound changes, witnessed, for example, by the latest “on-demand”, or commitment marketing models.

This is a change that affects all “suppliers”, from bakers to schools and universities. Does it mean that management teaching should line up with a new paradigm? In a new approach, the main focus would be on individualised learning based on multiple sources that could potentially be delivered anywhere and at any time.

Such a learning process would be highly interactive, coproduced by professors and learners, modular in nature and strongly oriented towards training needs.

Learning sessions of this sort would establish virtual or actual links between participants from across the world, with professors acting as coaches and facilitators, transferring their research findings, mainly in a heuristic, or self-learning, dimension, to everyone in a comprehensible manner. The transmission (and construction) of knowledge in such a scheme would be necessarily transversal and multidisciplinary.

Management research, as a tool for the exploration and creation of knowledge, will always be paramount. But forgetting that it must also be heuristic and communicable

Peter Lorange, outgoing President of Lausanne-based business school IMD (see Global Focus Volume 01 Issue 03) has detailed the need for more “minimalist” research, a variant that is more multidisciplinary and is disseminated and potentially enriched through interactions with students and participant companies.

In an article published posthumously, management academic Sumantra Goshal asked leading institutions such as The Academy of Management to create new research paths to legitimise new intellectual orientations.

Problems at this level are both quantitative and qualitative.

As made clear in Part 1, the numerical shortfall of management professors is likely to have a lasting impact on European institutions’ ability to serve their customers.

It is high time to encourage young people to enter academia.

The question of 100% funding for doctoral studies needs to be resolved once and for all, allowing successful candidates to focus fully on their studies. It is no longer acceptable for academic wages in Europe to be so uncompetitive in global terms.

With nearly 70% of the European workforce operating in the service sector, often in high value-added industries, our political, economic and social space has a great need for capable and creative managers, adaptable and sensitive to other cultures and well trained for their current and future responsibilities. If Europe does not want to be reduced to an imitative economy, it must redirect, at all levels, significant resources towards higher education in general and towards management education in particular.

If we agree that there is a need for management science to change paradigms, there must also be changes in the way we train teacher-researchers. This means a reform of doctoral programmes, which must become more multidisciplinary, interactive and closer to companies and the whole of society.

Since vocations can come along at any stage of life, a system of pathways should be set up to enable highly skilled professionals to reorient towards teaching and research. In the US, AACSB and a number of universities have already started thinking about the possible creation of “Executive PhD” programmes.

Europe has tried to blaze a trail with its Lisbon strategy (now in its second round). It is now time for it to flesh out the details of the urgent measures that need to be taken in the interest of our political, economic and social progress.Why not encourage institutional consolidation at a national and even transnational level? An initiative by France and Germany concerning the creation of European academic groups (a sort

22 www.efmd.org/globalfocus

Companies clearly have a key role to play and their ties to institutions must also be reinforced and rethought

of “academic Airbus”) was interesting since this could allow not only for the critical mass required to cope with international competitive pressures but also for the development of multicultural and European academic awareness.

The creation at a European level of something similar to the US National Science Foundation (founded as far back as 1946) would also be desirable. Such a body could be endowed with important resources and responsibility for orienting and subsidising institutions’ research efforts along with their organisational, teaching and social innovations.

Like its American counterpart – which focuses 65% of all the grants it awards to 1% of its member institutions – it could invest its resources in a limited number of institutions, who would then be required to disseminate whatever knowledge and innovations they produce. The creation of the ERC (European Research Council) goes in the right direction, but it is still not enough.

Why not immediately enlarge the European Union to 28 members?

The new participant would not be a state as such but a virtual and transnational body encompassing all of the exceptional measures and conditions aimed at bolstering teaching and research. If this is overly utopian, why not imagine a Common Education and Research Policy along the lines of the Common Agricultural Policy?

Of course, it is up to the Member States to decide these things, since education remains largely governed by the principle of subsidiarity. It is at the state level that a certain number of measures with direct or indirect institutional effects should be adopted. Direct measures would include reinvesting massively in academic institutions and training future teacher-researchers. Indirect ones would involve stimulating the funding of these same organisations via private sources enjoying tax exemptions that could be set at 100% or even more to rapidly create a virtuous circle.

Companies clearly have a key role to play and their ties to institutions must also be reinforced and rethought. Europe may already have more than its fair share of consultations but it is clear that we have a considerable need to talk about defining strategic objectives, developing shared infrastructure, and producing competencies and dialogue. What is required is better mutual understanding of timeframes, as well as an acknowledgement of the necessities of basic research and the way this must connect to the productive economy.

At a time when people at least say that corporate social (and societal) responsibility has become increasingly topical, one main priority for

businesses should be to fund their sources of future competitiveness via an educational system producing the best managers in the world.

Nothing can be done without commitment from academic institutions and communities themselves, who need to rethink deeply their different roles and contributions to society. Not paying attention to broader demands in an era of globalisation would be downright suicidal.

Companies (and organisations in the broadest sense of the term) must be much more integrated into professors’ teaching and research concerns, and not only as fields of investigation. This is a pre-requisite if we ever hope to see companies become important actors in institutional funding and governance.

Europe and its further progress must also be at the centre of institutions’ vision and communications. Along these lines, note that a 2006 EFMD survey showed that nearly half of 10,000 students in management and economics know very little about the Bologna reforms.

Last but not least, institutions, as opinion makers and centres of thinking, must also contribute to certain societal debates, with corporate social and societal responsibility clearly being a key theme for institutions of management learning and research. In this context, the initiative that EFMD launched in 2002 under the name of the Global Responsibility Initiative and which has brought together a great many academic institutions and companies under the aegis of the United Nations has played a catalyst’s role. The future creation of a foundation The Globally Responsible Leadership Foundation (GRLF), seeking to coordinate efforts in this field, attests to this project’s importance and success.

Today, management education in Europe already presents an excellent “return on investment” in all of its dimensions. Despite this, adaptations will become increasingly necessary, especially since a homogeneous European higher education system will certainly attract new competitors.

To face these challenges, our institutions must demonstrate sufficient creativity and inventiveness to evolve towards a new paradigm, one that is more in sync with the realities of today’s and tomorrow’s global competitive dynamics. To achieve this, they should be able to count on the unbridled support of institutions that are at least as interested as they are in their future success: Europe, its Member States and of course its companies.

ABOUT THE AUTHOR

Prof. Eric Cornuel is the Director General and CEO of EFMD.

23 EFMD Global Focus | Volume 02 | Issue 03 2008

LINK

The Programme for Professionals in Management Development and Organisational Development

LINK has four degrees of focus: 1 Factors in the business environment that are or will be impacting on corporate strategy 2 How organisations are or should be responding to these factors 3 The implications for executives and the learning function 4 How the learning professional can and should contribute as a change agent

LINK Cycle 7 Begins 23–26 November 2008 Registration open now: www.efmd.org/link

24 www.efmd.org/globalfocus

The world economy is not truly integrated and is unlikely to be so for decades, if ever. Pankaj Ghemawat, arch-proponent of ‘semiglobalisation’ as the real challenge for international corporate strategy, talks to George Bickerstaffe

Because the world is round it turns on * strategy Apologies to Lennon/McCartney

*

T

hough he says the ideas in it were 20 years in gestation, it is likely most people read Pankaj Ghemawat’s latest (2007) book, ‘Redefining Global Strategy: Crossing Borders in a World Where Differences Still Matter’, as a more-or-less deliberate and conscious rebuttal of the best-selling ‘The World Is Flat: A Brief History of the Twenty-First Century’ by New York Times columnist Thomas Friedman.

Professor Ghemawat, a professor of global strategy at IESE business school in Spain, in fact does not mention The World Is Flat and Mr Friedman receives only two passing references in his book. But certainly, the two approach the issue of “globalisation” from opposing perspectives.

Mr Friedman argues that since around 2000 a series of technological and social changes have levelled competitive differences between developed and emerging economies, negating the effects of national boundaries and making the world effectively a huge single market.

Globalisation of the world economy is the ineluctable future and companies will be operating effectively in a “single-country market” with no need for diversified strategies. Globalisation does indeed win but the need to be global disappears.

Professor Ghemawat argues that this analysis is simplistic, lacking in empirical data to support it (and as an economist he puts a lot of emphasis on data and has convincing and copious amounts of it to back up his case) and even potentially dangerous, feeding resistance to globalisation and fuelling protectionist tendencies.

Brought up in both India and America, he has a PhD in Business Economics from Harvard University and in 1991 was appointed the youngest-ever full professor at Harvard Business School and has been on the IESE faculty since 2006. Perhaps as a result of this cosmopolitan life, his world view is more nuanced and alert to culture and context than what is sometimes called “globalony”.

Rather than a flat world inviting a “one size fits all” approach, he argues that what we have today is “semiglobalisation”, large and distinctive differences across national and regional borders that corporate strategy has to accept and adjust to.

Semiglobalisation and its implications for business is Professor Ghemawat’s big message. In the opening chapter of his book he writes: “...the intermediate levels of cross-border integration inherent in semiglobalization are what open up, over a very broad domain, the possibility of global strategy having

Pankaj Ghemawat interview by George Bickerstaffe

25 EFMD Global Focus | Volume 02 | Issue 03 2008

Professor Pankaj Ghemawat: not ‘one size fits all’

What we have today is ‘semiglobalisation’, large and distinctive differences across national and regional borders that corporate strategy has to accept and adjust to

content distinct from single-country strategy... Semiglobalization is what enables the development of a distinctively global approach to strategy.”

Professor Ghemawat is also heavily engaged in issues concerning the globalisation of business education, including a casebook on global strategy with Jordan Siegel (to be published in 2009 by Harvard Business School Press) and broader efforts at curricular analysis and development that are summarised in his 2008 article in the Journal of Management Development, “The Globalization of Business Education”. He is also a member of an AACSB taskforce focused on this topic that will report in spring 2009. He will be speaking at the joint AACSB/EFMD conference in Barcelona in November on this issue.

26 www.efmd.org/globalfocus

Why isn’t the world flat?

To an academic the remarkable thing is that there is a huge consensus among international economists that the whole proposition that borders don’t matter is ludicrous. The problem with a Friedman-like view of the world is that an 80% - 90% level of internationalisation, which is what it implies, grossly overstates actual levels of internationalisation along a broad range of measures, which cluster much closer to 10%.

Could you describe that?

I’ve called the framework CAGE. Distances in this sense relate to four main areas: Cultural, which includes language, customs, religion; Administrative – laws, trading blocs, currency; Geographic, which includes physical distance, time zones and things like that; and Economic, which is income levels, natural resources, financial resources, human resources, infrastructure and so on.

For example, if you ask people to estimate what percentage of all the investment that happens in the world is accounted for by foreign direct investment then the answer is usually of the order of 20% to 40%. In fact the answer is about 10%.

And it’s relatively hard to reconcile that figure with a conception of a world in which the sources of capital don’t matter for where it is deployed – one would expect a much higher figure.

You have to take a broad view of these distances, work out which most affect your industry or company but also see them not just as obstacles but also as potential sources of value creation.

There are other things you can look at like people flows; first-generation immigrants are still just 3% of the world’s population, lower than they were in 1910. Or information flows; my best estimate is that less than 20% of the bytes that get transmitted over the Internet actually cross national borders.

So borders matter. But simply saying that things happen at borders doesn’t tell you why they happen or what to do.

I’ve gone through the hundreds of studies on the factors that tend to choke off cross-border activity relative to domestic activity and tried to pull them together into a framework. What I’m saying is that one really has to think about multiple kinds of “distances” that companies have to acknowledge and react to in developing their international strategies.

10% The estimated percentage of all the investment that happens in the world accounted for by foreign direct investment is usually of the order of 20% to 40%.In fact it is about 10%

It was launched on the premise that satellite television was going to obliterate geographic distance, which is true. But it got into massive problems because it forgot about the other distances.

It forgot about cultural distance – the fact that people prefer broadcasting in local languages; it forgot about administrative distance, ignoring that the Chinese government might be sensitive to a speech by Mr Murdoch declaring satellite television a threat to totalitarian regimes everywhere; and it forgot about economic distance – many of the countries targeted had no infrastructure to measure how many people were watching a TV show, which made it very hard to sell advertising.

Another example is Cemex, a Mexican cement company. Obviously languages don’t matter so much in the cement business as they do in satellite television. The big difference is that geographic distances do matter. What is interesting is that Cemex, the most successful “global” competitor – the most Professoritable, anyway – has effectively retrenched to trying to build up a geographic fortress in Central America and North America because it recognises that in its business geography is really what matters.

This is important from a business perspective because one sees so many examples of companies that get seduced by one kind of “distance” and forget completely about the others.

Is this just a snapshot of where we are now: the world isn’t flat at the moment but it may become flat?

I can’t see the world becoming flat, at least in my lifetime.

A good example is Star TV, a satellite television broadcaster bought by Rupert Murdoch’s News Corporation in the 1990s that was planning to broadcast English-language programming to most of Asia.

There are a couple of ways at looking at that. One is to point out that not all the trends are positive.

If you look at overall estimates of capital mobility they are actually lower now than they were back

Pankaj Ghemawat interview by George Bickerstaffe

27 EFMD Global Focus | Volume 02 | Issue 03 2008

The first thing that any company considering going overseas should ask itself is – why?

at the end of the 19th century when the world was on the gold standard and empires helped to promote trade and investment.

can’t articulate any reason as to why you’re going overseas beyond there’s lots of demand out there then that’s unlikely to work out well.

Second, of the things that are trending upwards, So that would be point number one – be clear about why you’re going overseas. like trade for example, it’s going to be a long time given that the world’s exports-to-GDP Point number two is to think hard about what ratio is about 27% now and was about 20% 20 kind of distances matter in your business. For years ago. Extrapolate that, which is probably Star TV it was a range of things; for Cemex it an aggressive assumption, and what do you get? was just one thing. But unless you give these You get something that is higher than it is today distances their due you are going to be biased but far short of perfect integration. towards a model that looks very much like the model at home because it works at home – and Even in the European Union you find that what could be simpler than just transplanting it? countries trade within their own boundaries between three and ten times more than they do with their EU partners – and that’s after 50 years of attempted integration.

So those data points all raise questions. If you believe that culture is going to continue to matter, if you believe that politics are going to continue to matter then it’s a little bit hard to imagine flatness in our time.

Given your analysis, what should a company that is considering entering an overseas market be thinking about?

Well the first thing that any company considering going overseas should ask itself is – why? The usual answer is we’re going overseas because there are lots of people overseas or there is a lot of demand overseas.

And third, recognising that there is a range of ways of dealing with differences is critical. Even when companies recognise differences, quite often they fall back on having just one tool in their toolkit for dealing with it, just saying “OK, we’ll decentralise these decisions to the country manager”.

That’s just one example of an adaptation strategy; there are many more levers for adaptation, in addition to which adaptation is far from the only strategy for dealing with differences.

And the third strategy is arbitrage, the notion that differences are not just a constraint to be adjusted to or overcome but can sometimes be enormous sources of value and creation in their own right.

And so part of what I’m trying to do is to get companies beyond the simple “scale-up” conception of what going global means – just doing more of the same stuff overseas that you do at home – and thinking harder about more diverse ways of creating value by crossing borders.

What is the best example of a company that has gone international successfully?

There are a handful of companies that I think are exemplars in this regard. Just to talk about very large companies I think Proctor & Gamble is a very interesting example. It doesn’t use the AAA model I was just talking about but the way they explained it to me their organisational structure is set up around three kinds of entities that basically do that. IBM and GE are also good examples; so is Toyota.

There are a few companies that seem to be doing things right.

So in my book I talk about two other broad classes of strategies for dealing with differences: But for the vast majority of companies, what’s aggregation and arbitrage. Together with surprising to me is just how much room there adaptation they make up what I call an AAA still is in terms of doing things better. strategy.

Aggregation is the notion that while things You see this very frequently right now with many are different they are not equally different and companies’ Indian or Chinese strategies. If your there may be ways of grouping things so that strategy for India or China is based on the notion within these groups you get homogeneity.

Maybe you can group countries in different that there are lots of Indians or Chinese then parts of the world differently. If countries that’s not exactly a proprietary insight. within a region are relatively similar then maybe I think there’s a tremendous amount of growth by setting up a regional headquarters you may mania still in international strategy and one of be able to tap some cross-border economies. the things I stress to companies is, OK, if you

FURTHER INFORMATION

For more information about Pankaj Ghemawat’s thinking see www.ghemawat.org

28 www.efmd.org/globalfocus

Quality improvement in corporate learning organisations Martine Plompen on a new report that emphasises the gains offered by the EFMD CLIP accreditation process for companies’ learning organisations

C

ompanies are under ever-greater pressure to manage their learning and people development process strategically. The issues they are facing include attracting and retaining the best talent, nurturing tomorrow’s leaders, aligning strategy, competencies and behaviours, and integrating the learning function into mainstream human resources processes.

EFMD’s Corporate Learning Improvement Process (CLIP) helps companies to face up to these challenges and has been designed to provide an assessment tool for corporate learning organisations. Internal self-assessment against a set of rigorous standards drawn up by leading members of the corporate learning community is combined with external review by experienced peers.

A new report, Quality Improvement in Corporate Learning Organisations, draws on the experiences, knowledge and practices from 12 CLIP reviews and offers an inside view on how to achieve the gold standard in corporate learning. The twelve companies covered in this research are: AlcatelLucent, Allianz, Crédit Suisse, Daimler Chrysler Financial Services, Deutsche Bank, Grupo Santander, ERGO, MLP, Novartis, Swiss Re, Union Fenosa and Volkswagen Coaching.

A CLIP research team with members drawn from Alcatel-Lucent, Novartis and EFMD analysed the CLIP Self-Assessment Reports and Peer Review Team Reports for each of the 12 companies. (See box page 31.). Good practices in core areas such as strategic positioning, programmes and services, external suppliers or innovation and development are illustrated by over 130 examples. The 12 companies featured also show distinctive

Quality improvement in corporrate learning organisations by Martine Plompen

29 EFMD Global Focus | Volume 02 | Issue 03 2008

strengths in sharing strong values and having motivated people who passionately enjoy their jobs.

The constantly evolving contribution of learning to business requires a corporate learning organisation that is agile and adaptive. However, it is not easy to strike a balance between learning initiatives to optimise implementation of current corporate strategy and those needed to prepare for tomorrow’s globalised and hyper-connected world. Serving the immediate needs of business units, for example, can overwhelm innovative approaches to leadership development.

It was also observed that younger learning organisations often focus on the launch of a first series of learning initiatives; however, the CLIP body of knowledge clearly indicates the importance of an institutionalised governance system for corporate learning organisations. Unified decisionmaking processes and comprehensive reporting systems are the key stepping stones.

Ideally, formal mechanisms with internal and external advisory bodies should be supported with a clear mandate from the top management of a company to strengthen the strategic positioning of the corporate learning organisation. Appropriate positioning and design, in the reality of today’s very diverse world of learning, covers a broad spectrum of approaches, depending on the overall corporate context.

12 The 12 companies featured in the ‘Quality Improvement in Corporate Learning Organisations’ report show distinctive strengths in sharing strong values and having motivated people who passionately enjoy their jobs

30 www.efmd.org/globalfocus

Not surprisingly, the CLIP report confirms that a corporate learning organisation will not achieve much without professional staff and coownership by senior and line managers in the organisation. An overall integrated approach to the company’s people management processes and human resources comes out as definite good practice; however, it does not necessarily clarify the grey areas in the boundaries of operations of a corporate learning organisation.

Those boundaries are unavoidably changing in pace with the agile and adaptive learning organisation and are affected by wider organisational issues or even turf wars.

In the 14 CLIP-accredited companies, learning is handled as an ongoing process that affects all layers of the organisation and that builds on careful design processes for the entire learning journey. However, finding ways to satisfactorily provide offerings for top executives means additional challenges for the corporate learning team.

Finally, the research team notes that programme monitoring, evaluation and review is an area requiring particular attention and further development, especially in young corporate learning organisations.

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FURTHER INFORMATION

For more information on CLIP visit www.efmd.org/clip

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ABOUT THE AUTHOR

Martine Plompen is Director, EFMD Knowledge Services Unit.

If you would like to receive a copy of this report please email shanshan.ge@efmd.org

The CLIP report confirms that a corporate learning organisation will not achieve much without professional staff and co-ownership by senior and line managers in the organisation

Quality improvement in corporrate learning organisations by Martine Plompen

The CLIP Value Proposition At the core of the CLIP value proposition for corporate learning organisations is the peer community of chief learning officers from CLIP-certified companies. The focus is on identifying key factors that determine quality in the design and functioning of corporate learning organisations. The CLIP Criteria Framework builds on five core areas: context and mission, resources, markets, process quality and context.

1 Context and mission Assessment criteria in this area are related to the design model of the corporate learning organisation, its positioning, alignment and strategy as well as its governance and its management structures.

2 Resources Resources break down into two broad categories. One is the internal training resources such as the corporate learning organisation’s core staff as well as senior management and line managers in the company. The second is the external suppliers and related issues around selection and relationship management.

3 Markets In the context of the CLIP Criteria Framework, the market of a corporate learning organisation is defined as: – participants in the learning interventions – business units and subsidiaries (the internal market) – customers and suppliers (the external market)

4 Process Quality CLIP criteria related to learning process quality include portfolio, design, content, delivery, learning transfer, coaching, monitoring and evaluation.

5 Learning Context Context covers the CLIP criteria related to innovation, physical resources and international perspective.

The CLIP Self-Assessment Report The company drafts a Self-Assessment Report, involving the broadest possible spectrum of stakeholders concerned with its Corporate Learning Organisation.

The report, ranging between 25 and 50 pages, describes the measurement of the Corporate Learning Organisation’s performance and the effectiveness of its processes and structures. The CLIP Assessment Criteria Framework provides the external yardstick for this exercise.

The CLIP Peer Review Team Report The CLIP on-site Peer Review visit lasts two or three days and the Peer Review Team is composed of four members with deep experience in the organisation and delivery of executive education within the corporate environment. After a constructive dialogue with the company, the Peer Review Team makes an overall assessment of the Corporate Learning Organisation. The Peer Review Team Report formally sets out the findings, assessment and recommendations of the team for the use of the company.

31 EFMD Global Focus | Volume 02 | Issue 03 2008

EFMD

So far 14 leading Corporate Learning Organisations from across Europe have been awarded the Corporate Learning Improvement Process Quality Label.

Alcatel-Lucent University, Alcatel-Lucent Allianz Management Institute, Allianz Group Credit Suisse Business School, Credit Suisse DaimlerChrysler Financial Services Academy Deutsche Bank Learning and Development EDF Corporate University, EDF Group El Solaruco - Group Santander Corporate Learning and Development Centre ERGO Management Akademie, ERGO Versicherungsgruppe MLP Corporate University, MLP Finanzdienstleistungen AG Novartis Corporate Learning, Novartis AG ST Corporate University, STMicroelectronics Swiss Re Leadership Academy, Swiss Re Universidad Corporativa Union Fenosa, Union Fenosa Volkswagen Coaching GmbH, Volkswagen

32 www.efmd.org/globalfocus

Bruce Jenks shows how by engaging the poor as clients, customers and producers, the private sector can succeed in the simultaneous pursuit of wealth creation and social impact

Doing business with the poor C

hina has the largest agricultural population in the world with over 900 million farmers, more than 90% of whom lack access to personal computers and the Internet.

A few years ago, Tsinghua Tongfang (THTF), a Beijing-based microelectronics company, saw an opportunity to expand into a largely untapped market while helping bridge the digital divide.

The company noted that even before adding Internet connection fees, a basic computer cost three months income for the average farmer. Those farmers who could afford a computer often did not know how to use one. Thus most of these farmers were not able to take advantage of many production-boosting technological advances.

THTF’s research showed that what farmers needed was not just a cheap computer but solutions to daily farming problems.

“We really needed to think how our computers could make their life easier [for the farmers] rather than simply trying to make them buy our computers,” says Jun Li, vice-general manager of THTF’s computer department.

So in 2005 the company teamed up with Beijing’s municipal government to develop the affordable, low-electricity “Changfeng” computer for rural users.

THTF dealt with limited educational levels by creating and pre-installing agricultural software that was intuitive to use, chosen by talking not just to future customers but also to outside

Doing business with the poor by Bruce Jenks

33 EFMD Global Focus | Volume 02 | Issue 03 2008

$2 About 2.6 billion people in the world are living on less than $2 a day

experts and developing a website for an online community of open-source coders, farmers and agricultural analysts.

In addition, THTF offered training to rural farmers via a lowcost operating system. And the new computers also included distance-learning software both for primary and middle-school education and for minority-language education. The minoritylanguage online video classes, recorded in middle schools with minority students, allow THTF’s rural customers to learn in their own language.

By finding and responding effectively to a large potential market the company expanded its market base. It is this type of tailored response that has this year helped propel THTF into the ranks of the world’s top 500 brands according to World Brand Lab. It is also the reason THTF was included in the recent United Nations Development Programme (UNDP) report, Creating Value for All: Strategies for Doing Business with the Poor.

The international community has embarked on an unprecedented effort to address the needs of the world’s poorest people by 2015 and the greatest untapped resource in this race to advance human development is the enormous potential – in the form of investment and innovation – of the private sector.

About 2.6 billion people in the world are living on less than $2 a day. They lack access to most formal markets and therefore to many opportunities. Over one billion people do not have access to safe drinking water; 1.6 million lack access to electricity; and 5.4 billion have no access to the Internet.

34 www.efmd.org/globalfocus

What the poor don’t lack is ideas and energy. They have a largely untapped potential as consumers, producers, innovators and entrepreneurs. Inclusive business models engage the poor on the demand side as clients and customers and on the supply side as employees and business owners. Greater inclusiveness spurs economic growth and sparks social change.

Creating Value for All showcases examples of simultaneous pursuit of revenues and social impact by local and international small and medium-sized companies as well as multinational corporations.

The majority of the world’s poor already operate within the private sector. All are consumers and most work and earn incomes in the private sector. And for a host of reasons, including a lack of transportation options, the poor in developing countries have less access to public-sector services. For example, 63% of health-care expenses in the world’s poorest countries are provided by private enterprises, or nearly double the OECD average.

But the private services that are offered often come at a higher cost than in wealthier areas even when the quality might be poorer. Residents of the slums of Mumbai and Lagos pay two to ten times more for water, medicines, food and credit. This poverty penalty is one of the barriers preventing the world’s poorest from lifting themselves out of poverty.

Opportunities for inclusive growth are abundant but there are certainly also challenges. Market conditions surrounding the poor and their markets can make doing business difficult, risky and expensive

Over the last decade, the UN has shifted its attention to corporate social responsibility, most notably with the launch of the Global Compact, the world’s largest voluntary corporate citizenship initiative committed to aligning business operations and strategies with ten principles of human rights, labour, the environment and anti-corruption.

Also created by the then UN Secretary-General, Kofi Annan, was the 2006 commission headed by Paul Martin, the former prime minister of Canada, and Ernesto Zedillo, Mexico’s former president, which produced the seminal report, Unleashing Entrepreneurship. That report made a powerful argument in favour of tapping the private sector to play a role in alleviating poverty. But it was only the beginning.

Creating Value for All, the first report by the Growing Inclusive Markets Initiative (GIM) of UNDP, takes up where Unleashing Entrepreneurship left off, providing not only analysis of dozens of successful case studies by authors predominantly from the developing world but also practical tools such as “heat maps” to identify market needs in a given geographical area.

The heart of Creating Value For All lies in 50 case studies that examine businesses that have successfully included the poor.

They demonstrate how opportunities were identified, constraints were overcome and innovations achieved. These snapshots of success can be seen as practical guides and inspiration.

Opportunities for inclusive growth are abundant but there are certainly also challenges. Market conditions surrounding the poor and their markets can make doing business difficult, risky and expensive. Many companies choose to ignore the poor rather than work on finding a sustainable solution that would bring them financial and other benefits.

35 EFMD Global Focus | Volume 02 | Issue 03 2008

Doing business with the poor by Bruce Jenks

Using the lessons learned from the case studies in Creating Value for All, we have identified the five main constraints on creating inclusive markets so businesses can better anticipate issues and so that all partners can work to permanently eliminate these obstacles.

They are: – limited market information – ineffective regulatory environments – inadequate physical infrastructure – missing knowledge and skills – restricted access to financial products and services Meeting these challenges takes creativity and co-operation among not only public- and private-sector actors but also donors and non-governmental organisations (NGOs).

From the 50 cases, we have identified five effective strategies for overcoming these constraints: – adapting products and processes – investing in training or infrastructure to remove constraints

63% 63% of health-care expenses in the world’s poorest countries are provided by private enterprises, or nearly double the OECD average

– leveraging the strengths of the poor to increase labour and management pools and to expand local knowledge – working with similarly minded businesses, NGOs or publicservice providers – engaging in policy dialogues with governments Inclusive markets capture a business approach whose scale and replicability offer the best promise of bridging the gap between the constraints of today and the promise of tomorrow.

One example is Celtel, a pan-African telecommunications group. Celtel began offering mobile banking in the Democratic Republic of Congo in 2003, when security in that country was still poor and the banking sector debilitated. Celpay, the service offered, uses encrypted message technology to allow customers to wire funds across the country.

Celtel now has over two million subscribers and has created thousands of jobs and trained local technicians and a sales force throughout the country. The innovative financial service it provides has allowed many formal and informal businesses that were previously hampered by an inadequate banking infrastructure to grow.

Smaller local or regional firms have much to teach us about effective methods to overcome obstacles as well as a willingness and need to engage the local population

Private-sector involvement in development has been studied for decades but the focus has primarily been on large multinational corporations. However, as the report shows, smaller local or regional firms have much to teach us about effective methods to overcome obstacles as well as a willingness and need to engage the local population.

Indeed, in countries where per capita GDP is under $500, micro-, small and medium-sized enterprises represent about 75% of all employment.

Yet the private sector cannot meet the needs of the poor nor overcome all the obstacles to doing business with the poor by itself. Creating Value for All outlines what businesses,

36 www.efmd.org/globalfocus

governments, communities, NGOs, donors and international organisations can do to help.

The situation today calls to mind the words over half a century ago of Gandhi, who said “the difference between what we do and what we are capable of doing would suffice to solve most of the world’s problems”.

UN Secretary-General Ban Ki-moon recently issued a call to action on the Millennium Development Goals, urging an international effort to accelerate progress and to make 2008 a turning point in the fight against poverty. Before the end of this year we expect over 50 countries will have launched the GIM Initiative. Ultimately, we would like to see all nations benefit from more inclusive markets. We hope that through more inclusive business models we can all do well while doing the most good.

FURTHER INFORMATION

For more information on the Growing Inclusive Markets Initiative visit www.growinginclusivemarkets.org ABOUT THE AUTHOR

Bruce Jenks is Assistant Secretary General and Director, Partnership Bureau, at the United Nations Development Programme

The difference between what we do and what we are capable of doing would suffice to solve most of the world’s problems Ghandi

37 EFMD Global Focus | Volume 02 | Issue 03 2008

GLOBAL FORUM for Responsible Management Education 4–5 DECEMBER 2008 UNITED NATIONS HEADQUARTERS, NEW YORK GLOBAL FORUM FOR RESPONSIBLE MANAGEMENT EDUCATION: • Participate in the United Nations’ first-ever global forum for leaders in responsible business education.

• Learn from academic institutions around the world about cutting-edge research and innovative practices in providing real-world learning experiences to future business leaders.

• Join the UN Principles for Responsible Management Education (PRME), a growing global platform to advance the concept of corporate responsibility and sustainability in management education everywhere.

CONFERENCE SESSIONS INCLUDE: Responsible Management: A New Frontier for 21st Century Management Education?

CEOs of leading global corporations will present their perspectives on qualifications and skills needed to succeed in the global business environment.

Meeting 21st Century Business Challenges: Global Insights on New Skills, Competencies and Attitudes A presentation and discussion of the latest research on the expectations of companies and students with regard to management education.

Business Education and the Global Agenda Heads of international organizations will offer their views on how business schools can contribute to address today’s most pressing global challenges.

PRME Implementation Sessions: In six break-out sessions chaired by high-level representatives of the PRME’s co-convening institutions, participants will discuss the main findings of the PRME Working Groups on: • PRME: How to get started • Making progress in curriculum change • New challenges and perspectives in management research • Perspectives on new learning methodologies • How to report on progress in the PRME initiative • Business Schools as a space for dialogue and partnerships

TO REGISTER FOR THE GLOBAL FORUM, PLEASE VISIT: WWW.UNPRME.ORG/GLOBAL-FORUM

080910_UN_Conference_AD_02_pq.indd 1

10.09.2008 10:12:57 Uhr

38 www.efmd.org/globalfocus

Joining forces to promote quality and performance Ron Sibert describes how growing collaboration between EFMD and GMAC is providing new insights into the global graduate management education market

A

s two organisations dedicated to advancing quality in graduate management education, the Graduate Management Admission Council (GMAC) and the European Foundation for Management Development (EFMD) have recently joined forces to offer enhanced research and information-related services to EFMD member schools and to provide global market insights to schools and organisations worldwide.

The relationship between GMAC and EFMD has evolved over recent years. While GMAC initially sponsored EFMD conferences and activities, we have now developed a truly collaborative relationship that is of mutual benefit to both organisations and to the field of graduate management education.

The idea of working together to meet the market intelligence needs of business schools and employers grew from GMAC and EFMD’s shared commitment to better inform their respective members and the international graduate management education community at large. Our first discussions, held in June 2007 at EFMD headquarters, led to an agreement to collaborate on research of real use to schools.

One key element of the new joint project was a comparison of European and American employers’ perceptions of their MBA (and MSc) recruits. Although we all agreed that this effort had the potential to provide powerful insights about opportunities for school/employer collaboration and competitive market positioning, we also acknowledged that the path ahead would be daunting.

In fact, we faced some challenging unknowns. How could we orchestrate a project of sufficient scope and scale across continents – or secure and collect data from representative groups of programmes and employers? Could the information be delivered promptly enough to be relevant and useful, given the dynamic nature of today’s marketplace? If so, what channels or venues might facilitate delivery?

To respond to these and other challenges, an international task force of representatives from GMAC, EFMD and the MBA Career Services Council (MBACSC) met at GMAC headquarters in America in November 2007.

Joining forces to promote quality and performance by Ron Sibert

39 EFMD Global Focus | Volume 02 | Issue 03 2008

GMAC and EFMD have now developed a truly collaborative relationship that is of mutual benefit to both organisations and to the field of graduate management education

50

72%

EU

70%

40

40 www.efmd.org/globalfocus

68%

30

66%

20 Chart 1 (top): Job levels for MBA 10 Chart 2 (bottom): 0 Job levels for MSc.

64% Chart 3:

Entry level

Regional GME ‘Pipeline” growth – % change in the number of 20–29yr olds from 2005

62% 60% Mid level

Senior level

60

90 50 80 40 70 60 30 50 20 40 10 30 20 0 10 0 90 80 70 60 50 40 30 20 10 0

66.3%

76% US

74%

EU

72% 70%

75%

TY 2000 TY 2001

20 15

68%

10

66%

5

64%

0

62%

-5

+5 million 66.3%

2005

2010

60% -10 Entry level

Mid level

TY 2000 TY 2001

Senior level 20

Entry level

Mid level

15

Senior level

10 5 0 -5

TY 2002 TY 2003 TY 2004 TY 2005 TY 2006 TY 2007

2015

2020

+9 million +54 million

2025

TY 2002 TY 2003 TY 2004 TY 2005 TY 2006 TY 2007

-15 -20 +5 million

-25 -30

+54 million North America

2005

-26 million

+9 million

2010

Latin America

2015

2020

Asia

Europe

2025

-10 -15 -20 Entry level

Mid level

Senior level

-26 million

-25

The group determined a model for research design that would utilise -30 an augmented GMAC survey research instrument while increasing the participation of business schools outside America. Participating organisations would enable the augmentation by contributing survey items designed to probe issues of interest to their respective constituents.

EFMD and MBACSC agreed to promote participation in the survey directly to their constituencies – an effort that achieved unprecedented results. We saw a significant increase in the representation of schools and employers from Europe and other world regions compared to prior rounds of GMAC survey research.

This in turn enabled the team to generate improved insights about the state of European graduate management education in terms of student and employer demand as well as comparative global positioning of participating schools. The findings were later combined with GMAC research on the study-destination preferences of prospective students from various world regions and with data about world demographics (population-growth projections).

The team was then well positioned to deliver a compelling overview of the graduate management education landscape today and tomorrow.

The goal had been nearly achieved.

The first to preview the fruits of this alliance was a diverse delegation of schools from Europe, Asia-Pacific, Latin America and North America – attendees at EFMD’s April 2008 MBA conference in Milan, Italy.

Findings from the joint research project—an expanded version of the GMAC Corporate Recruiters Survey with inputs from both EFMD and MBACSC—were showcased prior to publication.

The conference, hosted by SDA Bocconi, an EFMD and GMAC member school, took as its theme Mining the Value Proposition: the Employability of the MBA. When task force representatives from GMAC and EFMD presented the project findings, the related sessions were, by all accounts, a resounding success. The team had delivered.

Research findings North America Latin America Asia Europe While it would be difficult to capture in this brief account all of the insights the project and related sessions have yielded, a small sampling is provided here for illustrative purposes.

For example, differences in hiring behaviour between American and European Union (EU) employers of MBA versus MSc graduates surfaced early as issues of common interest. Charts 1 and 2 suggest a greater demand in both regions for MBA graduates at the middle management-level than for MSc graduates, who had higher demand scores at the entry level.

On the other hand, findings also suggest a significantly greater affinity among American employers for MSc graduates at the middlemanagement level than in the EU, which may be explained by higher levels of work experience among MSc grads in America compared with Europe.

Corporate Recruiter Survey findings were combined with other GMAC research and market intelligence to round out the project and provide an even broader view of the market. Combining, for example, information about population and demographic shifts with GMAT trend data (which suggest a growing preference among graduate business students to pursue studies outside their countries of origin) paints a picture of both challenge and opportunity for management programmes worldwide.(See Charts 3 and 4) Chart 4: Pipeline of 2015 – % change in the number of 20–29yr olds from 2005 Low growth (0–5%) Medium growth (6–15%)

Germany China

World

Britain

America

High growth (15%+) Singapore India

Low decline (0–5%) Medium decline (6–15%)

France Japan

Italy

High decline (15%+) S.Korea Greece

Source GMAC Data©

41 EFMD Global Focus | Volume 02 | Issue 03 2008

Joining forces to promote quality and performance by Ron Sibert

Chart 5: Global talent destinations % of GMAT scores sent to US Schools by non-US citizens TY 200 to TY2007

76% US

74%

EU

72%

75%

70% 68%

66.3%

66% 64% 62% 60%

TY 2000 TY 2001

TY 2002 TY 2003 TY 2004 TY 2005 TY 2006 TY 2007

20 15

+5 million

10

+9 million

5

+54 million

0 -5

2005

2010

2015

2020

2025

-10

As target student populations fluctuate over time, business schools in -15 countries experiencing declines in native student population will look -20 -26 million increasingly beyond their borders to fill their classrooms. Concurrent -25 shifts in recruitment behaviour and public policy (such as recent visa-30 policy changes in Britain and financial incentives attracting non-domestic North America Latin America Asia Europe schools to Singapore) are also likely to be observed.

Student mobility or tendency to study outside their countries of origin – and the growing popularity of non-American schools as preferred graduate-study destinations (see Chart 5) – further sets the stage for a newly emerging competitive dynamic.

Future collaborations Now, and in coming years, the field of graduate management education faces myriad changes – new or emerging markets, new partnerships, new sources of applicants, new competition for students and faculty, and shifting expectations on the part of students and recruiters.

GMAC and EFMD have joined forces to keep the management school community and its stakeholders aware of critical trends and shifts that have an impact on programme quality and performance.

In June 2008, EFMD and GMAC entered into a formal agreement to establish an alliance that promises to grow in ways that will inform and benefit management education policies and programmes worldwide.

For example, in the near term EFMD and GMAC will jointly survey our member schools about their information needs through focus groups and other means. This will inform our subsequent joint research and allow us to provide our schools with increasingly refined and sophisticated insights about management education issues of most importance to them.

We will also work together to develop and promote additional joint surveys to capture market intelligence in world regions such as Asia and Eastern Europe, about which our (and therefore our schools’) information is currently sparse.

The Corporate Recruiters Survey was translated into Russian last year

Our shared goal is to establish or maintain higher education policies and practices that preserve quality in graduate management education and promoted with the assistance of EFMD. Our combined efforts boosted representation of Russian institutions in our research, which broadened our understanding and the quality of market intelligence we provide to our schools. A similar project is under way to translate surveys into Mandarin for research in China, where EFMD already has an established presence and stands prepared to assist.

In all cases, we plan to publish our findings both jointly and independently (with appropriate permissions and attributions) according to the needs of our respective constituencies.

In addition, EFMD and GMAC will continue to collaborate in the public policy arena through organisations such as EQUAL (The European Quality Link) and PRME (Principles of Responsible Management Education, established under the United Nations Global Compact).

Our shared goal is to establish or maintain higher education policies and practices that preserve quality in graduate management education and ensure its continued viability worldwide.

As we work together to advance our ambitious agenda, EFMD and GMAC look forward to a long and productive relationship.

ABOUT THE AUTHOR

Ronald I Sibert, MBA, PhD, is Director, Strategic Alliances, Graduate Management Admission Council.

FURTHER INFORMATION

The next edition of the joint survey will take place from November and we invite all members of EFMD to participate. Please contact christophe.terrasse@efmd.org for further details

42 www.efmd.org/globalfocus

EQUIS and the future of Chinese business schools

This summer Antai College of Economics and Management, Shanghai, China, gained EQUIS accreditation. Dean Wang Fanghua assesses the implications for the school.

Interview by George Bickerstaffe

P

rofessor Wang, what does what does gaining EQUIS accreditation mean for your school?

First, gaining accreditation from an international body such as EFMD is part of Antai School’s international strategy. Just as China has become more open and more involved in global issues, it is the same for Chinese business schools; we have to be more involved in these processes.

In the future China could be the world’s biggest market for business education in terms of students. So as a Chinese business school we have to consider very seriously how we develop that young talent.

Compared with China’s long history, business education is still quite young and as a school we are also young and have grown very rapidly and have developed educational programmes ranging from undergraduate to masters, PhD, MBA and Executive MBA. With this rapid development we think it’s very important for us to implement best international practice and incorporate it into our programmes. That’s why we started the EFMD accreditation process two years ago and we are very happy to have gained accreditation; we think it is a very big step for us and will help us to move forward.

We are the third school in mainland China to be accredited and I think more and more Chinese schools will join the accreditation process.

When we started the accreditation process I told our faculty that the process was much more important than the result. We are very pleased with this final positive result but more important still is the process

because we have adjusted our management systems and standardised our programmes with the EQUIS process.

What did you learn from the accreditation process?

Actually there were a lot of similarities between international standards and our local practices, although there were some problems when you transferred local perspectives to the international stage. For example, EQUIS emphasises the international relations of a school, which means that you have take a very broad view of the wider world, though in the past we have tended to concentrate on the local market.

In the past we followed the standard set down by the Chinese Ministry of Education but now we have to have our own mission and vision and adjust our governance of the school accordingly, which has meant a lot of extra work for the faculty. But if you decide you are going somewhere, then it is better to go. But it has totally changed the way the institution operates.

How do you think the business education market in China will develop? Will business schools change?

I have to point out that the development of business education in China is very rapid. The first priority remains teaching the basics and second is developing students to meet international challenges.

For example, more and more multinational companies are coming to China and need young managers to work for them and, by contrast, Chinese companies are increasingly becoming international and they also need managers – and even if they are not international organisations they

43 EFMD Global Focus | Volume 02 | Issue 03 2008

Professor Wang Fanghua interview by George Bickerstaffe

Antai The Antai College of Economics and Management was founded in 1918 with its origins in Nan Yang Business Institute, itself founded in 1903, and is one of the oldest business schools in China.

The college consists of around 30 academic institutes, covering business administration, economics and finance, management science, accounting, human resource management and other disciplines.

Professor Wang Fanghua: Chinese business schools becoming involved in global issues

4,800

The number of students currently at the Antai College of Economics and Management

have relations with international companies and also need internationally minded managers.

We are located in Shanghai, a truly international city, so that gives us the opportunity to realise how important internationalism really is.

Are companies in China looking for different kinds of recruits, say MBA students, from companies in the West?

When we were doing the accreditation we recognised that EFMD not only emphasised internationalism but also put a lot of emphasis on contributions from the school community, which meant that we really had to link the school into society and the market. So we really tried to provide an international perspective linked to local content so there is a real mix of internationalism and localism.

A lot of European and American schools are very active in China but often it doesn’t work very well because they still lack an understanding of the local culture.

Is there a specific Chinese way of doing business that could be exported to the world or the world could learn from?

This is my personal dream. All business schools teach marketing, for example, but in a Chinese case instead of the Four Ps we talk about “Fire”, “Water” and so on – a sort of traditional Chinese approach. In my own view traditional Chinese theory is deeper in its psychological and philosophical view.

Faculty includes 51 professors and 74 associate professors.

Currently there are 1,536 undergraduate students, 597 master students, 341 PhD students, nearly 40 post-doctoral candidates, 1,300 MBA students, 780 EMBA students and 200 overseas students.

The college has strong relationships with other business schools around the world and dozens of exchange students are sent abroad each year and scores of foreign teachers are involved in on-campus teaching. The college also runs an MBA programme in Singapore.

Antai College of Economics and Management is based on Fahua Campus, Shanghai Jiao Tong University, in Xujiahua area in the west of Shanghai. It has over over 40 multi-media classrooms and a library with a collection of over 40,000 books and 2,200 Chinese and international periodicals.

The college has twice been awarded the first prize in “Overall Evaluation of Education Quality in Management Science for Institutions of Higher Education” and its programmes are highly ranked in national and international league tables. Recently the college has undertaken a series of consulting projects for government and businesses.

The quantity of research papers published domestically and internationally in leading journals is growing steadily.

44 www.efmd.org/globalfocus

The idea that ‘right’ and ‘wrong’ could be determined by consensus and that that consensus could vary from social group to social group (culture to culture, nation to nation) was, at the time, a novel one for me

Self-interest, cultural relativism and ethics in the global marketplace David Lamond argues that ‘responsibility’ for ethical behaviour cannot simply be attached to a legal entity.

Ultimately it must belong to individuals

Self-interest, cultural relativism and ethics in the global marketplace by David Lamond

45 EFMD Global Focus | Volume 02 | Issue 03 2008

I

first became interested in the subject of what constitutes ethics, and what constitutes ethical behaviour in different places, as an undergraduate psychology student investigating Lawrence Kohlberg’s theory of moral development. It was here I was introduced to the concept of “cultural relativism” in the guise of Prof Kohlberg’s (1981, 1984) “social contract”.

The idea that “right” and “wrong” could be determined by consensus and that that consensus could vary from social group to social group (culture to culture, nation to nation) was, at the time, a novel one for me.

In any event, Professor Kohlberg’s theory and its relevance for managerial behaviour is the starting point, the touchstone if you will, for much of what follows.

Professor Kohlberg was heavily influenced by Jean Piaget’s (a child psychologist) model of cognitive development and proposed six stages of moral development, through which, he argued, every person passes.

These stages are grouped into three levels: pre-conventional (obedience and punishment orientation; self-interest orientation), conventional (conformity; authority orientation), and post-conventional (social contract; universal ethical principles).

Moral reasoning at level one judges the morality of an action by its consequences for the actor (“it’s wrong if I get punished”, or “it’s right if it suits my interests”).

At the conventional level, morality is a function of accordance with the views of society, its laws and conventions (“it’s right (or wrong) because others in authority (or the rules) say so”).

Post-conventional, or principled, reasoning reflects the notion that society’s laws and conventions are derived by agreement and, further, that the morality of those laws is determined by the extent to which they are just.

It is beyond the scope of this article to explore the full details of Professor Kohlberg’s model. Rather, my interest here is in the latter, post-conventional, level of moral reasoning and its relevance for business and management.

That being said, given the corporate scandals of recent years – Enron, WorldCom, Tyco and others – we don’t have to look too far for the firms whose managers would appear to have been operating at the pre-conventional level.

A decade later, now as a management academic in front of one of my first human resource management classes on equal employment opportunity (EEO) and affirmative action, I was confronted by a number of students, mostly practising managers, who certainly appeared to have taken to heart Milton Friedman’s view that the only social responsibility of firms is to maximise profits without fraud or deception. By extension, everything else was up for grabs.

I was particularly startled by the students’ negative response to the concepts of EEO and affirmative action as I presented them because, naive as I was at the time, I had started from the proposition that the benefits

46 www.efmd.org/globalfocus

Many practising managers appeared to have taken to heart Milton Friedman’s view that the only social responsibility of firms is to maximise profits without fraud or deception. By extension, everything else was up for grabs

of EEO and affirmative action were self-evident – selecting the best people for the job, and removing the barriers that would prevent the best people getting those jobs, maximised the firm’s performance and, in turn, its profits.

Indeed, I was impressed by the elegance of the argument since it satisfied Professor Friedman’s admonition and, especially for an Australian audience that was all for a “fair go”, it was also “the right thing to do”.

From these students’/practising managers’ perspective, however, the “best” people did not, apparently by definition, include women, older employees or people whose first language was not English. The “reasoning” underlying these claims was constituted by the usual dissembling about family responsibility, age and communication-induced efficiency reductions.

The way of thinking displayed by these students seems to reflect, in turn, a “macho” tradition that extends into management and the company boardroom, and is an essential element of the executive culture for which Australia is well known, a culture of physical and emotional toughness and self-reliance sometimes referred to as a form of “heroic masculinity”.

I have explored the impact of the exclusion of the “voices” of women, of Australia’s Aboriginal and Torres Strait Islander people and of people from a non-English speaking background, on managerial leadership styles in Australia elsewhere. Suffice it to say that the impact of culture on ideas of justice as they relate to inclusivity and exclusivity is relevant to the discussion here.

By any measure, there has been a significant continuing and increasing interest in “corporate social responsibility”. Recent Google searches on “corporate social responsibility” and related terms reveal over nine million hits on a combination of “corporate social responsibility”, “corporate responsibility” and “corporate citizenship” (the equivalent hits on Google Scholar total nearly 70,000). Worthy of note is that these considerations are subsumed in the broader search of “social responsibility” (nearly 12 million hits on Google and 190,000 hits on Google Scholar) and, more broadly, “responsibility” (250 million and more than 4.6 million respectively), since the very notion of corporate social responsibility implies the attachment of “responsibility” to someone or something.

It is very tempting to simply accept the allocation of responsibility to the anthropomorphised legal person of the corporate entity or to the organisation but the irreducible level of attachment of responsibility is, surely, the individuals who constitute the social group of the organisation, whether it is a corporate entity, a not-for-profit organisation or a government agency.

A recent comment by Chris Davis, a British Member of the European Parliament (MEP), regarding problems of financial transparency within the European Parliament is instructive.

“The financial rules in the European Parliament are complicated and even seem

12 million The number of searches for ‘social responsibility’ on Google and 190,000 hits on Google Scholar

Self-interest, cultural relativism and ethics in the global marketplace by David Lamond

47 EFMD Global Focus | Volume 02 | Issue 03 2008

designed to discourage ethical behaviour,” he said. “But you would expect British MEPs to know right from wrong.”

Without totally deconstructing Mr Davis’ statement, responsibility here is clearly attached to the person rather than the institution or its rules – principled behaviour, rather than rule following or adherence to codes of conduct, is what is expected. Is it unreasonable to expect the same of the senior executives of corporate entities?

Much has been written about corporate social responsibility. But despite the best efforts in those writings, we are still without either a dominant paradigm or a supportive body of coherent empirical findings.

I wonder if it is for the very reason that, because we try to attach social responsibilities to the corporate entities and the legal persons they embody, rather than to the human persons that constitute the organisations they represent, that this is the case?

The ideas of Professor Kohlberg and others appear to offer useful signposts on the road to a more suitable ethical theory. Again, at the risk of labouring the point, if it is principled behaviour that is generally expected of citizens in civil societies, is it unreasonable to expect the same of the members of governments and administrations that provide the legal and policy frameworks for those societies or for the members of the corporate entities who transact their commerce within and between those societies?

Principled behaviour, rather than rule following or adherence to codes of conduct, is what is expected.

Is it unreasonable to expect the same of the senior executives of corporate entities?

ABOUT THE AUTHOR

Professor David Lamond has recently taken up the position of Associate Dean, Nottingham Business School, at Nottingham Trent University. He earned his PhD in managerial psychology at Macquarie University. His research addresses topics including the history of management thought, personality and managerial style, organisational culture and job satisfaction. He is Editor of the Journal of Management History.

48 www.efmd.org/globalfocus

The best of both worlds Exploiting the power of experiential learning in the Swiss Re business context

Antoine Kissenpfennig and Jonathan Lagoe describe how a close partnership between a client organisation and a management development provider can lead to powerful results in leadership training

I

n 2003 the Swiss Re Academy launched a project to improve leadership development at parent group Swiss Reinsurance Company (Swiss Re), a leading reinsurance firm, following organisational analysis that had identified a need to develop the personal leadership behaviour of the group’s leaders to enable the achievement of business objectives.

organisational leadership responsibilities. We also knew that most of them had gone through several leadership development initiatives in the past.

Guiding principles Given this demanding audience, we were guided by the following three principles as we looked at our potential approaches and methodologies:

The resulting development programme –Transforming Leadership at Swiss Re Establish the business context for leadership development (TLS) – was, and still is, a large initiative targeted at developing the interpersonal If we expected leaders to examine and develop their personal behaviours, we had to ensure that they could make the link between the needs of the leadership skills of the top 300 people in the organisation worldwide.

Swiss Re business and the consequences of their leadership behaviour.

After an extensive selection process, Impact International, an international leadership development company, was chosen to partner Swiss Re Academy Swiss Re business context combined with experiential learning We were committed to experiential learning approaches based on a model of in designing and delivering TLS. As work commenced in early 2004, challenge, feedback and support as the most powerful tool for leadership and both organisations shared their experiences and expectations, skills and behaviour development. However, to get buy-in from our some common themes and challenges were soon identified. participants, this had to take place in the Swiss Re business context.

A challenging audience Conventional training games and exercises, theatre, generic case studies Attendance at the CEO-sponsored programme was mandatory; so the or simulations were not an option. stakes were high and it was essential to create something that would engage Sustainable business application the participants from the start and result in a positive “word of mouth” It was crucial for the success of the initiative that participants were able reputation. to apply learning and insight back to the business and to be perceived We knew that the participants would rightly be demanding and look as doing so. for immediate value from the time they committed to the programme. We knew that their intellectual capability was very high – Swiss Re executives In a series of design workshops over a four-month period, we came up are often world experts on technical subjects and have significant with an interactive, challenging and innovative five-day programme. During

The best of both worlds by Antoine Kissenpfennig and Jonathan Lagoe

49 EFMD Global Focus | Volume 02 | Issue 03 2008

300 TLS at Swiss Re is a large initiative targeted at developing the interpersonal leadership skills of the top 300 people in the organisation worldwide the programme approximately 24 participants worked together n facilitated groups of six. The programme was preceded by a workshop on strategy (“Creating breakthrough strategies”) and one-to-one coaching discussions; both of which further enhance the business context.

What should we (as senior leaders) do more /less of in your eyes?”).

The TLS Programme elements The five main programme elements are in line with the guiding principles:

Back in the seminar room the results from the various interviews are prepared for discussion with the CEO, who joins a two-hour open dialogue session on leadership.

Leadership inquiry (Establish the business context) The leadership inquiry takes place in three stages. The first consists of an intensive discussion with colleagues and peers on crucial principles and challenges based on key questions about leadership at Swiss Re (For example, “What are Swiss Re’s current and future leadership challenges?;

At stage two, participants go to the head office to meet 60 people (and talk on the phone to other global offices) who are working at shop-floor level to get a view on exactly the same questions; a “bottom-up” perception of the leadership culture at Swiss Re.

This leadership inquiry process generates a huge amount of insight and a real sense of ownership for leadership. It creates a platform for individual leaders to think about and develop their own personal leadership proposition, in line with the direction and needs of Swiss Re.

50 www.efmd.org/globalfocus

Personal leadership case studies (Establish the business context) Working in small peer groups, participants discuss a current personal leadership challenge that is problematic for them. With the aid of peer coaching and their team facilitator/coach, individuals explore their responses to these challenges, the implications for their personal view of leadership, and possible solutions and strategies.

Experiential challenge I (Business context combined with experiential learning) We recognised that senior leaders were rarely able to get direct and unbiased feedback and that we needed a vehicle through which they could be exposed to the views of people who were not dependent on them professionally. In this case we used external business and psychology students from a number of top Swiss universities, who never had, and (probably) never would, work for these managers.

The vehicle we used is an assignment that requires senior leaders to demonstrate leadership and engage the students. Six leaders are put together with six students and together they have to produce a short video on “What should future leaders learn?”

At the end of the assignment, the students provide feedback on their experience in a facilitated session and have an open exchange with each individual leader about what they appreciated or missed while they were led by them.

This methodology is very powerful and the students do not hesitate to give their honest opinions and provide profound and accurate feedback after a relatively short exercise.

Experiential challenge II – Swiss Re-specific leadership simulation (Business context combined with experiential learning) The second experiential challenge is the backbone of the programme, and runs for more than 24 consecutive hours. It is entirely based on Swiss Re’s strategic priorities – situations that actually could and do take place – and is completely different from the conventional simulations in which participants play assigned roles in running a generic business. As the emphasis of the programme is on personal leadership behaviour, the simulation is designed to provide the absolute maximum of opportunity for individuals to practise leadership. We call this “a machine for generating leadership action”.

We conducted many interviews with internal stakeholders to identify the leadership dilemmas that managing directors at Swiss Re face in their daily work.

It was finally decided to use the Chinese market as the focus of the simulation.

Participants are briefed that the Chinese government is reviewing all licences to practise reinsurance in China – including that of Swiss Re. The Chinese have announced that they want to visit all companies to assess not only the expected issues such as financial security, understanding of the market and so on but also the quality of the senior leadership, knowing that this will be a decisive factor for the future.

As the simulation unfolds the participants are exposed to a wide range of internal and external stakeholders affected by, or responding to, the actions and decisions of the participants in real-time. Participants work largely in four groups with very distinct tasks, although the overall team objective is a joint one: to convince the Chinese officials in a formal face-to-face meeting that Swiss Re’s leaders understand the challenges the Chinese market represents and are able to demonstrate leadership.

To make the simulation as real as possible, a chairman played by a former CEO allocates various tasks to the participants, checks progress and receives updates.

Numerous other stakeholders, played by actors and consultants, are also part of the simulation: a TV journalist, representatives from NGOs, key clients, competitors and even a Buddhist monk.

The tasks presented and the stakeholders create the kind of urgency and pressure that requires not only an in-depth analysis of the situation but also some spontaneous and improvised reactions, at times even emotional ones. We believe that leadership is not always something you can plan well in advance and many day-to-day leadership decisions need to be made on the spot.

The best of both worlds by Antoine Kissenpfennig and Jonathan Lagoe

51 EFMD Global Focus | Volume 02 | Issue 03 2008

Powerful learning and taking ownership for performance (Sustainable business application) Participants derive much from the programme experiences that helps them in their daily life as leaders. They recognise that there are no simple leadership recipes and that leadership is highly contextual and situational. Our aim is that they are exposed to and reflect on day-to-day leadership dilemmas and paradoxes in a highly ambiguous environment, where politics and power are part of the game.

Feedback to individuals is a central element of the programme and there are a number of complementary mechanisms for participants to be observed in action and to retrieve rich and diverse personal data.

IMAGES COURTESY: SWISS RE

Each participant has a dedicated coach who constantly provides a sounding board, observational data and tips to individuals. In addition, a team of specialists in behavioural analysis constantly observes and recordes individual verbal behaviours in a systematic and objective way. At the end of the simulation, this data is combined with the feedback participants receive from peers and their coach.

The TLS Programme allows individuals to build a strong picture of how they are perceived and how they can use behaviours to increase their range of options to deal with different and challenging leadership contexts and situations.

Collectively, participants identify and agree on key Swiss Re leadership challenges and the leadership culture that will be necessary to meet these. Follow-up one-toone coaching discussions track individual progress and provide further challenge and support.

The “Taking Ownership for Performance” (TOP) programme, for example, is a follow-up three-day module in which participants synthesise and cement their learning from the Creating Breakthrough Strategies and TLS programmes and apply this to current Swiss Re business challenges.

Together with the CEO, participants identify and do research on a strategic challenge and use the workshop to find solutions and recommendations for implementation.

Conclusions The programme has now been successfully delivered to nearly 300 participants and additional dates are scheduled to cope with additional demand.

A number of key themes have emerged from the project: – The importance of establishing guiding principles for a joint design and delivery process – The value of a close partnership between the business and the management development provider in which trust and respect are established – How such partnerships can be leveraged to design and deliver a programme that allows for the best from the worlds of business and experiential learning to be combined.

We believe that leadership is not always something you can plan well in advance and many day-to-day leadership decisions need to be made on the spot

This article is an edited version of the case that won the EFMD 2008 Excellence in Practice Award which was presented at the EFMD Annual Conference, Oslo, Norway, June 2008.

ABOUT THE AUTHORS

Antoine Kissenpfennig is Director, Communications & HR – Swiss Re www.swissre.com Jonathan Lagoe is Senior Consultant – Impact International www.impactinternational.com

52 www.efmd.org/globalfocus

What does it take to be a business school dean?

Nearly a quarter of British business schools have changed or are changing their deans. Julie Davies reports on research by the Association of Business Schools that shows what deans themselves think is needed for the job

What does it take to be a business school dean? by Julie Davies

53 EFMD Global Focus | Volume 02 | Issue 03 2008

15%

The proportion of women business school deans has increased to around 15%. Women represent 14% of heads of British universities

M

uch has been written about the world-wide shortage of business school faculty and doctoral students. But at the beginning of 2008 the spotlight in Britain focused instead on a potential shortage of business school deans – almost 25% of deanships were becoming available.

This unprecedented turnover could be explained by several factors: retirements, lateral moves to other UK business schools, Research Assessment Exercise fatigue, the creation of “super deans” of faculties of business and law (that also include a dean of business and a dean of law), as well as opportunities to be promoted to Pro-Vice-Chancellor/Deputy Vice-Chancellor positions, that is, somewhere between dean and the head of the university.

Would the London trend to appoint business practitioners from outside as deans – at Cass, London Business School and London South Bank University, for example – become the norm?

What followed, ironically, during the first year of the credit crunch, was a flurry of executive search agency recruitment campaigns trawling the globe for talented individuals, often touting impossibly demanding job descriptions.

Well, yes, Professor Frank Horwitz from South Africa has been recruited at Cranfield but this appointment from overseas is an exception. The reality has been that the vast majority of British business schools have kept faith with their own home-grown talent or appointed experienced deans and associate deans/professors from other British business schools.

Meanwhile, internal acting deans were holding the fort at other business schools. It is reassuring that most vacancies for business school deans have now been filled. The percentage of women deans has increased, albeit only to around 15% (14% of heads of British universities are women).

Before this surge in turnover of deans, the Association of Business Schools (ABS) was already exploring with its membership the changing nature of the role of a business school dean .

With the Advanced Institute of Management Research, ABS asked 40% of UK deans at the ABS 2007 conference about their views. The main objectives of the survey were: – To explore the challenges business school leaders face – To examine the roles business school deans perceive they perform – To gain insights into the qualities of successful business school deans and how these might change We asked small groups of deans and others working in business schools just what it takes to be a successful dean.

They were asked to generate metaphors to represent their roles, to list the challenges before them and to develop a consensus about how these perceptions and issues impact on their lives.

Although the discussions were light-hearted and relaxed, several responses to the research questions generated a clearer understanding of their perceptions, priorities and predicaments. Perhaps the most controversial findings were the range of metaphors deans applied to themselves and to their counterparts to convey the nature of the job.

Their answers highlighted four categories with various accompanying metaphors (See Figure 1, overleaf): Some deans viewed their roles as shapers but many saw their time being used to respond to events. They also emphasised the imperative of being politically astute and simultaneously juggling many tasks. This raises the question whether one individual leader can be expected to fulfil all these activities and implies a need for distributed leadership.

54 www.efmd.org/globalfocus

When asked what personal qualities a business school dean should possess currently and in the future, the deans consistently chose the following six characteristics for now and for five years hence from a list of 45 suggested attributes: – – – – – –

Strategic leadership Communication skills Leading change Political skills Ability to develop relationships Focus External networking

Sustainability and competitiveness

Diversification

Leader

Diplomat

Juggler

Fixer

(Strategist) Director Entrepreneur Orchestra conductor

(Negotiator) Networker Broker Politician

(Manager) Plate spinner Illusionist Tight rope walker

(Bureaucrat) Engineer Worker bee Swiss army knife

Further investigation of the data revealed the deans anticipated that over the next five years they would regard trust, collegiality, academic credibility and selfawareness as less important and they expected to concentrate instead on performance Identity, image and reputation and results.

What does this suggest? Does it mean that expectations of the deanship by others are changing or that as a dean occupies the role longer, his or her qualities alter? For instance, over time do deans focus more on the external business community once Physical and they have gained the trust of their internal academic financial resourcescolleagues and delegated more operational responsibilities? A longitudinal study of new deans and multi-level perspectives might elucidate this confusion.

Sustainability and competitiveness

Figure 1:Focus Metaphors for what it means to be a dean

L

Diversification

(St D Entr Or co

Identity, image and reputation

It is interesting that the deans surveyed did not rate leadership training, being a Defining the offer – Managing stakeholders Business Schools strategic positioning – internal andcommittee external non-executive director, sitting on a government or professional body or running their own business as important prerequisites for deanship. We did not, however, ask them whether they considered previous leadership experience in a large, complex organisation useful preparation for their roles.

Physical and financial resources

Identity, image

and reputation Inevitably, some of the challenges raised may echo those of any senior executive or dean anywhere, namely strategic positioning, balancing conflicting priorities, financial and resourcing issues, ensuring quality offerings, research and external reputation.

Defining the offer – strategic positioning

What appears particular to this group is the multiplicity of metrics for measuring success from the perspectives of a whole gamut of stakeholders – employers and their representatives, professional bodies, the academic community, local and central government, alumni at national, regional and international levels.

From the discussions at the ABS conference, it emerged that business school deans must focus on the competing forces shown in Figure 2:

Business Schools

Managing stakeholders – internal and external

Identity, image and reputation

Figure 2: Competing forces on UK business schools

The deans in the survey listed the top ten challenges they face as: 1. Recruiting, retaining and developing faculty and staff 2. Understanding the value of individuals’ contributions and managing underperformance 3. Raising capital for necessary facilities and expansion 4. Managing the process and outcomes of the national Research Assessment Exercise (results due 18 December 2008), the annual National Student Survey (for all final-year undergraduates), accreditations and rankings 5. Developing a differentiated brand image 6. Internationalising faculty, students and competitiveness 7. Determining an appropriate balance between different income streams 8. Understanding engagement with business 9. Developing appropriate strategies for different markets 10. Creating an appropriate student experience The environment within which university-based business schools in Britain operate is characterised by complex governance in relation to the central university, which imposes substantial taxes, systems and processes. Business schools tend to have to draw on their own funds to supplement these central services to support premium products.

Sustainability and competitiveness

Focus

L

Diversification

Identity, image and reputation

Figure 3: The challenges UK deans face leading up to 2012 Physical and financial resources

Defining the offer –

Business Schools

Managing stakeholders

(St D Entr Or co

What does it take to be a business school dean? by Julie Davies

55 EFMD Global Focus | Volume 02 | Issue 03 2008

The IDP was successfully launched in December 2007 with 22 deans from Europe, South America, the US and the Middle East participating. The IDP comprises interactive round-table meetings, small group collaboration, case studies, psychometric assessments and 360-degree feedback, extensive reading and a focus on personal strategic issues.

Using the Delphi technique, deans on the first cohort were struck by the recurring hot topics that are exercising deans at the seven very diverse business schools the IDP visited:

It is interesting that the deans surveyed did not rate leadership training, being a non-executive director, sitting on a government or professional body committee or running their own business as important prerequisites for deanship

The deans we consulted felt that in future there will be increased tensions to specialise in a limited number of activities and to pursue opportunities to diversify into new areas such as executive education.

Deans’ priorities to ensure the sustainability and competitiveness of their business schools could, therefore, lead to difficult dilemmas. For example, a strategic decision to halt MBA programmes and become more social sciences oriented would inevitably result in a new brand and type of faculty.

Figure 3 summarises these deans’ dilemmas: The survey appears to offer as many questions as answers with regard to “what type of person will lead the business schools of the future?”

The data show that deans have complicated lives as shapers and that, in reality, many are also distracted by responding to events. What are the implications for policy, practice and future research on the dean’s team and succession planning? How can we help deans in what can be a very stimulating, but also a lonely, role?

ABS plans to explore further two main questions: How can the roles of dean and their top teams be configured in different types of schools to meet their priorities?

How can we change perceptions to increase the pool of talented individuals who apply to become business school deans?

Development programmes and conferences for business school leaders provide some solutions.

Sustained dialogue with heads of universities and aspiring deans is also important. It is certainly hoped that initiatives such as the ABS/EFMD International Deans’ Programme (IDP) will provide valuable on-going support for deans to network and share ideas.

– Differentiating business schools – their place in society; is the MBA appropriate for all students?

– Talent management – Internationalisation – The management of research – New types of students (employers’ views on their Facebook usage, their requests for wind turbines) – Fund raising and friend raising Since the initial survey at the 2007 ABS conference, I have carried out 20 interviews with deans in Britain and identified a predominant psychometric type among deans and associate deans. Further research is planned to explore the life-cycle of the dean and dynamics of senior management teams.

There is also some work to be done on the interface between deans and their bosses.

In addition, ABS is currently designing a pilot team development programme which seeks to enhance learning among senior management teams in British business schools, facilitated by a very experienced (serial) dean and a top researcher in team effectiveness.

Finally, with new blood at the helm of a quarter of British business schools, it is encouraging that the pipeline of deans continues to flow. The case remains, however, that most of these deans are British born and the pool of talented individuals applying for deanship is limited. It will be interesting to see whether this will ever change, say on the scale of international transfers among Premier League football club managers and players!

Given the Bologna process, there should be more opportunities for deans to gain leadership exposure in different business schools across borders. With the peculiarly British delights of fish and chips, Shakespeare, Wimbledon, red buses, black cabs and the 2012 Olympics, perhaps we can entice more deans from outside Britain to join our talent pool.

ABOUT THE AUTHOR

Julie Davies is Head of Research and Development at the Association of Business Schools.

More information is available at www.the-abs.org.uk

56 www.efmd.org/globalfocus

Students may also believe that international perspectives and overseas study are not something that employers will value. The reality is complex

Australians are reluctant to travel internationally during their studies at university. Gerry Griffin and David Cox outline some initiatives that may help overcome this and add to the overall ‘well-roundedness’ employers say they are looking for

Mobility: a small step in a long journey

57 EFMD Global Focus | Volume 02 | Issue 03 2008

Mobility: a small step in a long journey by Gerry Griffin and David Cox

S

tudent mobility, or more accurately the lack of it, has always been an issue for Australian universities. This has been particularly so for business faculties. The global nature of business makes us very aware of the importance of international perspectives but our students are less inclined to make mobility part of their study experience than we would like.

This is partly a timing issue – young Australians tend to travel overseas in the gap year before entering university or wait until they have completed their studies. Other explanatory factors are that many of our students rely on paid work to support their studies or have family responsibilities, while a number come from low socio-economic groups – these students have been shown to participate less in overseas mobility.

Students may also believe that international perspectives and overseas study are not something that employers will value.

The reality of this is complex.

Robert Lawrence, of Prospect Marketing and Research, recently surveyed the attitudes of HR managers in a number of state, national and multi-national companies.

On the whole, employers valued “well-roundedness” more than international experience per se. Volunteer work, internships and evidence of community spirit were often seen as more valuable than overseas experience, although the latter in combination with one of the former was highly regarded.

So how can we deal with this?

In the Division of Business at the University of South Australia we are adopting a multifaceted approach focussed on mobility, which includes our Global Experience programme and the development of our Graduate Qualities. Our approach is by necessity incremental, but we hope that over time it will change the culture of the student body.

We will discuss mobility programmes first, although we recognise that mobility is only a small step on a longer and somewhat different journey.

Mobility

Our approach to mobility has already been quite successful.

In 2007 the University of South Australia as a whole had 249 outbound international placements. Of these over half were from the Division of Business. We are doing rather better than nationally – according to figures presented by Alan Olsen, Director, Strategy Policy and Research in Education Limited, Hong Kong, at the 2006 Australian International Education Conference, management and commerce students made up about 17% of such experiences. There were another 15% in what he called the “combined” field and based on our experience this would include some business/arts degree students.

58 www.efmd.org/globalfocus

50% Over half of the University’s outbound students are business students

In 2007, the number of our undergraduate business students involved in overseas placement and other international activities was 5.8% of our completing undergraduates, rather more than the 2005 national figure of 4.8% quoted by Olsen. It is possible that the national figures have grown since his survey; ours certainly have, with a significant increase in placements from 2006 to 2007.

Postgraduate mobility has been boosted by the introduction of a Business in China Intensive Study Tour, which has attracted local and international students as well as business people to a two-week series of lectures and workshops in Shanghai and Beijing.

We have increased undergraduate placements by offering more scholarships and by working more closely with selected academic programme directors to promote mobility to their students.

We have contracted an external provider to develop short-term options with a very particular aim – developing individually tailored international opportunities for students who have commitments such as work or families. This project is at its very early stages but we hope that it will give us some new ways of engaging this substantial part of our student body.

We are also starting to think about whether we could set up short exchange partnerships with other business schools in Australia or New Zealand. This would be one way of moving some students gently out of their comfort zone while at the same time containing the costs that they have to bear.

Moving beyond mobility

Our approaches to mobility are bearing fruit and we are seeing steady improvement in the number of students taking part in mobility programmes. However, given the population we serve and the context in which we operate we are probably never going to grow these programmes to a level where they engage most of our students.

So we have been asking ourselves what we can do, not just to internationalise our students’ experience, but to provide the sort of “well-roundedness” that employers are seeking. How can we both challenge and sustain our students?

For the international students who are studying with us in Adelaide we are already doing this. Anyone who interacts with international students knows that they are certainly challenged. Our task is to sustain them during that experience.

As in many other countries, international students consistently report that their main connections are with other international students and that they feel that they miss out on contact with locals.

One of our approaches to this has been the Business Mates student mentoring programme. Groups of 20 new students (both Australian and international) are allocated an Australian and an international student mentor who receive training in intercultural communication.

So we are looking not only to help new students navigate their way through their first year at university and to interact in a structured way with students from other cultures, but to help our more mature students to develop intercultural communication and leadership skills.

We have also introduced the Global Experience Program (GE). Modelled on a very successful programme at Macquarie University in Sydney, GE offers a portfolio of international experiences to students, who accumulate credits towards a certificate in addition to their academic transcript.

All GE students have to take a unit called Global Experience Professional Development, and other options include exchange, volunteering overseas or in a local organisation with an international focus and attending conferences on international matters.

For example, we are sponsoring some business students to attend the Asia-Pacific Model United Nations Conference and this will count towards their GE Program. GE is now run by a Division of Business team on behalf of the university. Further information about the programme is available at www.unisa.edu.au/globalexperience.

There are many other ways in which we provide options for students to broaden their experience – to become well-rounded and to acquire the sorts of work and life experiences that are intrinsically valuable individuals and at the same time increase their attractiveness in employment markets.

For example, we have been gradually introducing a supported framework for voluntary work placements so that students can source their own placements while at the same time being properly managed.

As our portfolio of options grows, we expect to see greater uptake by students, who will, after all, be more easily able to find an activity that matches their own particular circumstances. However, to reach all our students, we need more – we need to embed these activities in the way we teach.

A programmatic approach: graduate qualities

For over ten years we have been developing our UniSA Graduate Qualities – generic skills that map onto what EQUIS refers to as managerial competencies. The Graduate Qualities address the sorts of skills that employers seek, such as team work, ethics, social responsibility and international perspectives.

59 EFMD Global Focus | Volume 02 | Issue 03 2008

Mobility: a small step in a long journey by Gerry Griffin and David Cox

Generic attributes are now widespread but the critical issue is to achieve what the AACSB calls “assurance of learning”. In our school, each course must specify which qualities are covered and must explicitly assess them.

Australia is in some ways the end of the mobility road. Since the arrival of the first immigrants 60,000 years ago we have been a final destination

Now we are moving a considerable step further. Across the entire university we are funding (initially to the tune of almost $A5 million) a complete renewal of all our degree programmes to achieve our aim that by 2010 a third of each degree programme will be able to be in some way described as experiential learning.

This will provide many more opportunities for developing the broad perspectives and the strong connection to the diversity of real-world experience that go to make up the “well-rounded” graduate sought by employers.

Conclusion

Australia is in some ways the end of the mobility road. Since the arrival of the first immigrants 60,000 years ago across what is now the Indonesian archipelago we have been a final destinations and net inward migration remains high.

Our student mobility patterns mirror this – we are more visited than visiting. Within Australia this pattern holds just as strongly – most undergraduates study in their home states rather than in other parts of the country. The vast distances between our major population centres breed a degree of isolation.

$A5million The University of South Australia is spending $A5 million on a complete renewal of its degree programmes so that by 2010 a third of each programme will be able to be in some way described as experiential learning

With the acceleration of globalisation, business faculties face many challenges in involving students in experiences that broaden their outlook and engage them in international discourse. Our conceptualisation of mobility as just one part of a much wider portfolio of experiences designed to broaden and deepen our students’ outlook on life is, we believe, one useful way to think about how we will respond to those challenges.

We hope that by sharing experiences through organisations such as the EFMD we will be able to participate in a dialogue that benefits business schools and business students internationally.

ABOUT THE AUTHORS

Gerry Griffin is Pro Vice Chancellor and David Cox, Manager: Accreditation, at the Division of Business, University of South Australia, Adelaide, Australia.

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EFMD 2008/09 | www.efmd.org/conferences & learning groups

Upcoming events October 2008

November 2008

EVENT

EVENT

EVENT

EFMD Advisory Services Seminar

EFMD Executive Education Meeting

DATES / VENUE

DATES / VENUE

Shanghai Management Development Week – CEIBS – EFMD conference

10 October / EFMD Premises, Brussels

12-14 October / Lisbon, Portugal

DATES / VENUE

THEME

THEME

5-6 November / Shanghai, China

Designing, Implementing and Managing Effective Coaching Strategies

Executive Education in a changing world – Lagging or Leading?

THEME

HOST

HOST

EFMD

Universidade Católica Portuguesa, Faculdade de Ciências Económicas e Empresariais

HOST

EVENT

EVENT

EVENT

EQUIS Accreditation Seminar

EFMD Advisory Services Seminar

EFMD Advisory Services Seminar

DATES / VENUE

DATES / VENUE

DATES / VENUE

6 November / Shanghai, China

12 November / EFMD Premises, Brussels

14 November / EFMD Premises, Brussels

THEME

THEME

THEME

EQUIS Accreditation

Business Diplomacy and Reputational Capital

HOST

HOST

CEIBS

EFMD

Curriculum Development for Business Schools – Incorporation of a New Demand: Public Affairs

Chinese Companies Going Global – Managerial Challenges and Aspirations CEIBS

HOST

EFMD

December 2008 EVENT

EVENT

EVENT

EFMD/ AACSB Global Collaboration Conference

EFMD Advisory Services Seminar DATES / VENUE

International Deans’ Programme Module 1

DATES / VENUE

20 November / EFMD Premises, Brussels

DATES / VENUE

16-18 November / Barcelona, Spain

THEME

3-5 December / Rio de Janeiro, Brazil

THEME

HOST

Global Collaborations

Attracting Quality International Students in Programmes

HOST

HOST

IESE

EFMD

January 2009 EVENT

EVENT

EFMD Advisory Services Seminar DATES / VENUE

EFMD Meeting for Deans and Directors General

16 December / EFMD Premises, Brussels

DATES / VENUE

THEME

29-30 January / Milan, Italy

Emerging Technologies for Management Development

THEME

HOST

HOST

EFMD

SDA Bocconi

Competing through knowledge

PETROBRAS – Petróleo Brasileiro S.A.

The Shanghai Management Development Week 3 conferences, 1 city, 1 week The Shanghai Management Development Week, sponsored by the European Commission, will take place at CEIBS, Antai College of Economics & Management and Fudan University, School of Management, Shanghai, China during November 2008.

5/ 6 November 2008 EFMD – CEIBS conference Shanghai, China Chinese Companies Going Global – Managerial Challenges & Aspirations Are the global markets ready for these new global players? What are the threats and the opportunities?

What are China’s views on the European economy and how does Europe view the Chinese economy?

How are the differences in organisational cultures and governance perceived by the different markets?

How are these challenges influencing the Management Education and Management Development agendas?

This conference aims at exploring both the challenges for the corporate world, focusing particularly on the managerial challenges, and the impact of challenges on management education and executive development.

The conference is followed by an EQUIS seminar in the afternoon at CEIBS. For further information please contact: delphine.hauspy@efmd.org or visit www.efmd.org In addition to the CEIBS / EFMD conference, EFMD is pleased to cooperate with and to promote the following two conferences that will be taking place also in Shanghai during the same week in November 2008 4 November 2008 Antai College of Economics & Management, Shanghai, China

6/8 November 2008 AAPBS Annual Meeting, Fudan University, School of Management, Shanghai, China

Responsibilities of Business Schools Summer Chen, chenxx@sjtu.edu.cn

Annual meeting of the Association of Asia-Pacific Business Schools Stephanie Xu, lihuaxu@fudan.edu.cn

www.efmd.org

Volume 02 | Issue 03 2008

EFMD

EFMD Global Focus

EFMD aisbl

Rue Gachard 88 – Box 3 1050 Brussels Belgium

Why Judge’s Dean Arnoud De Meyer likes being an integral part of a top university

Volume 02 | Issue 03 2008

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

Email: info@efmd.org

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GMAT The True Test of Business 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.

Diverse opinions EU Commissioner Janez Potocnik celebrates Europe’s differences

Flat refusal Strategy guru Pankaj Ghemawat says the world is still a rough place

CLIP art Martine Plompen reports on why the CLIP process is working well

Antai success China’s Antai College of Economics and Management wins EQUIS accreditation

Now it’s personal David Lamond opts for individual, not corporate, social responsibility

Stay-at-home OZ? Gerry Griffin and David Cox on making Australian students more international