GF Vol 03 Issue 01

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Volume 03 | Issue 01 2009

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Global Focus

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Volume 03 | Issue 01 2009

Rue Gachard 88 – Box 3 1050 Brussels Belgium Email: info@efmd.org

Where do you find the world’s best students?

They’re in The 100+ counTries ThaT deliver The GMaT.

New EFMD President Alain Dominique Perrin says that EFMD is well placed to face difficult times

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To learn more about the GMaT, visit gmac.com

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INSIDE THIS ISSUE China’s world Chinese companies ‘go global’ in search of resources, growth and markets

Test match?

Dave Wilson talks about GMAC’s strategic alliance with EFMD

Peter Drucker The best management guru ever? Richard Straub thinks so

Breaking ranks Della Bradshaw tells us to relax about business school rankings

GRLI update Anders Aspling on why the latest GRLI call for action is so urgent

Responsible youth Liz Maw wants to harness the millennial generation

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EFMD Advisory Services assist members in the continuous quality improvement of their programmes, activities and governance. Seminars are interactive and include the intervention of an expert and presentation of a recent case study. As the seminars are limited to a maximum of 25 participants the opportunity to share ideas, best practices and learn from colleagues and speakers is a key component of the seminar design.

EFMD Advisory Seminars Agenda for 2009

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In 2009 seminars will be organised at the EFMD head office in Brussels, on the following themes.

February

March

April

May

October

November

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MSc programmes

Doctoral programmes Career services in business schools

Africa

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12

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IT seminar for those Fundraising in involved in IT teaching business schools

21

Academic publishing Quality of students

17

Translating soft skills Rankings into teaching methods

Internationalisation

If you would like to pre-reserve a place or show an expression of interest for any of the upcoming seminars please contact Virginie Heredia-Rosa who will be delighted to help – virginie.heredia-rosa@efmd.org

www.efmd.org

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In focus...

EFMD Global Focus | Volume 03 | Issue 01 2009

Volume 03 | Issue 01 2009

In focus In his first contribution to Global Focus (page 14) Alain Dominique Perrin, EFMD’s new President, sums up the current economic and financial situation succinctly: “There is no doubt that 2008 was one of the most challenging years ever faced by business, and indeed all of us – perhaps the most challenging period of our lifetime.

And there can equally be little doubt, at least in my mind, that the New Year we have just entered will face us with similar, if not greater, demands.

What we should not lose sight of is that during 2009 management education and management development generally will be of greater, not lesser, importance for business and society.

Challenging times demand people with the talent and training to meet them.

It is therefore heartening, as I take over as President, to find the EFMD in such good shape, more than equal to the situation it faces.”

As Mr Perrin, points out, there is little doubt that the model of globalised business that has served the world’s economy so well during at least the past two decades is under stress. Many people look to China, with its huge manufacturing base and large reserves, to help meet the current situation.

Jean-Paul Larçon’s article (page 8), outlining the strategies of China’s burgeoning multinational companies as they “go global”, is therefore a useful guide to at least one element of how this might happen.

But the origin of the present situation lies in the past, in the so-called “Credit Crunch” and perhaps even earlier, which adds resonance to the GRLI’s call for action (see page 48) on responsible leadership and Kai Peters’ and Matthew Gitsham’s hope for progress on an equally pressing problem – the threat to our natural environment (page 58).

The younger generation, as always, may offer hope. Certainly, Liz Maw believes so in her description of how the “millennial” generation’s interest in corporate social responsibility could be harnessed (page 66).

And not just the young. On page 30 Richard Straub shows how one of the great management gurus, Peter Drucker, presciently forewarned of the present difficulties.

Finally, Dave Wilson, President and CEO of GMAC, talks of the importance of its strategic relationship with EFMD (page 26) and the FT’s irrepressible Della Bradshaw tells us all to stop worrying about business school rankings (page 18) – life is, indeed, serious enough already.

www.efmd.org/globalfocus

Volume 03 | Issue 01 2009

Contents Global Focus The EFMD Business Magazine

1 In focus

Executive Editor

4 Talking Shop Public management summit EPAS Scale-Up success Funding management students Business of Branding report Outstanding doctoral research award winners

Matthew Wood matthew.wood@efmd.org Advisory Board

Eric Cornuel, Jim Herbolich, Howard Thomas Consultant Editor

George Bickerstaffe bickerstaffe@btinternet.com Contributing Editors

Stéphanie Dameron, Marianne DelPo Kulow, Thomas Durand, Matthew Gitsham, Jean-Pierre Helfer, Thomas Jørgensen, Jean-Paul Larçon, Andrew Likierman, Liz Maw, Alain Dominique Perrin, Kai Peters, Richard Straub, Howard Thomas 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 ©

EFMD

8 Chinese companies go global The blossoming of the Chinese economy and government encouragement is sending Chinese companies across the world in search of resources, growth and markets says Jean-Paul Larçon 14 The challenge of the present Alain Dominique Perrin, EFMD President, sees turbulence all around but says that EFMD is well placed to meet the demands of difficult times 18 Top rank The Financial Times’s Della Bradshaw tells George Bickerstaffe that people need to be more relaxed about business school rankings 22 A dual strategy for European business schools Stéphanie Dameron and Thomas Durand suggest European business schools rethink their strategies to compete with their American counterparts, recommending a dual strategy of catching up with the leaders and differentiating 26 Testing times Dave Wilson, President and CEO of the Graduate Management Admissions Council, talks about strategic alliances, the future of the GMAT and going global. Interview by George Bickerstaffe 30 Reaching out – coming home: a time to rediscover Peter F Drucker Richard Straub sums up the lifetime achievements of the late Peter Drucker, the ‘father of modern management’, the centenary of whose birth occurs this year 36 Business school strategy and the metrics for success Howard Thomas presents a framework for a systems perspective for business schools to formulate strategy, assess performance and adapt to change

Contents

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EFMD Global Focus | Volume 03 | Issue 01 2009

40 How culture can make sense of management Business students need to understand the basics of management but if they are to appeal to today’s recruiters they must also have a wider vision says Jean-Pierre Helfer 44 Europe’s agenda for improving research training and doctoral education Thomas Jørgensen outlines the actions needed to ensure doctoral education meets Europe’s needs

30

48 The globally responsible leader – a call for action The Globally Responsible Leadership Initiative (GRLI) has issued a call for action 54 Measuring the success of custom programmes How do we know whether executive development programmes, particularly custom programmes, actually work? Andrew Likierman suggests some ways of measuring the impacts 58 Developing the global leader of tomorrow Climate change and other pressing environmental and social issues urgently require transformational change. But, ask Kai Peters and Matthew Gitsham, are business schools and HR departments up to the challenge?

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62 When a diploma and a job are not enough Marianne DelPo Kulow argues the case for supplementing women’s business education with professional development workshops 66 Equipping the millennials for social change The millennial generation shows a natural affinity with issues of corporate social responsibility. Liz Maw suggests that this needs to be harnessed at the undergraduate level

The millennial generation shows a natural affinity with issues of corporate social responsibility. So how best to harness this? page 66

www.efmd.org/globalfocus

News and events in brief from the business world

Talking shop EFMD successfully concludes the EPAS Scale-Up initiative EFMD has successfully concluded its Scale-Up initiative to establish EPAS as the premier accreditation system for academic degree programmes in business and management.

Following two pilot phases in 2005 and 2006, Scale-Up aimed at building up a European-wide presence for EPAS. According to Eric Cornuel, Director-General of EFMD, Scale-Up has turned out to be a great success and has exceeded EFMD’s expectations by a wide margin.

“The growing demand for EPAS accreditation clearly reflects the widespread need of business schools to assess the academic rigour and the professional effectiveness of their programmes, often newly designed for Bologna fitness, while simultaneously receiving public recognition for successful internationalisation,” he says.

World Summit on public management education, training and development Jointly organised by EFMD, IRSPM and the Public and Nonprofit Division of the Academy of Management and hosted

by Corvinus University, Budapest, Hungary, 18-19 June 2009 the World Summit will review the ”state of play” in public management education, training and development and consider its future directions in the 21st century.

EPAS complements the already well-established EQUIS system, EFMD’s institutional accreditation service, and was developed by EFMD in response to the many requests of its members to offer programme-level accreditations too.

The feedback from the market has been very positive, which is clearly reflected by the EPAS numbers after only 21 months of regular operation. Considering all EPASaccredited and EPAS-eligible programmes, the market coverage for EPAS currently extends to 68 programmes from 50 institutions based in 26 countries covering all continents. Thirty-four per cent of the total are Executive MBA programmes, 29% are Masters, 25% are Bachelors, and 12% are non-Bologna country-specific programmes.

The EFMD Quality Services Department anticipates that most eligible programmes will go through the remainder of the accreditation process within the next 16 months.

It is also expected that EPAS will generate some 30 new applications during 2009.

We are looking for contributions from academics, educators and trainers, policy makers and public management practitioners. These figures emphasise the market acceptance of EPAS. These contributions may be one of four types: Professor Cornuel emphasises, however, that EPAS is not about numbers. EFMD – Research findings and evidence about effective public initiated the EPAS project in 2005 to establish a clearly demanding programmemanagement education and training accreditation system with a truly international scope.

– Papers that offer concepts and theories deepening our understanding of public management education and development – Contributions from educators and trainers, whether university or practice based, about effective public management education and training practice – Papers and contributions presenting case studies and reflections from first-hand experience of the practice of public management education and training For more information on the summit and the call for papers visit www.efmd.org/conferences

“EPAS is based on the same principles as EQUIS. We recognise programmes for successful internationalisation and are most demanding with our standards in the areas of academic rigour, corporate relevance and quality assurance,” he says. “We want to attract the premium segment of international academic management programmes worldwide. As with EQUIS, our EPAS accreditation standards will become gradually more demanding as the quality of the best programmes naturally evolves. This will present challenging development targets for EPAS applicants and will actively support the continuous quality improvement efforts of institutions already with EPAS accreditation.”

For more information on EPAS visit www.efmd.org/epas

EFMD Global Focus | Volume 03 | Issue 01 2009

Talking shop

We recognise programmes for successful internationalisation and are most demanding with our standards in the areas of academic rigour, corporate relevance and quality assurance Eric Cornuel, Director-General, EFMD, on the EPAS Scale-Up

Funding business and management students The focus of this paper is a comparison of the higher-education funding system in seven European countries (Denmark, England, Finland, Germany, Norway, Sweden and Switzerland) as it illustrates and compares the allocation of public funding per capita to business and management students with engineering and technology students.

The results demonstrate that the amounts allocated per student per year (in 2007) differ considerably between €2.03 and €6.72 in the area of business and management and €4.67 and €12.73 in the areas of engineering and technology.

On average, engineering and technology students receive 2.3 times the resources of business and management students.

In addition, the results demonstrate that the seven countries can be divided into three groups with distinct policies regarding this resource allocation.

The paper also discusses the ability of the seven countries’ higher-education institutions to charge tuition fees and demonstrates that different solutions have been chosen by politicians in order to obtain sufficient funding for their highereducation institutions.

Reflections and recommendations, particularly regarding the future resource allocation methodology in Sweden, are also provided.

To download a copy of this report visit www.efmd.org/publications

Two new EQUIS accreditations EFMD would like to congratulate the following schools who have recently been awarded EQUIS accreditation: – Babson College, USA – Loughborough University Business School, UK This takes the number of EQUIS accredited schools to 115 across 33 countries.

For a full list of the EQUIS schools please visit www.efmd.org/equis

EFMD Advisory Seminars 2009

EFMD Advisory Services assist members in the continuous quality improvement of their programmes, activities and governance. Seminars are interactive and include the intervention of an expert and presentation of a recent case study.

As the seminars are limited to a maximum of 25 participants the opportunity to share ideas, best practices and learn from colleagues and speakers is a key component of the seminar design.

In 2009 seminars will be organised at the EFMD head office in Brussels on the following themes.

February 13 IT seminar for those involved in IT teaching March 6 Fundraising in business schools March 21 Academic publishing April 3 MSc programmes April 28 Quality of students May 8 Doctoral programmes May 12 Translating soft skills into teaching methods October 2 Career services in business schools October 17 Rankings November 17 Africa November 24 Internationalisation If you would like to pre-reserve a place or show an expression of interest in any of the upcoming seminars please contact Virginie Heredia-Rosa virginie.heredia-rosa@efmd.org

www.efmd.org/globalfocus

News and events in brief from the business world

Talking shop Business of Branding The 2008 Business of Branding study, conducted by CarringtonCrisp in association with EFMD and ABS, found that money and customer service are becoming more significant issues for those choosing to study business.

EQUIS accreditation seminar EFMD Offices, Brussels 31 March 2009 The objectives of the seminar are: – Practical application of the ten EQUIS Standards and Criteria – 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 selfassessment report – Deciding whether you are ready for EQUIS accreditation: gap analysis – Exploring alternatives: would EPAS accreditation be a better option?

Target audience The seminar is targeted at both EQUISaccredited 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 & Awarding Body, the fee is waived).

If you have any questions or require more information please contact Veronique Roumans veronique.roumans@efmd.org

Now in its fifth year and with data from over 40,000 respondents at 70 business schools in 15 countries, the research suggests that had the global financial crisis been in place when they were considering an MBA between 5% and 15% of MBA students may have changed their minds.

Although decisions to study are often countercyclical, high levels of housing debt and falling numbers of high-paid jobs in finance for MBA graduates mean that schools may have to work harder to persuade prospective students to take on an MBA.

Ashridge sustainable innovation award Ashridge Business School, in partnership with EABIS and supported by HP and WWF, has launched the Ashridge Sustainable Innovation Award 2008/2009.

Other findings this year were growing expectations among students of higher levels of customer service from schools and that despite the influence of the Internet in choosing where to study, some form of human contact remains hugely important before most students make a final decision. And given that most students study business to improve their careers, strengthening the career services offer at a school can significantly enhance a school’s reputation.

The award is designed to generate the best ideas from MBA and other postgraduate students on how organisations can create value from the shift to a low-carbon economy.

The winning entrant will receive a cash prize of €7,000, a six-month mentorship with HP and career advice from Spencer Stuart, the executive search firm. The second and third prizes are €5,000 and €3,000 respectively, also including career advice

An Executive Summary of the Business of Branding 2008 can be downloaded from the EFMD website and details of how to take part in next year’s study can be obtained from Matthew Wood at matthew.wood@efmd.org or Andrew Crisp at andrew@carringtoncrisp.com

The award is open to full-time or part-time students studying on any MBA programme being taught in Europe, the Middle East or Africa (EMEA) during the 2008/2009 academic year.

Additionally, the award is open to full-time or part-time MBA students at one of EABIS’ nonEMEA member schools and students on MBA or Masters-level postgraduate programmes at HP-linked universities. The closing date for entries is 2 March 2009.

For further information, please visit: www.ashridge.org.uk/sustainableinnovation

EFMD Global Focus | Volume 03 | Issue 01 2009

The 2008 Emerald / EFMD

Outstanding Doctoral Research Awards Winners International recognition and cash awards for the best doctoral research 2008 has been the most successful year so far for the Emerald/EFMD Outstanding Doctoral Research Awards with over 130 applications from institutions all over the world.

This year there were nine subject categories, sponsored by a selection of Emerald’s journals. One overall winner has been selected from each subject category and a number of Highly Commended and Special Commendations have been bestowed.

Overall winners will receive a cash prize of £1,500 (or currency equivalent), a certificate and an offer of publication in the sponsoring journal, either as a full paper or an executive summary at the editor’s discretion.

Further updates including a list of the Highly Commended and Special Commendations will appear on the Emerald and EFMD websites. http://info.emeraldinsight.com/ research/awards/2008_odra.htm www.efmd.org/odra

“On behalf of Emerald & EFMD, we are pleased to pledge our ongoing support for the Awards in 2009, and to contributing to outstanding scholarship in the field of Doctoral research in business and management.”

Dr John Peters CEO of Emerald Group Publishing Ltd Prof. Eric Cornuel Director General and CEO of EFMD

Hospitality Management Category sponsored by International Journal Contemporary Hospitality Management

Logistics and Supply Chain Management Category sponsored by International Journal of Physical Distribution & Logistics Management

Winner: Li Miao , Purdue University, USA Consumers’ Emotional Responses to Service Encounters: The Influence of Other Consumers

Winner: Matthias Ehrgott, WHU - Otto Beisheim School of Management, Germany Social and Environmental Sustainability in Supplier Management - A Stakeholder Theory Perspective on Antecedents and Outcomes

Human Resource Management Category sponsored by Personnel Review Winner :Robert Kaše, University of Ljubljana, Slovenia ‘Effects of HR Practices on Knowledge Transfer in Knowledge-Intensive Firms: The Mediating Role of Social Network Dimensions Information Science Category sponsored by Journal of Documentation Winner: Xin Fu, University of North Carolina at Chapel Hill, USA Evaluating Sources of Implicit Feedback for Web Search Knowledge Management Category sponsored by Journal of Knowledge Management Winner: Johannes Dumay, The Univesity of Sydney, Australia Intellectual Capital in Action: Australian Studies Leadership and Organization Development Category sponsored by Leadership & Organization Development Journal Winner: Christine Cross, University of Limerick, Ireland An Investigation of Women’s Career Progression Decisions as a Significant Determinant of the UnderRepresentation of Women at Senior Management Levels in Ireland

Management and Governance Category sponsored by Management Decision Winner: Yves Fassin, Ghent University & Vlerick Leuven Gent Management School, Belgium Business Ethics, Stakeholder Management and related fields in Entrepreneurship: an analysis of concerns, perceptions and inconsistencies Marketing Strategy Category sponsored by European Journal of Marketing Winner: Berk Ataman, Rotterdam School of Management, Erasmus University, Netherlands Managing Brands Quality Management Category sponsored by The TQM Journal Winner: Milena Ali, University of Ljubljana, Slovenia Contribution of the ISO 9001 Internal Audit to the Achievement of Business Goals: a Case of the Company Mercator

www.efmd.org/globalfocus

Chinese companies go global The blossoming of the Chinese economy and government encouragement is sending Chinese companies across the world in search of resources, growth and markets says Jean-Paul Larçon

T

wo powerful forces have transformed the Chinese economy since Deng Xiaoping first introduced his “open door” and reform policy in 1978: the reorganising of China’s former inefficient monopolies and the encouraging of foreign investment in order to bring technology, financing and know-how to Chinese companies in exchange for market entry.

This policy, coupled with economic and institutional reforms, led to the blossoming of China’s economy and a sustained economic growth at an average annual rate of 9.9% over a period of 30 years.

However, the real surge of China’s flow of outward foreign direct investment began only recently with the new government policy encouraging “go global” strategies in 2000 and China’s entry into the World Trade Organisation in 2001.

This situation created new challenges for Chinese companies in the domestic market along with new opportunities for growth in foreign markets.

The two-way open door policy will probably be continued and also enhanced during the course of the 11th Plan (2006–2010). This means not only more opportunities and fewer constraints for foreigners investing in China but it also provides a powerful incentive for Chinese companies to invest abroad.

The Chinese government and its specialised agencies promote the go global strategy by backing investments and monitoring them carefully. Chinese companies will receive additional support to help them grow internationally, develop exports and implement all forms of outward foreign direct investment and co-operation. The presence of “Chinese” multinationals in the global rankings will remain a priority and a source of national pride.

The situation in China is very different from that in India. India’s multinationals are private companies and think in terms of shareholder value; there is little encouragement or incentive from government, which seems to take a more or less neutral stance.

An institution such as the Chinese Government Council’s State-Owned Assets Supervision and Administration Commission (SASAC) has had a key role in guiding the transformation and financial re-engineering of China’s national “super star” companies.

Chinese companies go global by Jean-Paul Larçon

The presence of ‘Chinese’ multinationals in the global rankings will remain a priority and a source of national pride

9.9% China’s economy has experienced a sustained economic growth at an average annual rate of 9.9% over a period of 30 years

29 In 2008, 29 leading Chinese enterprises were already on the Fortune 500 Global list

8 Eight mainland China companies are among the top 100 non-financial multinationals from developing countries

EFMD Global Focus | Volume 03 | Issue 01 2009

10 www.efmd.org/globalfocus

It has helped them to reach a critical mass through mergers and acquisitions and to accumulate sufficient financial, human and technological resources to successfully enter the international arena. In 2008, 29 leading Chinese enterprises were already on the Fortune 500 Global list.

China’s national super stars include a number of leading Chinese multinationals. Eight mainland China companies are among the top 100 non-financial multinationals from developing countries: CITIC, COSCO, Sinochem, Lenovo, CNOOC, China Minmetals and China Communications Construction.

The majority of these Chinese companies are either stateowned enterprises or companies indirectly controlled by a state-owned company or public organisation.

The largest one, CITIC, defines itself as a transnational conglomerate. Its business ranges from finance to manufacturing and services. Its index of transnationality (the ratio of foreign assets, sales and employment to total activity) is as high as 92%.

Examples include three oil companies: Sinopec, China National Petroleum (CNPC) and China National Offshore Oil Co (CNOOC); two large car manufacturers: Shanghai Automotive (SAIC) and China FAW Group; one steel giant: Baosteel Group; and four banks: Industrial & Commercial Bank of China, China Construction Bank, Bank of China and Agricultural Bank of China.

Some private companies, such as Haier, the world’s fourthlargest white goods manufacturer, and telecoms group Huawei Technologies, have also started the process of internationalisation.

Seventy-two per cent of Huawei’s sales are in the international market.

The two largest companies, Sinopec and China National Petroleum, are in the oil and gas business and are respectively ranked 16th and 25th among the world’s largest companies.

Most banks and financial institutions are still at the initial stage of internationalisation but will soon be playing a role on the global scene.

In the steel industry, which is still in the consolidation phase in China, Baosteel recently began to expand its operations internationally after restructuring its domestic activities.

ICBC’s public offering in 2006 – the world’s largest-ever initial public offering – was a benchmark in the transformation of state-owned commercial banks into public companies.

Over the last ten years, it has developed its activities abroad, securing access to mineral resources in Australia and Brazil through a series of acquisitions, joint ventures and long-term contracts with local groups such as Brazil CVRD.

In 2007 China Development Bank (CDB), one of the country’s three so-called state “policy banks”, joined up with Temasek, the Singapore government’s investment firm, and Barclays Bank in an attempt to acquire ABN AMRO.

From this point of view, Baosteel is a latecomer. But the consolidation of the industry at a global level – for example the Mittal-Arcelor deal – might push the company to focus on major acquisitions in order to rapidly expand its international presence.

The China Investment Corporation (CIC), which was created by the Chinese government in 2007 with a capital of approximately $200 billion, is one of the world’s four largest state-controlled sovereign wealth funds. Its global ambitions became clear early in the game. Shortly after its creation, CIC

Chinese companies go global by Jean-Paul Larçon

ICBC’s public offering in 2006 – the world’s largest-ever initial public offering – was a benchmark in the transformation of stateowned commercial banks into public companies

72% Telecoms group Huawei Technologies has started the process of internationalisation. Seventy-two per cent of its sales are in the international market

$5bn Shortly after it was created by the government the China Investment Corporation acquired a $5 billion stake in investment bank Morgan Stanley

11 EFMD Global Focus | Volume 03 | Issue 01 2009

invested $3 billion for a 9.9% interest in the New York-based private equity firm Blackstone Group LP and acquired a $5 billion stake in investment bank Morgan Stanley.

Chinese multinationals are aiming to become world leaders in their category, to move up the ladder in global rankings, and to catch up with the international standards of excellence more efficiently and effectively than their predecessors, be they Western, Japanese or South Korean multinationals.

In order to attain this goal, Chinese companies have to invest in a number of different areas, including R&D, quality control, competitive strategy and alliances, cross-cultural management, branding and reputation.

They are pursuing five different goals that are, at times, closely interrelated: – a ccess to natural resources such as oil and gas and minerals but also agricultural products and marine resources – access to technology especially in America, Canada, Japan, South Korea and Western Europe – a presence inside the trade barriers of large international markets, such as the European Union and NAFTA – conquest of new markets in emerging and/or developed economies – building a global presence through a strategy of major mergers and acquisitions.

Chinese companies have usually started their internationalisation through exports, both to emerging markets and developed economies.

Haier, for example, has won on both fronts, building a successful

12 www.efmd.org/globalfocus

Chinese multinationals have to work simultaneously on building their own R&D capabilities and international marketing and distribution networks, on developing their cross-cultural skills and on creating global brands

presence in emerging markets and gaining a significant foothold in America and key European markets. However, the majority of Chinese firms have succeeded by focusing on the emerging markets of Africa, Asia, Latin America and Russia.

In the oil and gas industry, the main Chinese investments are in Asia (in particular Indonesia), Central Asia (especially Kazakhstan), the Middle East and Africa (particularly in Sudan).

In their quest for natural resources, the approach of Chinese multinationals does not differ substantially from that of their Western counterparts: company strategies are strongly supported by government foreign policy and diplomacy.

Much more specific to Chinese companies is the quest for technology.

Chinese multinationals benefit from a favourable environment at home, which includes major national high-technology programmes, a sophisticated network of university-based institutions and a large pool of well-trained researchers and engineers as well as relatively easy access to loans from state-owned banks.

Chinese corporate strategies include the development of in-house R&D capabilities, R&D partnerships in China and abroad and technologybased acquisitions. Chinese companies usually target the industry’s most advanced high-tech clusters in America, Japan and South Korea.

In 2001, for example, Huawei Technologies created FutureWei, a wholly owned subsidiary designed to serve the North American market, with a focus on R&D, design, direct sales networks, and original equipment manufacturer (OEM) and original design manufacturer (ODM) relations.

The company headquarters are located in Texas, close to the Dallas telecoms corridors, while its R&D labs are in San Diego and Santa Clara.

The Lenovo-IBM deal and the Thomson-TCL partnership in 2004 and the attempt by the Chinese oil company CNOOC to acquire Unocal Oil Company in 2005 are good examples of the capacity of Chinese companies to mobilise important resources so that they can play a global role.

good move for IBM, freeing resources for new activities, and also for Lenovo, even if the Chinese giant will need to expend time and energy on restructuring and creating synergies between Chinese and global operations to make the deal profitable. It has provided Lenovo with not only a worldwide marketing organisation and production and R&D facilities but also a co-branding mechanism that has permitted Lenovo to move faster in building a truly global brand.

TLC’s acquisition of Thomson Multimedia’s operations and brands in Europe and America was less successful in terms of implementation, organisation and speed of transformation of the newly acquired activities.

However, during a period of recession and financial constraints, Chinese companies may suffer less than their Western counterparts. They will keep their cost-leadership advantage and domination of the low-cost segment, which should be less affected by the crisis, and will be able to find new acquisition opportunities.

Chinese multinationals have to work simultaneously on building their own R&D capabilities and international marketing and distribution networks, on developing their cross-cultural skills and on creating global brands.

A company such as Haier has demonstrated its capacity to develop - in a very short period of time - a business model with strong local responsiveness and the ability to serve the different needs of its customers in China, in emerging markets and in large segments of developed economies, such as America and the EU. Nevertheless, many Chinese companies are facing conditions that they have not had to deal with before. Compared to their previous experiences of growth, acquisition and restructuring within the domestic market, they now have to meet new challenges such as managing joint ventures abroad with partners who have potentially diverging long-term goals or integrating companies with a very different organisation or culture.

Western companies are having to realign their value chain worldwide and refocus on fast-growing added-value segments. This new situation is creating opportunities, in particular for multinationals based in emerging markets - and most importantly in China, which holds a key position.

ABOUT THE AUTHOR

The sale of the IBM PC division to Lenovo in 2004 has proved to be

Jean-Paul Larçon is Professor of International Strategy at HEC Paris and editor of Chinese Multinationals, World Scientific Publishing Company (2008).

13 EFMD Global Focus | Volume 03 | Issue 01 2009

C o n n e c t i n g

G r e a t

M i n d s

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Discount till 31-Mar-2009 by indicating discount code EFMD. Order your copy at www.worldscibooks.com

CHINESE MULTINATIONALS edited by Jean-Paul Larçon (HEC Paris, France)

“At a time where globalization is both a great opportunity and a challenge to many societies, companies and individuals, this book is a very useful contribution. It helps us understand how Chinese companies are using their domestic successes to accelerate their development and enhance their access to new markets or new technologies.”

Henri de Castries, Chairman of the Management Board and CEO of AXA, France This book examines the rise of Chinese companies in international markets during the last two decades of rapid expansion of the Chinese economy. The fruit of a collaboration between two leading business schools, HEC Paris and the School of Economics and Management of Tsinghua University, it provides a comprehensive overview of the strategies of Chinese multinationals in terms of international marketing and branding, M&As and international joint ventures, management of technology, organization and human resource management, etc.

The strategies of several well-known companies are described in detail, including Baosteel, Bird, Haier, Hisense, Huawei Technologies, Lenovo, Nuchtech, Petrochina, TCL, Tsingtao Brewery, Wahaha, Wanxiang, etc .

Readership: Academics, graduate students and business executives and professionals interested in Chinese business.

300pp 978-981-283-500-0 978-981-283-559-8(pbk)

Oct 2008 US$58 £31 US$32 £17

Other Titles of Interest

Preferred Publisher for Leading Thinkers 1.indd 1

10/30/08 2:32:25 PM

14 www.efmd.org/globalfocus

Alain Dominique Perrin, EFMD President, sees turbulence all around but says that EFMD is well placed to meet the demands of difficult times

The challenge of the present T

here is no doubt that 2008 was one of the most challenging years ever faced by business, and indeed all of us – perhaps the most challenging period of our lifetime. And there can equally be little doubt, at least in my mind, that the New Year we have just entered will face us with similar, if not greater, demands.

What we should not lose sight of is that during 2009 management education and management development generally will be of greater, not lesser, importance for business and society.

Challenging times demand people with the talent and training to meet them.

It is therefore heartening, as I take over as President, to find the EFMD in such good shape, more than equal to the situation it faces.

Though a quintessentially European organisation, based in the European “capital”, Brussels, EFMD is truly international, with over 700 members in 80 countries. These members cover academia, business, public service and consultancy and to them EFMD has over the past 40 years provided a unique network offering information, research and debate on innovation and best practice in management development.

Given the near global financial meltdown of last autumn, the role of EFMD is of increasing and growing importance.

As part of its overall remit it has always been committed to creating a relevant and diverse network that shared the common objective of developing effective and socially responsible leaders and managers.

It was in this context that in 2003 it signed a partnership agreement with the United Nations Global Compact that has now led to the highly

innovative international Globally Responsible Leaders Initiative (GRLI) and the development and formulation of The Principles for Responsible Management Education (PRME), which were presented to the United Nations Secretary General, Ban Ki-moon, in July 2007.

During the same period EFMD has been a strategic partner with the European Academy for Business in Society (EABIS) and conducted two surveys on “Business in Society and Corporate Responsibility Research, Education and other Initiatives in Business Schools and Universities”. The findings from the latest survey feature in the European Business in Society (BiS) Gateway, which was launched in the autumn.

In the years that lie ahead I think we will be increasingly grateful for, and mindful of, these forward-looking actions.

EFMD is also a leading figure in the drive for quality standards in higher management education through such renowned accreditation processes as EQUIS and EPAS for business schools and CLIP for companies.

Launched in 1997 and now in its second decade, EQUIS (European Quality Improvement System) is central to EFMD’s mission of improving the standard of management education worldwide.

Covering all programmes offered by an institution from first degree to PhD, EQUIS accreditation has been awarded to 115 institutions from 33 countries, all of which have demonstrated overall high quality in all their activities, but also a large degree of internationalisation and a balance between high academic quality and the professional relevance provided by close interaction with the corporate world.

EQUIS is now supported and complemented by the new EPAS (EFMD Programme Accreditation System) programme-specific accreditation process.

From my own point of view as a business leader for four

Management education and management development generally will be of greater, not lesser, importance for business and society

700+ EFMD is not just European but truly international with over 700 members in 80 countries

15 EFMD Global Focus | Volume 03 | Issue 01 2009

IMAGE COURTESY: MIDNIGHT MARMALADE

The challenge of the present by Alain Dominique Perrin

16 www.efmd.org/globalfocus

decades, perhaps among EFMD’s more far-sighted achievements has been the development of CLIP (Corporate Learning Improvement Process), an accreditation system for companies’ own in-house training processes.

Companies face increasing pressure to integrate their learning and people-development processes with their overall strategies. And as times get harder this pressure can only increase.

As EFMD has pointed out, companies now and in the future will face a number of critical objectives. They must attract and retain the best talent they can find, develop future leaders, align strategy, competencies and behaviour, disseminate knowledge and expertise throughout the organisation, make learning a central part of mainstream HR activities, shift the emphasis from training to learning and improve performance.

Many firms have responded by upgrading their learning and training functions to give them a central strategic role, often “rebranding” them as Corporate Universities, Corporate Business Schools, Academies, Management Institutes and so on.

In Europe most of these organisations are still relatively new but are reaching a stage where there is a real need for ways to measure their effectiveness and justify the investments made in them.

I am, of course, greatly honoured to take over as President of EFMD and I pay great respect to Gerard (Ray) van Schaik, whom I am pleased to say remains as Honorary President, for his outstanding contribution to the development of the EFMD network for more than ten years. And I couple with that Director General and CEO Eric Cornuel and all his team.

So, what now for EFMD? Policies and directions, I believe, should largely be followed as they have been set. And, as it has been in the past, Asia, and especially China, should be one of our biggest endeavours in the future.

Perhaps most notable is the China Europe International Business School (CEIBS) in Shanghai. This notfor-profit joint venture was set up by EFMD in 1994 in partnership with the EC and China’s Ministry of Foreign Trade and Economic Cooperation. It receives financial support from the Municipal Government of Shanghai and the EU and is operated by EFMD and Shanghai Jiaotong University.

I intend to strive to strengthen EFMD’s efforts to bridge the gap between the educational and corporate worlds

CEIBS’ main objective is to contribute to the economic development of China and its business communities through offering management education programmes and it is now recognised as one of the leading business schools in China.

CEIBS benefits from the support of some of the most reputable and successful corporations in China, both Chinese and foreign. These companies provide sponsorship and financial support through regular annual donations, endowed chairs, funded professorships, scholarships and research grants. And, perhaps more importantly, through CEIBS’ Corporate Advisory Board they offer advice and guidance and are used for internships and consultancy projects by CEIBS students. Around 50 companies currently sponsor CEIBS. This brings me to my final point. Wherever it is possible, I intend to strive to strengthen EFMD’s efforts to bridge the gap between the educational and corporate worlds, the latter being a world I know very well.

The corporate world, I believe, has much to learn from being a part of the EFMD network, just as academia has much to learn from business.

The EFMD corporate members’ network connects over 100 international organisations and represents 1,200 professionals and is Europe’s leading forum for exchanging information on management development practice. EFMD also helps its corporate members to design and deliver in-company employee training for their employees while, as mentioned above, CLIP helps them evaluate their management development efforts.

EFMD Corporate Services also runs a number of Workshops, Learning Groups, Special Interests Groups and Online Seminars to exchange practice-based experiences. Increasing the corporate membership of EFMD and encouraging existing corporate members to become even more actively involved in EFMD’s work will strengthen both EFMD itself and all its members.

I began this short article by emphasising the difficult economic and financial times we currently live in. They are indeed challenging for both business and academia. But in EFMD I believe we have an organisation with the strength and commitment to face those challenges.

ABOUT THE AUTHOR

Alain Dominique Perrin is President of EFMD, Executive Director of Companie Financière Richemont, President of EDC, School of Leaders and Creators of Business. He is also Founder of the Institut Supérieur de Marketing de Luxe in Paris and Founder and President of the Cartier Foundation for Contemporary Art. Born in Nantes, France, he is a graduate of Ecole des Cadres.

In 1969 he joined the Cartier Lighter Company as Commercial Attaché before becoming Managing Director a year later. In 1976 he was named CEO of “Must de Cartier”. After the merger of this company with Cartier Jewellers, he rose to the head of the Directorship of Cartier International and Cartier SA in 1981. At the beginning of 1999 he took over the leadership of the Richemont Group, the second-largest luxury goods group, specialising in jewellery, watch-making and accessories across 18 international brands. His interests include contemporary art, wine (he owns the Château Lagrézette, near Cahors, France), and sailing. He is an Officier of the Légion d’Honneur.

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17 EFMD Global Focus | Volume 03 | Issue 01 2009

Page 1

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18 www.efmd.org/globalfocus

The Financial Times’s Della Bradshaw tells George Bickerstaffe that people need to be more relaxed about business school rankings

Top Rank: Della Bradshaw interview by George Bickerstaffe

19 EFMD Global Focus | Volume 03 | Issue 01 2009

The idea behind the FT rankings is to produce a listing of business schools around the world that are producing global managers for the 21st century

S

he has been called the most important woman in management education – and occasionally other, much less flattering, things.

Della Bradshaw, Business Education Editor of the Financial Times in London and for the past ten years overseer of the newspaper’s business school ranking system, is unimpressed by either approach.

include the views of MBA recruiters was not successful.

The idea behind the ranking, according to Ms Bradshaw, was – and still is – to produce a listing of business schools around the world that are producing global managers for the 21st century.

The FT ranking measures three main criteria: the career progression of graduates; the international focus of a programme; and the research capabilities of a business school.

The first makes her guffaw with laughter and the The reasons the Financial Times decided to get second to shrug, suggesting that business schools that involved in ranking appear complicated. react negatively are usually those that actively use their Certainly the then editor, Richard Lambert (now ranking position in their own promotional material. director-general of the Confederation of British Ms Bradshaw takes a down-to earth approach Industry), was keen on the idea and it was something to her job that reflects her Yorkshire background the newspaper believed it could do well. (she was born in Leeds) tempered with a There was also a certain amount of interest from mischievous streak, laughing again when she is reminded of once saying that she was amazed that schools in Europe, especially leading ones, who felt that they missed out on existing rankings anyone took business school rankings seriously. (particularly in North America and particularly “Well I am a Brit,” she says, as if that explains everything. in Business Week magazine), which concentrated “But perhaps it’s not so much taking them seriously as almost exclusively on American schools. a lack of context in how you see rankings. There’s a lot more information available now on websites and so on “It was driven by these two things,” says Ms than there was ten years ago and while rankings have a Bradshaw, “the FT feeling that this was something place and have always had a place I think people should we could do and European schools wanting something that put them on a global stage.” take a more rounded view.”

Certainly, though, the rankings themselves are taken extremely seriously by Ms Bradshaw and her team at the FT. The first ranking was launched in 1999 and ranked 50 business schools on the basis of their full-time MBA programmes.

The methodology for the rankings was developed in-house using the FT’s own research resources (of which it has a lot) plus a panel of eight business school representatives (four from European schools and four from America) to offer advice and suggestions.

An initial ranking the previous year was not used because Ms Bradshaw felt the methodology being used was “too biased”; in particular an attempt to

“Some good ideas did come out of that but we also did some things that weren’t suggested by them,” comments Ms Bradshaw.

20 www.efmd.org/globalfocus

1999 The first ranking was launched in 1999 and ranked 50 business schools on the basis of their fulltime MBA programmes

Somewhat controversially at the time, though the idea has since been followed by others, the ranking also attempted to measure the research capabilities of business schools because “we wanted to find out where the new ideas were coming from”.

Turkey and Japan returning to Britain to write for Electronics Weekly, a trade newspaper, and then joining the Financial Times as a technology writer.

After maternity leave she returned to the FT to launch its business education page in 1995.

The methodology for assessing this has evolved over time and is currently based on faculty publications in 40 selected academic journals.

(Ms Bradshaw is married to fellow journalist Philip Beresford, another inveterate list-maker, who compiles, among other things, the annual “Rich List” of the British wealthy in the Sunday Times newspaper.)

Ms Bradshaw is well aware of the current debate about the relevance or otherwise of academic research into management and business, as displayed not least in the pages of Global Focus.

Couldn’t she include some criteria that would include more practitioner-based research?

During her time at the FT she has been a front-seat observer of some of the major changes in the world of business and management education.

Most significant, she believes has been the relative decline of the American market. Its former dominance “Well we would like to have practitioner journals – has been challenged by the rising numbers and quality but there aren’t any,” she says. “Practitioners don’t of business schools and programmes around the world, want to read that stuff. That’s the dilemma we are in.” she says.

Though often revered and reviled in equal measure Also important, Ms Bradshaw says, has been the by their world, she remains a firm fan of both growing diversity of academic programmes offered business school academics and their students. by business schools, particularly the rise of specialised “I think you can learn new things from them [academics] that you never get from other people you might meet as a journalist,” she says. “They really are people who have thought deeply about things. And there’s an enthusiasm about MBA students that I really like.”

Ms Bradshaw does not have an MBA or other management or business qualification herself but has “quite a good” degree in English from the University of Ulster in Northern Ireland where she studied from the early to mid-1970s – at the height of the sectarian “troubles”, as she notes wryly.

Following graduation she taught English in Sicily,

masters programmes in areas such as finance and pre-experience masters in management programmes.

This is reflected in the rankings now carried out by the Financial Times, which now include separate rankings for MBA, Executive MBA, European masters in management, European business schools and executive education.

Though open to the criticism often levelled at rankings, overall she believes they have had a positive effect on business schools and management education generally.

“I compare them to restaurant reviews,” she says.

“People tend to stick to a favourite reviewer and

In a business school faculty are obviously important but there are also other factors.

The career development department in a business school is clearly critical

21 EFMD Global Focus | Volume 03 | Issue 01 2009

Top Rank: Della Bradshaw interview by George Bickerstaffe

8 The methodology for the rankings was developed in-house using the FT’s own research resources plus a panel of eight business school representatives – four from Europe, four from America

I think the rankings are bit like that. In America, schools tend to concentrate on Business Week.

Outside America it’s more likely to be the FT or the Economist Intelligence Unit.”

Ms Bradshaw agrees, though, that rankings often measure very small differences between schools. That, she thinks, is inevitable.

ranking, in effect the list is made up of several clusters of schools with similar scores but relatively large gaps between the clusters, especially at the top.

“What you find is that the top schools in all our rankings are way ahead of the rest,” she says.

She also points out that ranking business schools is a multi-faceted business.

“I think that what you measure in a business school is different to what you would measure in any other university department,” she says. “For example, a French department is only as good as its faculty.

“In a business school faculty are obviously important but there are also other factors. The career development department in a business school is clearly critical. People go to business school to get a better job. You don’t study Frenchto get a better “There are always going job, it’s more about pure education.” to be lots of schools Ms Bradshaw does not foresee any major changes that are very similar,” to the ranking in the Financial Times in the future. she says. “In countries She thinks they will remain more or less the same, like Britain, where you have a lot of state-funded building on what already exists. universities, that is But, returning to her main theme she emphasises always going to be the the need to keep the rankings in perspective, case. They will all be to look at them in a little more of a relaxed light. on much the same level.

“In some ways I think applicants should be a bit And I think the same is more intelligent rather than just rely entirely on true of most European rankings,” she grins. countries. That’s where it becomes difficult. That’s ABOUT THE AUTHOR where they are likely to move about [in the rankings] George Bickerstaffe is Consultant Editor of Global Focus and a consultant to CEEMAN. He is also author of Which MBA? depending on various factors.”

What happens in rankings, she says, is that while each school is given a an individual place in the

which includes the annual Economist Intelligence Unit ranking of full-time MBA programmes. He has worked for the Financial Times in London, including contributing to the management education page.

22 www.efmd.org/globalfocus

20 20 Vision

A dual strategy for European business schools StĂŠphanie Dameron and Thomas Durand suggest European business schools rethink their strategies to compete with their American counterparts, recommending a dual strategy of catching up with the leaders and differentiating

23 EFMD Global Focus | Volume 03 | Issue 01 2009

2020 Vision by StĂŠphanie Dameron and Thomas Durand

A 60% America now represents only about 22.5% of the world’s economy but it produces over 60% of published articles on management

4m+ It is estimated that business schools train between 4 and 5 million students around the world each year

ccording to our estimate, business schools train around four to five million students in the world every year. The total turnover of this activity represents between $10 billion and $12 billion.

Business schools, be they private or public, are not actually seeking profits but they are looking for additional resources to strengthen their reputation, visibility and influence. Even so, business schools now constitute a real business sector in its own right. And this business is internationalising and becoming increasingly competitive.

Business schools such as Harvard, Wharton or Stanford are maintaining their leading position in the field of management. Behind these prestigious institutions, a myriad of other schools ensure North American leadership over the whole field.

Concepts, theories and renowned authors come from America. So do most management models, handbooks and case studies. A simple number signals this American leadership: America now represents only about 22.5% of the world’s economy but it produces over 60% of published articles on management.

In addition, and even more concerning, this leadership is now reinforced by mechanisms of normalisation in management: the most quoted journals, the ranking systems for institutions and MBA programmes (with the exception of EQUIS) and the criteria that are used are also imported and imposed on us, for better or worse.

As a result, our managerial elites are permanently looking towards America as if it were the management Mecca. And this position has obvious consequences on the way our companies are managed.

24 www.efmd.org/globalfocus

The business model of business schools: Activity in the portfolio Net financial contribution

Undergraduate MBA and Master’s Executive Education Research and PhD prgm Donations / Endowment

- - ~ 0 + + + - - - - + +

Impact on visibility / reputation

Low to moderate Strong Strong Critical Low

Yet, if the world of geopolitics is really leaning towards a multi-polar composition one may legitimately ask whether this could have an influence on the variety of models for management and management education that may co-exist in such a new international setting. We argue that Europe is an obvious candidate to offer something different from the American model of business schools. We further argue that BRICS (Brazil, Russia, India, China and South Africa) and other countries in the world may find differentiated “offers” attractive and may well develop offers of their own.

incentives to do so (though the same can be said of Europe).

The best business schools fiercely compete to attract the best talents. The increasing mobility of their main targets (both students and faculty) forces them to rethink the way they generate their resources. This is what we may call their “business model”.

through donation as a way of recognising the quality of the training that they received. Indeed, some European schools have started to do so.

Indeed, in order to construct their reputation and enable them to attract the best faculty and offer high-quality infrastructures and efficient administration, business schools need a sound business model. These institutions may seem to have the same activity portfolio but they do not all draw on the same amount of resources.

Comparing the business models of American schools with that of those in Europe sheds light on something specific to American culture: donation. A significant part of American business schools’ budgets relies on donations from alumni. American fiscal policy offers

and administrative complexities specific to each country. In the two EU countries that chose to open their market for higherThe explanation for the absence in Europe of education faculty, Britain and the Netherlands, donations from individuals to the school to which they went is rather to be found in cultural wages have significantly increased and are differences. Apart from a few particular examples now well above that of “Latin” EU countries.

Still, they remain greatly inferior to the average such as Sweden and, in some respects, Britain, wages of management or finance professors donations that take place is Europe are closer to charity than gratitude (the idea that “I wanted at a similar level in America. to give back what I received”).

Thanks to the Bologna agreements in 1999 European business schools might want to develop Europe managed to harmonise the structure of its academic programmes (undergraduate – and maintain a new kind of relationship with their alumni and encourage them to contribute masters – doctoral) in a very short time.

However, the earnings remain ridiculously small compared to that of the best American business schools. Changing behaviours will take time; and the sooner one starts the better.

Tuitions and fees represent another significant difference between the US and the EU but things are slowly evolving on this matter.

As higher education is mainly public in most European Union member states, recruitment and career paths for university faculty tend to be national and may even show some form of local preference. This does not help the mobility of talent within the EU. University faculty mobility in Europe is in fact very low. Mobility is also hindered by regulations

We suggest a “Bologna for faculty” in Europe; that is to say, an agreement between EU member states to facilitate university faculty mobility throughout the Union. It would involve creating a job market for researchers and professors in the EU, which would also be open to nonEuropean faculty.

Creating a Bologna agreement for faculty in the EU is no small task. However, in Europe the public system prevails widely, even in business education.

But, paradoxically, when it comes to higher education strong centralised powers can turn out to be a very effective tool for action. Once an agreement is reached between governments, necessary changes initiated by a central power can be quickly undertaken. Europe has managed to harmonise and encourage student mobility. It is time to set free and develop the careers of researchers and faculty as well.

Comparing the business models of American schools with that of those in Europe sheds light on something specific to American culture: donation

25 2020 Vision by Stéphanie Dameron and Thomas Durand

EFMD Global Focus | Volume 03 | Issue 01 2009

Is the American model of business management really relevant to meeting the needs of tomorrow’s corporations in the diversity of different countries’ social and cultural contexts?

The current situation of management education – Europe also has a tradition in “systemic” in Europe is that of a juxtaposition of national thinking, looking at systems in their full systems largely concerned with imitating American complexity rather than analysing their business schools in a catch-up strategy. different parts. In the management field, this systemic approach would permit a move Some institutions are champions at this away from functional silos such as marketing, catching up game. But is it enough? Are we not finance, human resources and so on, thus reinforcing American leadership by agreeing to offering a more transversal perspective on compete following the rules they impose on us organisations. Paris Dauphine University while having, relatively speaking, less resources? was created to develop a transversal view More importantly, is the American model of firms and organisations, involving jurists, of business management really relevant to sociologists, mathematicians, economists meeting the needs of tomorrow’s corporations and, of course, managers. This transversal in the diversity of different countries’ social and and systemic intellectual heritage encourages cultural contexts? At a time when American qualitative and in-depth clinical case studies. business schools question their own model and – As Europeans, we live in a multicultural emerging countries play an important part in the global economy, Europe has the opportunity context. We have the opportunity to to differentiate itself and come up with alternative permanently face other cultures. There management models. is, similarly, a European tradition of studies in intercultural management and the We suggest four ways to develop a differentiation contextualisation of tools and models for strategy for European business schools: management depending on cultural and –E urope has produced great philosophers socio-political environments. This skill is and succeeded in developing excellent often less developed, when it is not schools of thought in sociology. The best completely absent, in North American American management researchers envy education. European business schools this legacy in human sciences and they look have the capacity to train managers how to for inspiration to authors such as Michel evolve in a multicultural environment. This Foucault or Pierre Bourdieu via the few books corresponds to an increasing need in industry. that have been translated into English. As – North America business schools teach Europeans, we have a unique access to the works of such philosophers and sociologists: business based on an economic paradigm this heritage could be better leveraged. relying on market governance with the large

multinational corporation playing a key role.

Entrepreneurship entered the picture only recently. In contrast, Europe has a tradition of combining large firms, SMEs, the public sector and non-profit organisations. Another path towards differentiation for European business schools could be to study all forms of organisations, including the public sector, associations orNGOs. In this sense, management is a broader world than business studies.

In essence, we suggest that European business schools consider revisiting their strategies so that they combine the current race to catch up, playing the competitive game by the rules of the rankings, with a differentiation mode that offers the world, and more specifically the fast-emerging economies of the BRICS, differentiated models of management.

This article is based on Thomas Durand and Stéphanie Dameron’s book The future of business schools, scenarios and strategies for 2020, published by Palgrave McMillan, 2008

ABOUT THE AUTHORS

Professor Stéphanie Dameron is professor of strategic management and organisational behaviour at Rouen University and research fellow at Paris Dauphine University (CREPA-DRM) where with Pierre Romelaer she runs the Strategic Management and Organization masters programme.

Professor Thomas Durand has taught strategic management at Ecole Centrale Paris since 1980. He also taught at HEC, Chalmers, INSEAD and the Stockholm School of Economics. He serves as current president of SFM (French academy of management). He is also Chairman of CM International (strategic management consultancy).

26 www.efmd.org/globalfocus

Testing times Dave Wilson, President and CEO of the Graduate Management Admission Council, talks about strategic alliances, the future of the GMAT and going global. Interview by George Bickerstaffe

Testing times: Dave Wilson interview by George Bickerstaffe

27 EFMD Global Focus | Volume 03 | Issue 01 2009

IMAGE COURTESY: LONDON BUSINESS SCHOOL

260,000 The GMAT is taken over 260,00 times annually, compared to 2,000 when it was first introduced in 1953

D

avid A Wilson (pictured overleaf) became the President and Chief Executive Officer of the Graduate Management Admission Council (GMAC) in 1995.

GMAC was formed in 1953 by nine business schools to develop a standardised test to help business schools select qualified applicants. In the first year it was offered, what became the Graduate Management Admission Test (GMAT) was taken just over 2,000 times; today it is taken well over 260,000 times annually and the Council is governed by 165 of the world’s leading business schools and operates in over 100 countries worldwide.

Dr Wilson, born in Canada, is a Certified Public Accountant and Fellow Chartered Accountant (Canada). From 1968 to 1978, he served as a faculty member at Queen’s University and the University of Illinois, and at Harvard Business School.

Later, and before joining GMAC, Dr Wilson was a managing

partner with Ernst & Young and the chairman of its international professional development committee.

You have been head of GMAC for some 14 years.

What has been your strategy during that period?

When I began with GMAC in 1995 it was clear that it needed three clear focuses: it needed to find a way to become global; it needed better technology; and it needed strategic alliances.

One of the first things we did was to reach out to institutions in Europe and Asia and welcome them into the GMAC

28 www.efmd.org/globalfocus

2013 Dave Wilson President and CEO of GMAC

The next generation of GMAT is planned for launch

So that’s been our strategy for the last ten years at least and one of the first things we did was to reach out to institutions in Europe and Asia and welcome them into the GMAC, which we did in the late 1990s, including EFMD. We spent a lot of time with them learning how we could work together.

Although it’s best known for the GMAT (Graduate Management Admission Test), GMAC is a lot more than just the test. Which do you think are the most relevant areas apart from the test you’re working in?

Well, a lot of it is connected with the GMAT – that is our main area of responsibility. We do a lot of research. We do psychometric research and validity research that is of value to schools that require the GMAT to give them comfort that the test is the most valid assessment they can find.

We also have a search engine, GMASS, which allows schools to search for candidates with certain characteristics, such as score range, who may be the best fit for their programmes. And we have MBA Pathfinder, which is a search engine for potential students to search for programmes that best meet their needs.

Then we have all the survey research we do, including annual surveys of current students, applicants, graduated students and corporate recruiters.

These surveys give us and schools an insight into the market as to what candidates are looking for and expecting and whether recruiters are satisfied that they are getting the right people from the schools.

The basic data is available to anyone but if you are a participating school in the survey then we can customise the data so that an individual school will be able to compare itself with its peers (though it’s all anonymous).

It shows how you compare in terms of your applicant pool, your volumes, recruitment and so on.

You mentioned strategic alliances earlier and EFMD is a key partner for you. How would you characterise the relationship, is it co-operation, competition or a mix of both?

I don’t think there’s a lot of competition. There is a lot of mutual respect for what each institution brings to the table and for their respective

visions and missions. Both institutions have at the core of their beliefs that quality is an imperative if we are going to change society through education.

Each organisation also has its own focus. EFMD’s focus is on the institution and accreditation of the institution, on curriculum delivery, on faculty. Our focus is very much on the admissions portion and on the administration side of it But we both gain a lot from the relationship, I think. GMAC gains an insight into and understanding of the accreditation process and also insight into markets. You are basically leveraging each other’s knowledge of different sectors of the market.

For example, we have been doing a lot of work with EFMD on how to lower the barriers to would-be applicants in Eastern Europe taking the GMAT. I don’t know that we have all the answers yet but we will get there.

We also have a lot of data that is of value to EFMD member schools, not all of which are members of the GMAC network. It’s of great value to us to have these schools participate in our surveys and other programmes.

And having an office here in London now makes it very much easier to be in touch with them. There’s a great complementarity and synergy between us.

We also have similar relationships with AACSB International and AMBA but the link with EFMD is probably the most developed in terms of sharing and partnering.

The global economy is, to say the least, not in great shape at the moment. Downturns are usually in fact good for MBA and masters applications and for GMAT takers. Is that the current case?

Well, yes. The numbers taking the GMAT tend to be counter-cyclical – they go up when the economy goes down. And we expect 2008 to be a record year for test-takers. And we are forecasting a strong period for applications to MBA and specialist masters programmes through 2009.

Testing times: Dave Wilson interview by George Bickerstaffe

29 EFMD Global Focus | Volume 03 | Issue 01 2009

IMAGE COURTESY: GMAC

The numbers taking the GMAT tend to be counter-cyclical – they go up when the economy goes down

Basically I think people see spending a year or two in a graduate management programme as a good way to ride out a recession. One of the big costs of these programmes is the opportunity cost of foregone salary and promotion opportunities. If these aren’t so strong then business school is good place to be. And of course the recession may be over when you graduate.

But recruitment opportunities can’t be very good?

The media pays a lot of attention to the financial services industry but it only hires a small proportion of graduates in management education – a lot of graduates go to conventional industry and to the professions.

According to our recruiter survey, while you’re certainly seeing a softening in financial services you are also seeing substantial growth in the accountancy profession, information services, pharmaceuticals and health care in general. You’re also seeing growth in the public sector.

These are all areas that may well pick up any recruitment slack.

But that remains to be seen and I would be foolish not to say that these are going to be challenging times for graduate recruitment, this year and next for certain.

Do you plan to change the GMAT in the future?

We are looking at two areas right now. The first is the relevance of the GMAT as a way of assessing students for pre-experience graduate programmes like a masters in management or a specialised masters programme.

We are currently carrying out research on this with Cito [based in the Netherlands, Cito is one of the world’s leading testing and assessment companies] to establish whether pre-experience programmes warrant their own assessment test or whether the current GMAT has validity in that area. So before we jump off and create a new test we want to find out whether it’s necessary.

The other area is in non-cognitive assessment. Can you devise a test that predicts leadership potential, for example? That’s an area that a lot of our schools have been looking at and asking about. We have done a lot of

research with schools on this and around five years ago we decided that we couldn’t do it effectively at that time. However, we are now taking a fresh look at this.

And on January 1, 2013 we will be launching the next generation GMAT. Beyond that I can’t tell you much, mainly because there are so many possibilities and options open. We have a group working on it now and we think the process will take at least four or five years to fully achieve our goals.

As President and CEO do you feel a sense of responsibility, or stewardship, for the GMAT? Actually, that’s a question that I reflect on often. This calendar year (2008) almost 270,000 people will have taken the test in over 100 countries and that test has the ability to change their lives.

That’s an incredible responsibility. You have to ensure that in every way possible your test is fair and that no one candidate is disadvantaged or advantaged unfairly. So there are times when you end up making some very tough calls.

How do you see GMAC in five or ten years time?

I think we will have a significantly increased presence in Europe, the Middle East and Asia, beginning with Europe. We are still learning about the Middle East but in that time frame I wouldn’t be surprised to see an Asian operation like the one we now have here in London.

We will certainly be partners with Pearson in the launch of the Pearson Test of English (PTE), which will be launched around the world in October 2009. It is an exciting test because it’s going to include an audio clip of the candidate actually speaking. And in five to ten years time we’ll have a video clip.

So we will be a global presence. I’d like to think we’d be expanding our range of assessments to include things like the non-cognitive skills I mentioned earlier. And I hope that our membership will include schools from all over the world.

And, of course, the partnership with EFMD will go from strength to strength!

30 www.efmd.org/globalfocus

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n November 19, 2009 it will be 100 years since Peter F Drucker was born in Vienna – then capital of the Austro-Hungarian Monarchy. Drucker passed away three years ago, on November 11, 2005, in Claremont, California. He is generally referred to as the “father of modern management”. Yet, it appears that his importance as someone who thought about management in a broader social perspective is not widely understood. In today’s increasingly complex and crisis-ridden world we need that orientation more than ever.

Richard Straub sums up the lifetime achievements of the late Peter Drucker, the ‘father of modern management’, the centenary of whose birth occurs this year

Reaching out – coming home A time to rediscover Peter F Drucker Can we expect help from Drucker’s thinking in coping with the challenges for 21st century management, in particular with regard to its role, its legitimacy and its responsibility? His 100th birthday may be a unique opportunity - not only to remember him but also to perceive him in a new light and to learn from his perspective on management and society.

A conference organised by the Peter Drucker Society of Austria in partnership with the EFMD and other institutions will provide a forum for dialogue and reflection on these questions.

IMAGE COURTESY: DRUCKER INSTITUTE, CLAREMONT GRADUATE UNIVERSITY

Reaching out – coming home: A time to rediscover Peter F Drucker by Richard Straub

31 EFMD Global Focus | Volume 03 | Issue 01 2009

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He elevated management from mere incidental practice to a “discipline”. Yet, he does not fit into the mould of mainstream management gurus, academics or consultants. He was unique in his “unscientific” approach and in his holistic perspective. Also his longevity – not only in the physical sense – seems to be unique. In 1997 Forbes magazine featured Drucker on the cover under the headline “Still the Youngest Mind” – he was then 88 years old.

Most of Drucker’s books still appear to be relevant and “young” today – even those written some 50 years ago. This puts him in marked contrast to many of the management bestsellers of recent decades.

Take management classics like The Practice of Management (1954) or The Effective Executive (1966): you will still find them on the “active” bookshelf of many executives. Newt Gingrich, while serving as Republican Speaker of the House in America, even made The Effective Executive required reading for every newly sworn-in representative –a practice that should be considered for the European Parliament and the European Union member states assemblies.

However, there are Drucker titles that have not made it into the managerial mind on a broad basis, even though they were laying the wider foundations for his management thinking. Yet these books may contain the key to what makes him so different.

by Winston Churchill, who praised the book and its author in the Times Literary Supplement and made it a required reading for his officers.

Seeing the future before it is seen by others Drucker also stands out in his ability to identify emerging trends and developments. Far from being a futurist, he could actually grasp the future.

“I never predict,” he told a journalist at Forbes.

“I just look out the window and see what’s visible - but not yet seen.” Thus he was a master in deciphering and interpreting emerging patterns.

He took a wider and deeper perspective on major social trends. One of the most striking examples of his ability to identify major shifts in the economy and society way ahead of others: it was as early as 1957 in Landmarks of Tomorrow that he pointed out the increasing importance of knowledge work, knowledge capital and knowledge jobs.

He elaborated more deeply on the characteristics of the new breed of knowledge workers in The Age of Discontinuity in 1968. Later in his life he launched a challenge to 21st century management to increase the productivity of knowledge work – to create a similar surge in productivity as had been achieved for manual work in the 20th century.

Management as a role in society In Drucker’s perspective management does not appear as a limited subject for its own sake but related to a bigger cause. He described the 20th century society as a society of institutions and organisations.

Organisations took over virtually all key roles in society and often stretched far beyond the borders of the territory of the state and the influence of governments. They became increasingly powerful and influential – be it corporations, Take early works such as The End of Economic government institutions or important nonMan (1939) or The Future of Industrial Man (1942) profit organisations. Hence they had become with their deep analysis of modern industrial the key building blocks of modern societies. society outlining the path towards a “functioning From this perspective he inferred the vital society”, which he further elaborated in later books such as The Post-Capitalist Society (1991). importance of management. Management is the organ and the tool for high-performing These books were highly regarded and influential and self-governed institutions in every sector. at the time they were published. Drucker’s analysis Consequently effective management and in The End of Economic Man, denouncing the failure of capitalism and socialism to create the professional managers became a central foundation for a functioning society, was reviewed concern and focus for Drucker in his lifelong

IMAGE COURTESY: DRUCKER INSTITUTE, CLAREMONT GRADUATE UNIVERSITY

Beyond the fashion of the day There is no doubt that Drucker had a defining influence on the managerial mind in the 20th century. He called himself a writer and authored more than three dozen books and countless articles and essays.

‘I never predict,’ Drucker told a journalist at Forbes. ‘I just look out the window and see what’s visible – but not yet seen’

Reaching out – coming home: A time to rediscover Peter F Drucker by Richard Straub

33 EFMD Global Focus | Volume 03 | Issue 01 2009

inquiry – including questions relating to effectiveness, legitimacy, managerial power, responsibility and accountability.

He never had the slightest doubt that “management is most and foremost about human beings and that one of the key task of the manager was to make people capable of joint performance, to make their strength effective and their weakness irrelevant” (from The Essential Drucker).

Drucker had hoped that management would live up to its responsibility. His experience with corporate behemoths like General Motors, IBM, GE and others in the 1940s and 1950s confirmed him in his conviction that management can contribute to the common good by running a business in a professional way.

Alfred Sloan, then Chairman of GM, became Drucker’s hero of a corporate leader with a deep sense of responsibility not only for his role as a business man, but also as a human leader who cared for the well-being and livelihood of the workers entrusted to the corporation.

This is why Drucker put all his energy into making management a better instrument to help executives fulfil this responsibility. This meant to move management from a mere incidental practice towards a well defined, systematic and organised “discipline”.

Management is the organ and the tool for highperforming and selfgoverned institutions in every sector

But the development of modern management is also the story of Drucker’s own rising disenchantment with capitalism, which in the late 20th century seemed to reward greed as easily as it did performance.

He was sickened by the excessive riches awarded to mediocre executives even as they slashed the ranks of ordinary workers. Today we can relate all too well to a statement he made in an interview given in the late 1980s. “In the next economic downturn there will be an outbreak of bitterness and contempt for the super-corporate chieftains who pay themselves millions.”

The doubt and disillusionment with business that Drucker expressed in his later years caused him to turn away from the corporation and instead offer his advice to the non-profit sector.

European influences Drucker is widely perceived as an American management thinker. It is true that he spent most of his adult life in America. However, the European

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IMAGE COURTESY: DRUCKER INSTITUTE, CLAREMONT GRADUATE UNIVERSITY

roots and influences must not be ignored. He Frankfurt, Berlin and London provided Drucker grew up in Vienna and at the age of 18 he moved to with a solid intellectual foundation. His thinking Germany to work in Hamburg and then Frankfurt. was grounded in a coherent world view that At Frankfurt University he enrolled in law studies encompassed all dimensions of human existence and got his doctorate with a dissertation on the including the religious and spiritual ones. Hence he was always hostile to a reductionist perspective, historical and philosophical foundation of international law. Upon the rise to power of the making humans mere cogs in a money-making Nazis he left Germany for Britain, where he had machine.

Peter Drucker had impact on all advanced industrial economies in the 20th century

His personal experience in the 1920s and 1930s with the catastrophic failures of business and economic management and politics, which ultimately prepared the ground for the rise of the Nazis, deeply influenced him and strengthened His way of inquiry and his holistic and his conviction that good management is not only multidisciplinary perspective are rooted in his formative years in Europe. His home in suburban essential for the individual company to succeed Vienna, until 1918 the capital of a multinational but for its contribution to the economic and political stability of the wider community. and multicultural empire of some 50 million people, was indeed an intellectual power house Reaching Out – Coming Home, at the time. the Centenary Event in Vienna Peter Drucker had impact on all advanced Before the catastrophes and cataclysms of the industrial economies in the 20th century. In first world war, the Depression and the rise of the 1950s he had a profound influence on how the Nazis, Vienna was a cosmopolitan melting American corporations organised and operated: pot with an incredible level of cultural and decentralisation, federal organisations and intellectual density and diversity – some of management by objectives had become the the world’s leading minds in the fields of dominant mantra in corporate America, based economics, philosophy, architecture, fine arts, on Drucker’s analysis of General Motors in The medicine, literature, mathematics, law and other disciplines made Vienna a unique venue. Concept of the Corporation (1946).

Guido Stein, Peter Gomez and Hermann Simon who have built on Drucker’s thinking to make their own mark on modern management in the sense of a specific European model. Peter Paschek co-authored a book with Drucker in 2004. Yet, Drucker may not have entered into the collective management mind in Europe as he did in America and in Japan.

Public cafes and private salons were the places where dialogue and discourse between the disciplines was thriving.

Joseph Schumpeter, yet another giant of Austrian origin and friend of the Drucker family with a significant influence on Drucker’s own thinking, taught him that it may be more important to ask the right questions than to pretend to have all the answers. Peter Drucker has given us both – huge questions for the 21st century and the reasoning to find the right answers.

the opportunity to attend the famous seminars of John Maynard Keynes. In 1937 he emigrated to America with his German-born wife Doris, whom he had married just days before.

He was venerated in Japan as in no other place as a prophet and an uncontested authority. With more than one million copies sold, The Practice of Management exemplified how avidly the The Drucker home was one of the important intellectual meeting places in Vienna, where the Japanese managers took up his thinking and young Drucker had the opportunity to experience how deeply he marked their minds with a view such eminent personalities as Joseph Schumpeter, of the corporation as a human community.

Ludwig von Mises, Othmar Spann, Sigmund In Europe, the picture is somewhat spotty. There Freud, Thomas Mann and Friedrich von Hayek. are strong and visible European followers such His early years in Vienna and his time in Hamburg, Charles Handy, Fredmund Malik, Peter Lorange,

This is why it is a perfect moment to take Peter Drucker back to his original “home” and to launch a broad European dialogue on the foundations of management in view of the current and future challenges. Vienna, as his place of birth and of his upbringing, will take pride in hosting a unprecedented event for one of its greatest sons and to attracting the highest-calibre management experts from all over the world. It will be a unique event in many ways. There is no period when a profound reflection on management and its impact would be more appropriate.

ABOUT THE AUTHOR

Richard Straub is Director of Development, EFMD, and President of the Peter Drucker Society of Austria

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35 EFMD Global Focus | Volume 03 | Issue 01 2009

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Business school strategy and the metrics for success Howard Thomas presents a framework for a systems perspective for business schools to formulate strategy, assess performance and adapt to change

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usiness schools have gained strong recognition over the last 100 years. Despite the fact that US schools continue to dominate the global business school landscape, formidable competitors sensitive to local market needs now exist in Europe, Asia and Latin America.

However, with recent increasing competition in the business school environment, there has been a parallel and quite critical discussion about the nature, value and relevance of business schools.

Critics have simultaneously accused the business schools, inter alia, of: – doing irrelevant research – being too market-driven and pandering to the ratings – failing to ask important questions – pursuing curricular fads – “dumbing down” course content – focussing more on specialist, analytical rather than professional managerial skills Given this increased criticism and competition, it is important for business schools, and their deans, to be clear about their strategy, strategic positioning and alignment to the competitive environment.

The strategy map The strategy map (Figure 1) is a framework both for thinking about policy and strategy and a vehicle for carrying out a dialogue about strategic options in any business school context.

This map is a system model and a thinking framework that ranges from the setting of a business school’s overarching direction and the design of its strategies and programmes to the processes of learning, feedback and strategic renewal. Each stage in the diagram encompasses a set of issues and, typically, invites a specific question from an overarching direction (where do we want to be as a business school?) to measures of performance (how do we check business school performance relative to the set of school goals?).

Given the importance of organisational performance in the strategic systems perspective, the next section focuses on potential measures of a school’s performance.

Figure 1 A systematic model of strategy ADVISORY BOARD

UPPER MANAGEMENT

FIRST LINE MANAGEMENT

TOP MANAGEMENT

MIDDLE MANAGEMENT

ALL

Overarching Direction Values Mission Vision

Strategic Thinking Analysis Cometitive position Broad strategies

STRATEGIES The Strageic Framework

Strategic Decision Making

Implementation

Rules Schedules Goals and metrics Resource allocation Planning Priorities

Actions Tactics and execution Procedures

Domain of financial performance

DATA AND INSIGHT= KNOWLEDGE MANAGEMENT

External Environment

Internal Environment

Operational Results

Customers Markets Competition Societal Norms Regulation Technology

Cultural / History Results Compentencies Resources Ideas New Strategies

Scorecards Process Goals Financial Statements Achievements LEARNING AND FEEDBACK

CONTINUOUS RENEWAL

Domain of organisational effectiveness

CONTINUOUS RENEWAL

Domain of financial + operational performance (business performance) PERFORMANCE METHODS

Incentives Salaries Commission Bonuses Recognition

Business schools have also recognised the need to generate strategic Balanced funds through external Scorecard fundraising in order to build endowments for research, teaching and faculty support activities Translating the Vision – clarifying the vision – gaining consensus

Feedback and Learning – articulating the shared vision – supplying strageic feedback – facilitating strategy review and learning

s to performance measures

Business Planning – setting targets – aligning strategic initiatives – allocating strategies – establishing milestones

Measures of business school performance FINANCIAL In the literature on organisational performance three broad categories are typically “To succeed financially how should we appear to our shareholders?” identified (Figure 2): Objectives Measures

Source: Venkatraman and Ramaujam (1986, p.803) Domain of financial performance Domain of financial + operational performance (business performance)

CUSTOMER – organisational effectiveness.

“To achieve our vision how should

INTERNAL BUSINESS PROCESS “To satisfy our shareholders and customers what business processes must we excel at?”

we appear to our customers?”

Examples of each of the performanceVision categories and in a business school context are: Objectives Measures

Targets

Objectives Measures

Initiatives

Targets

Initiatives

Strategy

– financial measures – profitability, financial surplus, level of endowment funding – operational measures – faculty quality, student quality, research quality, teaching LEARNING AND GROWTH quality, programme efficiency, measures of market positioning “To achieve our vision how will we sustain our ability to change and improve?”

– organisational effectiveness – league table rankings, reputation, student satisfaction, employer satisfaction, accreditation Objectives Measures

Targets

Initiatives

Clearly, a high level of financial performance creates funds for a business school dean to invest in strategic investments such as new faculty, software development and ADVISORY BOARD UPPER MANAGEMENT FIRST LINE MANAGEMENT research activity. Also, the reduction of government funding in higher educationALL TOPsevere MANAGEMENT MIDDLE MANAGEMENT worldwide has made the generation of these financial surpluses an important Overarching Direction Strategic Thinking STRATEGIES Strategic Decision Implementation management issue, not only for business school deans but also for university viceMaking The Strageic chancellors and presidents. Analysis Values Framework Rules Actions Cometitive position

Schedules

Broad strategies Goals and metrics Increasingly, Vision business schools have also recognised the need to generate strategic Resource allocation Planning funds through external fundraising in order to build endowments for research, Priorities teaching and faculty support activities.

Currently, American business schools have been much more successful at this and the increased money made available has allowed certain elite American schools that have built endowment “mountains” (for example, Harvard and Wharton) to further DATA AND INSIGHT= KNOWLEDGE MANAGEMENT increase their academic External quality,Environment branding and competitive positioning in the marketplace.

Internal Environment Operational Results

Customers Cultural / History Scorecards Business schools constantly examine the efficiency and effectiveness of their operations.

Markets Results Process Goals Competition Compentencies Statements Faculty recruitment and retention in an environment where there is Financial a shortage of Societal Norms Resources Achievements Regulation Ideas suitably qualified doctoral faculty is an important issue for many schools.

The quality Technology New Strategies Incentives of faculty is also a critical element for attracting high-quality students who can, in turn, Salaries stretch the faculty in their teaching and research activities.

Commission LEARNING AND FEEDBACK

Bonuses

In many countries research and teaching performance are monitoredRecognition and reviewed

Tactics and execut Procedures

PERFORMANCE METHODS

Domain of organisational effectiveness

Initiatives

– operational performance

Mission

Figure 2 Domain of business performance

Targets

– financial performance

CONTINUOUS RENEWAL

and Linking g and advocating

37 EFMD Global Focus | Volume 03 | Issue 01 2009

Business school strategy and the metrics for success by Howard Thomas

n

Salaries Commission Bonuses Recognition

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Figure3 Translating vision and strategy – four perspectives

What the basic concept of a balanced scorecard provides is a disciplined framework through which to impose a series of questions that should be addressed by the business school

Feedback and Learning – articulating the shared vision – supplying strageic feedback – facilitating strategy review and learning

Source: Kaplan and Norton (1996, p.54) FINANCIAL “To succeed financially how should we appear to our shareholders?”

Objectives Measures

Targets

Initiatives

CUSTOMER “To achieve our vision how should we appear to our customers?”

Objectives Measures

Targets

Initiatives

INTERNAL BUSINESS PROCESS “To satisfy our shareholders and customers what business processes must we excel at?”

Vision and Strategy

Targets

Initiatives

LEARNING AND GROWTH “To achieve our vision how will we sustain our ability to change and improve?”

Objectives Measures

tives

Objectives Measures

Targets

Initiatives

s

by government agencies. Such government-produced ratings are widely examined by potential students and evidence of excellence is trumpeted on business school websites. League table rankings of business schools routinely provided by publications such as Business Week, The Economist, Financial Times and Wall Street Journal are another important measure of customer satisfaction.

Attestation of school quality for external constituencies (such as employers and students) is further provided by accreditation agencies such as the Association to Advance Collegiate Schools of Business (AACSB International), the European Quality Improvement System (EQUIS) of the EFMD and the Association of MBAs (AMBA).

the internal business processes necessary to develop a successful strategy: metrics would include supply-chain processes, research quality, teaching quality and so on.

– How can we continue to improve and create value? (the innovation and learning lens): metrics in this area address a school’s ability to innovate and develop new capabilities through research, new product growth and development, and improved funding opportunities.

Checklists of measures, however, beg the question of what the best set of measures or key performance indicators (KPIs) are for any specific business school.

Fundamentally, important KPIs must link to the overall strategy and The key management question with the strategy map, therefore, is how to vision and track/monitor the key elements of that strategy. They must translate the strategic framework into a financial, operational and organisational also take account of any changes in the broader economic and technological measurement scheme that links strategy to organisational goals. environment the school faces.

The balanced scorecard framework discussed in the next section offers The KPIs chosen should be regarded as a future-oriented set of metrics an appropriate model for “piloting” the strategy of an organisation across that will allow a school to benchmark and monitor economic and competitive a range of indicators of organisational performance and adjusting its outcomes and examine the stability of its strategy (the long-term perspective) “flight path” in order to improve future performance. and operations (the short-term perspective).

The balanced scorecard framework The strength of the balanced scorecard approach is its inclusivity of the The balanced scorecard allows managers to examine each area of the range of strategy concepts and the way of linking them together in a single organisation and the overall corporate vision and strategy through four map (Figure 4). perspectives or lenses: financial; customer; internal; and innovation and There is strength also in the way in which measurable KPIs are used to learning. Figure 3 shows the logic of the approach.

What the basic concept of a balanced scorecard provides is a disciplined ground the map in reality and to make it an operational tool for managers. framework through which to impose a series of questions that should be But this is also its weakness. Not all elements of competitive strategy are easy to measure although many schools have strategic planning processes addressed by the business school: that make a heroic attempt to do this.

–H ow do we look to stakeholders, particularly university presidents More difficult is the area of management process, which provides an essential or vice-chancellors? (the financial lens): metrics in this area include grounding for strategy analysis decisions. Without good or appropriate accounting-based measures of profitability and surplus generation process, good decisions cannot be made – decisions do not make themselves.

– How do customers see us? (the customer lens): metrics in this area include market-share, brand image, and student, alumni and employer satisfaction

This is a controversial area that will benefit from progress on two fronts: better conception and measurement of KPIs; and better linkage of strategy – What must we excel at? (the internal lens): the issues in this area involve process elements to strategic decisions.

39 EFMD Global Focus | Volume 03 | Issue 01 2009

Business school strategy and the metrics for success by Howard Thomas

Figure 4 The balanced scorecard as a strategic management system

The strength of the balanced scorecard approach is its inclusivity of the range of strategy concepts and the way of linking them together in a single map

Translating the Vision – clarifying the vision – gaining consensus

Communicating and Linking – communicating and advocating – setting goals – linking rewards to performance measures

Balanced Scorecard

Feedback and Learning – articulating the shared vision – supplying strageic feedback – facilitating strategy review and learning

Business Planning – setting targets – aligning strategic initiatives – allocating strategies – establishing milestones

The balanced scorecard and strategic alignment The balanced scorecard has evolved into a strategic management system, linking long-term strategic objectives with short-term actions, that involves a set of four management processes that interact to enable the management of the strategic balance between short-term productivity objectives and long-term growth perspectives.

scorecard approach offers a framework, a model and a series of performance indicators that can be used by deans and members of their senior management teams as vehicles for policy dialogue and debate about strategy options and as the focus for thinking about strategic adaptation as circumstances change.

achieve long-term strategic objectives at the business unit level.

This is an edited version of an article that first appeared in the Journal of Management Development, Vol. 26 No. 1, 2007, pp 33-42, Emerald Group Publishing Limited. The current issue and full text archive of this journal is available at www.emeraldinsight.com/0262-1711.htm

In essence, the strategy model is the framework around which a school’s strategy emerges, evolves and changes over time as a living and dynamic The first of these processes is that involved in the translation of the vision process. and strategy statements using the model shown in Figure 4 so that they Specifically, the following elements of the approach are important: form a clear and well-understood set of objectives and measures that are –T he strategy map (Figure 1) provides the framework for strategising agreed and endorsed by all senior managers. about the business school’s system dynamics The second process – communicating and linking – requires deans to – The balanced scorecard is a means of monitoring, evaluating and discuss and communicate their strategy throughout the school and link controlling the evolutionary path of a school’s strategy and strategic that strategy to departmental and individual objectives. positioning. It may highlight performance gaps or areas of activity requiring immediate strategic attention The third of these processes – business planning – provides a basis – Performance gaps and weaknesses force continued attention on the for the integration of programme and financial plans. Since the balanced processes of strategic dynamics and change, highlighted both on the strategy scorecard links strategy to KPIs, senior managers can use the scorecard map (Figure 1) and the revised balanced scorecard model (Figure 4). measures and associated goals to allocate resources and set priorities to The fourth of these processes – feedback and learning – allows a school to use feedback from the balanced scorecard and benchmarking processes to provide an insight into, and evaluation of, existing strategic positioning.

Thus, strategies can be changed or re-oriented to take account of the learning and feedback achieved by the school and the faculty.

The balanced scorecard in this context can be viewed as a systems dynamics model that provides a comprehensive, quantified model of a school’s value proposition and enables the corporate strategy and vision to be continually refined and reviewed. This point is examined further in the next section.

Discussion and conclusions It is important to recognise that the strategic management approach presented here is not put forward as a “one-size-fits-all” strategic approach for all business schools irrespective of the context and environments in which they operate.

However, the main proposition of the paper is that the strategy map/balanced

ABOUT THE AUTHOR

Howard Thomas is Dean of Warwick Business School in the UK, a frequent Guest Editor of the Journal of Management Development and a member of the Advisory Board of Global Focus. He is the current Chair of the Association of Business Schools in the UK and the Vice-Chair, Chair Elect of AACSB International.

The author wishes to thank his colleagues John McGee and David Wilson, who have influenced his thinking and writing on the topic of this article. The author gratefully acknowledges their ideas and insights about strategic management and their important contributions to this article.

Howard Thomas can be contacted at: Howard.Thomas@wbs.ac.uk

40 www.efmd.org/globalfocus

How culture can ma ke sense of mana gement

Harvesting the ideas that qualify as ‘good fruit’ is something that can be applied to all levels of society and to every member of the population but one sector that has a central role to play is education

How culture can make sense of management by Jean-Pierre Helfer

41 EFMD Global Focus | Volume 03 | Issue 01 2009

[What] EFMD has succeeded in doing via its EQUIS accreditation system is to raise the quality of worldwide business education by setting out required standards

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usiness students need to understand the basics of management but if they are to appeal to today’s recruiters they must also have a wider vision says Jean-Pierre Helfer.

and drawing on other experiences, theories and worlds can significantly aid decision making. To achieve this, business students – and the managers they later become – need to have a solid cultural background that can give sense to all their actions.

In the first century AD, the Roman philosopher Seneca put to paper a piece of wisdom that is as true today as it was in his own time: “The mind, without culture, can never produce good fruit”.

One thing that EFMD has succeeded in doing via its EQUIS accreditation system is to raise the quality of worldwide business education by setting out required standards. Any management school that wishes to be a serious player on a global scale must prove its worth by meeting the conditions mapped out by the accrediting body. More and more schools are now doing this.

Harvesting the ideas that qualify as “good fruit” is something that can be applied to all levels of society and to every member of the population but one sector that has a central role to play is education. Following Seneca’s lead and taking the horticultural image a stage further, education providers apply the fertiliser of general culture so that their pupils and students blossom.

This approach is already widely accepted as the basis of general education, where the aim is to nurture a wide-ranging interest in everything from cookery to chemistry and from Spanish to sport.

But what of management schools? By definition, their job is to teach such classic fields as accountancy, finance, strategy and marketing, as well as “softer” subjects such as leadership or negotiation. However, those who support this traditional approach are missing one very big point.

While it is true that any question or problem, even the most complex, can be answered to a greater or lesser degree using purely “technical” knowledge, this approach leaves a lot to be desired.

Looking at an issue from a critical distance, considering it “in the round”,

As a result, the knowledge imparted by business education programmes is becoming increasingly harmonised. On a purely academic level, students know they will be getting basically the same course content at comparable schools. Faculty may vary but the core is constant. Classes in the recognised hard and soft skills will always be there. This being the case, how does a school make itself stand out from the crowd while still respecting the norms?

Seneca gave us a valuable starting point from which to address this question. Classes in all the areas a manager needs to master are naturally essential for a business school student. But a liberal sprinkling of culture needs to be added to the blend. It is not that a future manager must be an expert in the history of theatre or in Russian 19th century literature. But exposure to such cultural elements fosters the type of personal profile so prized by recruiters. Students become rounded individuals,they develop as people and they keep a very healthy sense of perspective.

42 www.efmd.org/globalfocus

In support one need look no further than the high-profile recruiters who took part in a survey conducted by some faculty at my own institution, Audencia Nantes School of Management in France.

The faculty involved sounded out the views of 15 major international companies on what qualities they looked for in managers. While the results of these interviews formed the qualitative part of the team’s research, the quantitative side involved an email questionnaire sent to recent alumni.

When these qualitative and quantitative elements came together the overriding message was that it is behavioural rather than “technical” competencies that recruiters value most. While all candidates who have studied business are assumed to possess the necessary skills in the classic business school disciplines, what makes the difference for recruiters is their behaviour at work. The alumni who responded were aware of this expectation. Only 12% cited technical competencies as the field where they would like to develop in the future.

For recruiters, the most highly valued competence comes as little surprise: over 80% of the companies questioned cited the capacity to manage as top of their wish list. Just behind this, however, comes a series of personal qualities that are notoriously difficult to address through lectures.

For example, 75% of the recruiters spoke of the need for humility and the ability to listen. The same percentage cited communication and relational skills while over half of the firms valued characteristics such as desire, passion or adaptability. A third of those questioned even listed charisma and personality as of utmost importance.

Any s What these results clearly show is that business graduates now need to c a to u h o ol tr y i n possess more than an in-depth knowledge of management methods to g succeed. It is one thing recognising this need, but quite another ment h time try g to teach ion st h i to be able to respond to it. n u g m to c o n ility w udent v s, of th i i Any school trying to teach humility will have a tough e valid nce facult ll have time trying to convince faculty, not to mention students, y, not ity of of the validity of the approach. t the ap o proac The situation becomes even more complex when recruiters h express a desire for naturalness and spontaneity in young business graduates yet value highly other characteristics such as displays of enthusiasm. If a young manager does not show natural enthusiasm for a project should he or she then “fake” enthusiasm and so sacrifice naturalness?

While meeting recruiters’ expectations is a serious challenge for management schools, it is one to which they must rise if they are to foster confidence among companies. Cultural and individual development has to be embraced. In this way, culture becomes the mortar that allows the bricks of managerial knowledge and personal skills to form a whole.

It therefore contributes to a global, well-informed view of the sort of complex questions facing business today.

43 EFMD Global Focus | Volume 03 | Issue 01 2009

How culture can make sense of management by Jean-Pierre Helfer

For recruiters, the most highly valued competence comes as little surprise: over 80% of the companies questioned cited the capacity to manage as top of their wish list

12%

80% Only 12% of business school alumni cited technical competencies as the field where they would like to develop in the future

Of course, managers need to master human resources, accountancy and the like but what gives them real weight is a parallel knowledge of subjects such as philosophy, sociology, geography or history.

The motto for this sort of approach could be “making sense of management”, a slogan with a high profile at Audencia. In practice, this means putting management into its proper context and so encouraging the sort of critical distance that helps keep a sense of perspective.

To an outsider, a module on German cinema or a conference on arms escalation may seem outside the remit of a business school. But the key here is the ability to see the wider picture.

75% of the recruiters spoke of need for humility and the ability to listen. The same percentage cited communication and relational skills

75%

Once adopted, this logic of offering something other than traditional business subjects can give birth to other exciting initiatives.

This year, for the first time, students choosing our management of cultural institutions study track can spend a week at Sotheby’s Institute of Art in London visiting auctions, galleries and museums while following classes in areas such as art business or corporate sponsorship of the arts. The same group also goes to Bilbao in Spain for a study week in order to analyse the success of the city’s cultural policy symbolised by the Guggenheim Museum.

Back on campus, non-management debates and conferences can also A student whose head remains buried in management books will obviously stimulate students. A policy of inviting writers, philosophers, sociologists have a very limited vision. Needless to say, a manager with a lack of vision and psychologists to address future managers can encourage a high level of intellectual curiosity. risks making the wrong decisions.

Schools can encourage this spirit of openness in a number of ways.

One of the more traditional means is to include non-business subjects such as those mentioned above in the curriculum. However, simply creating lectures in art, literature, history, media and the like is not enough. Students have to then attend them and get something from them. Such cultural modules should be compulsory and transversal, sending the right message to the managers of tomorrow. Students must be aware that the results achieved in such subjects count so that these non-business classes are not considered as an unnecessary distraction.

However, obliging students to attend these lectures does not mean that they are seen as an uninspiring duty. In my experience, these nonbusiness classes are hugely popular and are often cited as one of the reasons why my own school is the French institution that receives the most applications for its Masters in Management programme.

Subjects covered by such events at Audencia include “How to live in today’s world”, “The Middle-East powder keg” and “National identity and diversity.” Students are not tested on these topics; the debates do not form part of the syllabus. But each person leaves the auditorium with a new angle on the world in which we live and work.

In a world where business is often portrayed as a mercenary, purely profit-motivated activity, schools can lead the way in a movement to “make sense of management”. It is their alumni who will shape the nature of business in years to come. Making culture an integral part of the management education experience is vital. Let us hope the future harvest will be abundant.

ABOUT THE AUTHORS

Jean-Pierre Helfer is Dean of Audencia Nantes School of Management, France.

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Europe’s agenda for improving research training and doctoral education Thomas Jørgensen outlines the actions needed to ensure doctoral education meets Europe’s needs

Europe’s agenda for improving research training and doctoral education by Thomas Jørgensen

45 EFMD Global Focus | Volume 03 | Issue 01 2009

Public authorities should also be doing more to make sure funding is flexible enough to help those who want to follow doctoral education/research training part time

D

octoral education is currently undergoing a major transformation in Europe. The Bologna process reforms that have swept through large parts of higher education at the bachelor and masters level have now reached the “third”, or doctoral, round.

research schools, rectors, deans, networks involved in doctoral training and policy makers recently gathered in Lausanne for the inaugural meeting of the EUA-CDE to outline the key challenges facing doctoral education and where action was needed.

While some European countries have reported small increases in the numbers of doctoral candidates, it is clear that further efforts are There is clear determination from universities required to attract the best young candidates to develop a more structured approach to the into doctoral education. Universities – together organisation of research training. They are with public authorities across Europe – must increasingly setting up independent units (such do more to enhance the career opportunities as doctoral/graduate schools) to manage their for talented young researchers. doctoral education and this is enabling them to take There are encouraging signs that higher-education a more strategic approach to their research mission. institutions are doing more in this area, notably At the same time, a range of innovative doctoral by encouraging interdisciplinary training and the programmes are emerging in response to the development of transferable skills based on clear demands of the European labour market. And structures. Stakeholders are particularly interested increasing university-business collaboration in finding best practices for issues such as training combined with greater international co-operation of supervisors, assessment of supervision and between universities is acting as a catalyst for furthering institutional co-operation. the creation of a greater range of doctorates.

As doctoral programmes have changed so has It is against this background that the European the role of the supervisor. The importance University Association (EUA) has launched the of ensuring excellent supervision needs to be Council for Doctoral Education (EUA-CDE), properly recognised. It should be made more a new body with the mission of developing and specific in supervisors’ workload and taken advancing doctoral and research training in Europe. into consideration in academic career More than 300 heads of graduate, doctoral and structures and decisions on promotion.

Getting the best young talent into doctoral education also clearly implies increasing overall funding so that researchers can live and work in decent conditions. Unless this funding deficit is corrected all the current talk of making Europe the world leader in science will be little more than “hot air”.

But the overall level of funding is only part of the problem. More concrete measures are needed to attract talented individuals from low-income backgrounds. And public authorities should also be doing more to make sure funding is flexible enough to help those who want to follow doctoral education/research training part time.

There is also a consensus that the core of doctoral training must remain original research. But only a fraction of Europe’s doctoral candidates now conduct research exclusively in the traditional master-apprentice relationship that once was the hallmark of the education of researchers.

Though the role of individual education remains strong, it has become embedded in structured programmes or doctoral schools in the vast majority of European countries. These structures ideally enable universities to articulate clear strategies and create more transparency in the rights and duties of doctoral candidates, faculty and institutional management alike.

However, structured programmes are still in

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the implementation phase. The interests of the institutions clearly indicate that they are at a point where they need very concrete input to the implementation of specific elements of their structured programmes. Assessment procedures, models for supervision and issues of quality score high when stakeholders are asked what they consider high-priority issues.

The time has come when principles need to be put into practice.

the doctoral candidates’ educational experience and, very importantly, their ability to transfer their specialist knowledge to a variety of applications leading to personal, societal and economic benefit.

Broadly, “transferable skills” are general skills, unrelated to the topic of research, that enhance

countries now run similar programmes. In addition, it should not be forgotten that many

The Joint Skills Statement produced by the UK Research Councils in 2001 provides a clear summary of the core of these skills, identifying seven major areas: research skills and techniques, the research environment, At the meeting in Lausanne, members of EUA- research management, personal effectiveness, CDE also underlined the need for enhancing communications skills, networking and teambetter co-operation between institutions, notably working, and career management. There are, of through the development of joint doctoral course, some areas that are not included in this programmes and the need for a better provision and topics such as enterprise skills and global of skills training for doctoral candidates. skills have more recently become important The importance of such skills in the training of new areas of focus. researchers was recognised in the UK’s Roberts The use of the term “deliver” may be misleading Review in 2002, which recommended that “the since transferable skills are best developed training elements of a PhD – particularly training via experiential learning rather than didactic in transferable skills – need to be strengthened teaching methods. Moreover, in many cases considerably” and that it should “include the the training involves the realisation/recognition provision of at least two weeks’ dedicated of skills already possessed by the doctoral training a year, principally in transferable skills”. researchers rather than de novo acquisition.

On a European level, this was highlighted again Good examples of such learning are the UK more recently in the Bologna Process London GRAD Programme’s residential Grad School Communiqué in 2007. courses and universities in several European

A key question, of course, is how do we know that we are doing the right thing?

We need to understand the true effect of our training programmes

Europe’s agenda for improving research training and doctoral education by Thomas Jørgensen

47 EFMD Global Focus | Volume 03 | Issue 01 2009

300

IMAGE COURTESY: ASHRIDGE

More than 300 heads of graduate, doctoral and research schools, rectors, deans, networks involved in doctoral training and policy makers recently gathered in Lausanne for the inaugural meeting of the EUA-CDE to outline the key challenges facing doctoral education

transferable skills are developed during the doctoral research itself. The design of the overall programme must take this into account, providing the doctoral researcher with a seamless experience.

A key question, of course, is how do we know that we are doing the right thing? We need to understand the true effect of our training programmes. We need to determine the benefit for the individual and for his or her highereducation institution. We also need to know in the longer term whether there is an impact on national and regional economies.

It is certainly feasible to assess the effect of skills training on the individual researcher and several studies have addressed this. However, the effect on a national economy, for example, is much harder to measure since it is distanced in time from the training event and is complicated by a multitude of additional independent factors that may also have economic impact.

Although employers have been consulted in many ways during the development of skills programmes across Europe, it is essential that these and other stakeholders continue to be involved in the further development and refinement of this training to ensure that it is equipping our doctoral researchers with the appropriate competences.

Important issues for the future are: refining our

identification of key skills and how best to deliver them, developing training-the-trainer programmes, sharing good practice across the sector and – very importantly – conducting research into the efficiency of our skills programmes.

The work of the EUA-CDE will push forward the debate on the future of doctoral education and ensure the integral link between teaching and research is strengthened in universities across Europe. This will help us to make sure the full potential of universities in the production of knowledge, its transmission, dissemination and utilisation in technological innovation is realised, thus maximising the university contribution to innovation and sustainable economic development.

ABOUT THE AUTHOR

Thomas Jørgensen is Senior Programme Manager, EUA Council for Doctoral Education.

FURTHER INFORMATION

The European University Association (EUA) is the representative organisation of universities and national rectors’ conferences in 46 European countries. EUA plays a crucial role in the Bologna process and in influencing EU policies on higher education, research and innovation.

EUA provides a unique expertise in higher education and research as well as a forum for exchange of ideas and good practice among universities. The results of EUA’s work are made available to members and stakeholders through conferences, seminars, a website and publications.

For more information about EUA and the EUA Council for Doctoral Education please visit www.eua.be

The work of the EUA-CDE will push forward the debate on the future of doctoral education and ensure the integral link between teaching and research is strengthened in universities across Europe

48 www.efmd.org/globalfocus

The Globally Responsible Leadership Initiative (GRLI) has issued a call for action

The globally responsible leader – a call for action

Globalisation, the growth of information technology and the lack of worldwide regulation confer on firms a power –and a freedom – to act that is without precedent

49 EFMD Global Focus | Volume 03 | Issue 01 2009

The globally responsible leader – a call for action

T

he competitive market economy, our present development model, has shown a continuous ability to be creative while at the same time there has been a progressive blurring of its link with the global common good and a significant loss of our capacity to regulate it.

Without an in-depth transformation, this hitherto successful model runs the risk of becoming unsustainable and of losing its moral and political legitimacy. We invite leaders in business, politics, civil society and education to join in our effort to catalyse this change process.

The system as a whole The competitive market economy has many advantages: creativity, productivity, growth potential and flexibility. Entrepreneurship and innovation are at the heart of this system. In a market economy, the firm is the agent of economic and technical evolution. For a long time it has been presumed that the actions of the firm automatically serve the common good, thanks to the virtues of the market and its famous “invisible hand”. Today this link is becoming much less clear.

Globalisation, the growth of information technology and the lack of worldwide regulation confer on firms a power –and a freedom - to act that is without precedent. Some firms exercise this power according to their own criteria – profitability, competitiveness and shareholder value – often and increasingly on a short-term basis, pushed by the demands for quarterly reporting by financial analysts. This logic has become dominant. It has imposed on us a development model whose only purpose is its own effectiveness and dynamism.

Led solely by instrumental logic, the model becomes increasingly ambiguous and paradoxical. At the same time as producing more wealth than ever and ensuring unprecedented growth, it pollutes, excludes, and often encourages oppression and social injustice. It promotes a desperate race that no longer has any visible purpose or raison d’être beyond shareholder value at whatever societal cost.

This measure, by being rather short-termist, no longer reflects the true value of a firm in terms of its contribution to society. In becoming global, our development model has revealed its limits and contradictions. Its extraordinary capacity to create wealth, its international dynamism and entrepreneurship are producing undesirable systemic side-effects that worry many and cause revulsion in others.

Because recent experience has shown that the current model does not lead to an equilibrium that provides for the global common good, GRLI argues that there is an urgent need for conceiving and implementing a more sustainable and societal development model.

This is the basis of our call for action.

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Globally responsible leadership The current financial crisis has shown that the ideal of a self-regulated system has led us to failure on a global level, with long-term implications for economic development and human well-being. At the heart of this failure is a lack of both responsibility and leadership.

We need more responsible leadership to implement a more comprehensive model for sustainable development. This requires a profound change in individual mindsets and behaviours as well as in overall corporate culture. What is necessary is that both individuals and corporations assume their responsibility towards the common good.

Globally responsible leadership demands that this cultural change and evolution of mindsets should be based on re-visiting three areas: – fi rst, the raison d’être of the firm – s econd, leadership as embedding and catalysing values and responsibilities in the organisation – a nd third, corporate statesmanship as broadening the debate and dialogue with society at large Re-visiting the raison d’être of the firm The primary purpose of the firm is to contribute to overall well-being through economic progress. Shareholder value is but one of several measures of performance. Entrepreneurial actions are defined in terms of initiative, dynamism and innovation. We have to come back to the core of entrepreneurial action, which is creativity in a real world of goods and services, as opposed to a logic of purely financial speculation.

This concept of progress will allow us to identify the specific contribution that a firm makes to society - the function that it alone is capable of fulfilling and that differentiates it from other organisations such as government, unions, universities, NGOs and so on.

To re-locate economics in a perspective of common good requires the exercise of global responsibility. Setting out the aims and purpose of economic progress involves aligning this progress with the greater context of societal progress.

Economics is only a part of the whole and it cannot dominate human society by imposing its restricted vision of equating progress with profit growth. Other forms of progress exist in the domains of, for example, culture, society, politics, spirituality, education and health.

While a firm’s financial progress may encourage some of them, it does not cover the whole field of human progress. We have also seen that deviations of the current system can cause regression and lead to negative or even destructive situations.

We must stop asserting that to respond to global challenges we have only to place our faith in technical ingenuity and market indications. We must stop claiming that there is a quasi-automatic convergence between economic creativity and the global development of humanity. The firm will only become responsible if it subscribes to an all-embracing view of societal progress and sustainable development.

We must stop asserting that to respond to global challenges we have only to place our faith in technical ingenuity and market indications

The globally responsible leader – a call for action

51 EFMD Global Focus | Volume 03 | Issue 01 2009

It is in this perspective that GRLI stands for formulating the purpose of the globally responsible business in the following terms: create economic and societal progress in a globally responsible and sustainable way.

Leadership and ethical fitness Responsible leadership implies the grounding of actions in a system of values that recognises societal interdependence and long-term sustainable development. If the firm wishes to lend meaning to its actions, if it wants to give a purpose to economic progress by aligning it to societal progress, ethics are essential to enlighten tough choices and guide behaviour. The main ethical question for our time is to choose what kind of world we want to build together with the immense resources we have at our disposal.

Humans, societies and their actions build - or destroy - the world. We are responsible for the future and for the society we create. This responsibility becomes greater as our creativity, resources and power grow. Science, technology and globalisation do pose radically new questions that force us to look beyond a narrow framework and to take into account global interconnectedness.

To refuse to integrate ethics into the functioning of the firm on the pretext that the economy has its own logic amounts to locking oneself into an instrumental approach (the market ideology), which deprives the firm of its social legitimacy and can lead to spectacular failures. Ethics are not restricted to convictions or values, but are integral to the long-term sustainability of companies.

Responsible corporate statemanship Corporate statesmanship is about the organisation as an active contributor to societal well-being and evolution. The responsible firm accepts an open debate whenever its actions can have major social consequences. New types of dialogue, which include representatives of civil society (such as NGOs, universities, religious organisations) and international institutions, need to be added to the discussion with social partners and governments. Such an approach must obviously go beyond the national framework.

A changing world and a need for globally responsible leaders

Politics/ Governments

Business

Civil Society

Voluntary transformation is necessary but will no longer be sufficient to improve the system. We also need political will translated into regulations and world governance.

Rather than limiting itself to lobbying actions, the responsible company pro-actively participates in preparing and implementing the necessary new global rules in collaboration with all stakeholders. This includes attentive listening and contributing to the public debate. It is in this sense that responsible leaders must develop a new capacity for statesmanship.

Conclusion and commitment to a critically constructive dialogue In devising this necessary shift in culture, it is important to keep in mind that we are referring to an on-going inquiry process through dialogue between various stakeholder-actors (eg the political world, economic actors and social enablers).

Importantly, it also implies a necessary re-thinking of the way business, political and social leaders are educated and trained.

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60 The GRLI community today consists of more than 60 companies and business schools/learning institutions from five continents

Concretely, GRLI believes that business schools should focus on educating the whole person as entrepreneur, leader and corporate statesman.

Leadership is the art of motivating, communicating, empowering and convincing people to engage with a new vision of sustainable development and the necessary change that this implies. Leadership is based on moral authority.

Moral authority requires convictions, character and talent.

All those who have engaged in action know that great leaders owe part of their authority to their personal qualities perhaps more than to their intellectual or technical competences.

This has been a constant fact throughout human history.

In the light of all this, and realising the urgency with which a failing system needs to be changed and adapted to human needs in a globalised economy, we, corporate leaders, business schools and learning institutions, call for action, by committing to: – Enhancing the change factors that will help us to implement a more sustainable development model – Embedding the appropriate values and behaviours in our strategies and management practices – Developing a pedagogy and a curriculum which enables the development of responsible leadership – Exchanging innovations, good practices and cases in business and education, and share them with our partners and the wider public through the development of forums for critical and constructive dialogue.

The GRLI Partners’ call for action aims at re-enforcing the strengths of our entrepreneurial system while correcting its defects and the financial excesses of the system. We strive to achieve this through enhancing responsibility at all levels.

Signed by the GRLI partners* FURTHER INFORMATION

For further information please contact Anders Aspling anders@aspling.net, Martine Torfs martine.torfs@efmd.org or Matthew Wood matthew.wood@ efmd.org This Call for Action is a result of group discussions inside GRLI, and also grounded on the three documents: Globally Responsible Leadership: A Call for Engagement (GRLI, 2005), Learning for Tomorrow: Whole Person Learning (Bryce Taylor, Oasis Press, 2006), Should Prometheus be Bound? Corporate Global Responsibility (Philippe de Woot, Palgrave, 2005) *The GRLI institutional partners can be found on www.grli.org

About the GRLI, its mission and deliverables About the GRLI The Globally Responsible Leadership Initiative (GRLI) was launched in 2005 by a global group of schools and companies invited by EFMD and the UN Global Compact.

Today the initiative has concluded its 6th General Assembly and produced outcomes and results that drive the development of a next generation of globally responsible leaders.

The GRLI community today consists of more than 60 companies and business schools/learning institutions from five continents, reaching more than 300,000 students and 1,000,000 employees.

The mission of the Globally Responsible Leadership Initiative (GRLI) is to be a catalyst to develop a next generation of globally responsible leaders.

As such, it is a pioneering select group of companies and business schools/ learning institutions engaged hands on in developing a next generation of globally responsible leaders. To do this we are challenging the issues of the company for the 21st century, the mission of business schools/learning institutions and the process for cultural change in organisations. The GRLI’s founders are EFMD and the UN Global Compact.

GRLI is a co-convenor and active supporter of the UN Global Compact Principles for Responsible Management Education.

Deliverables from the GRLI 1. W ide impact; through its advocacy, collective communication, and engagement and shared learning with other organisations globally and locally 2. V alue added to its partners; through concrete initiatives and projects for and within the partner organisations, with best practices being benchmarked 3. Personal growth for the representatives of the partner organisation; through a unique global community of action and learning producing thought leadership, acting as a laboratory for innovation, delivering writings and publications both in research and education related to Globally Responsible Leadership and Corporate Global Responsibility GRLI is a foundation of public interest based in Belgium with the purpose of developing a new generation of globally responsible leaders through the development and support of worldwide projects and initiatives.

www.grli.org

53 EFMD Global Focus | Volume 03 | Issue 01 2009

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

54 www.efmd.org/globalfocus

Measuring the success of custom programmes How do we know whether executive development programmes, particularly custom programmes, actually work? Andrew Likierman suggests some ways of measuring the impacts

The better the work done before a programme starts the easier it will be to solve at least some of the measurement problems

R

ecent years have seen a huge increase in custom management development programmes for executives.

(Custom programmes are designed for specific executives from specific companies, often reflecting particular corporate strategic issues. They contrast with open enrolment executive programmes, open to all comers.)

It is clear that how the effectiveness of such programmes is measured varies greatly.

At one extreme are organisations that treat spending on education like a conventional financial investment while at the other extreme are those that do very little measuring because it’s seen as unnecessary or too difficult.

Measuring the success of custom programmes by Andrew Likierman

55 EFMD Global Focus | Volume 03 | Issue 01 2009

There is a tendency to emphasise activity rather than outcomes, in part because activity is easy to measure

Measurement issues Even though everyone involved in custom programmes – whether commissioners, participants or providers – wants to do a better job in measuring success, a number of issues often get in the way of improvements.

Stage 1: How much time and money?

The first decision is how much to spend on measurement. To give an idea of the choices involved, let’s take four approaches, each named after a German motor car to give a flavour of what is involved.

– The need to recognise and align different interests, since success can mean different things to different stakeholders

Trabant – a dysfunctional model. Assessment relies on immediate reactions to the programme.

Programme aims are unconnected with organisational objectives, there is no preparation and learning is not followed up.

– The tendency for objectives to be poorly defined, leaving it unclear what success would look like

Smart – gets you from A to B economically but with no extras. Assessment is mainly based on – The limitations of available measures. Most established is, of course, the “happy sheet”, which immediate feedback from participants and HR. certainly highlights the learning experience but While senior managers give the programme is highly biased towards immediate reactions overall direction there is no systematic objective-setting and minimal preparation or – The quality of data, as for example when it’s tough follow-through. Any further detailed evaluation to identify the rate and value of knowledge is based on initiatives by individual participants transferred after a programme or their line managers.

– The tendency to skew performance to what can Volkswagen – efficient without being extravagant, be measured rather than difficult-to-quantify the model is good value for money and has all costs and benefits. This gives rise to a tendency the right accessories. Evaluation is completed to emphasise activity rather than outcomes, centrally by HR as well as by individuals and is in part because activity is easy to measure based on observed changes against objectives.

– Finally there’s the delicate issue of any lack of enthusiasm to measure. “No resources” and “not worth the cost and effort” sometimes mean “not my priority”, “my senior management’s not interested” or “I’d rather not find out” Measurement issues are not unique to executive education and can be addressed by applying techniques used for other processes and activities. Set out is a four-stage process.

The programme forms part of an overall development strategy, with senior management involvement and a clear connection between executive education and corporate objectives.

Support, including coaching, is offered through HR. Line management is fully involved.

Mercedes – the luxury model of management development with complex (and expensive) machinery humming smoothly from start to finish.

It is a comprehensive, detailed and continuous process involving HR, programme sponsors, participants and line managers. Objectives are comprehensively described and are linked to senior management’s priorities. Participant experience includes preparation and extended follow-through with learning systematically shared.

Assuming the Trabant is to be avoided, the choice between the others depends on how much time, effort and money the company is willing to provide.

Stage 2: Understanding the measurement challenges Some of the typical measurement challenges faced by organisations are: – Choosing the wrong measures – for example, over-emphasising the financial numbers (see Box 1) or not recognising that changes in circumstances may lag behind measures – Not understanding relationships between measures – for example, accepting weak links with business objectives or having a poor understanding of the interdependencies between measures – Inadequate comparisons – for example, using inaccurate data, making inappropriate comparisons or failing to take account of choices or opportunity costs – Implementing unsuccessfully – for example, failing to consult line management or ensure ownership of the process inside the organisation

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– Difficulties with interpretation –for example, because results cannot be linked with actions (often due to time lags) or because evidence is not verifiable or credible – Taking the right managerial action – for example, reporting results in a timely way that allows action to be taken or focusing on activity instead of results Stage 3 Solving some of the measurement problems A number of the measurement issues and the problems set out in Stage 2 can be addressed.

Before the programme.

Include decisions about how to evaluate success as part of the design process. The battle for measurement is won or lost long before the programme starts.

When looking for information on outcomes (promotion or retention, for example) don’t wait until after a programme: anticipate the need for data and put mechanisms in place to provide it; integrate learning objectives into the business plan, otherwise the programme becomes isolated from the business.

Other actions to be put in place before the programme starts include involving line managers, from the nomination process onwards, reconciling different stakeholders’ objectives where possible and ensuring the quality of data used.

During the programme The better the work done before the programme the easier it will be to solve at least some of the measurement problems, starting with clarity of objectives and managing potential tensions between stakeholders.

But the key for this stage is feedback. This will be improved by asking participants to focus on programme objectives not the process, emphasising comment rather than scores, safeguarding anonymity to ensure frankness, and carefully analysing and discussing the results.

After the programme Treat this stage as of equal importance to the programme itself, tracking outcomes wherever possible. Opportunities include coaching, peer-group support, project work, networking and sharing knowledge within the organisation.

The challenge of comparisons Comparisons need to be made with caution. For example, asking “would you recommend this programme?” can be useful to compare programmes. Less useful are questions that only apply to some programmes - after three months results from a highlyfocused sales event will look different to results from a long-term strategy seminar.

Even two supposedly identical programmes could each attract a different mix of participants. But do try comparisons on individual elements of programmes, even dissimilar ones, such as the extent of knowledge transfer or the use of assessment processes.

Limited willingness to make measurement work Link the programme to the organisation’s vision and priorities. Whenever possible, integrate the programme into talent-management plans through nomination processes.

IMAGES COURTESY: OPEN UNIVERSITY BUSINESS SCHOOL

Stage 4 Mitigating the remaining problems While some measurement problems can be solved others can only be mitigated. Take three as illustrations.

Measuring the success of custom programmes by Andrew Likierman

Improve an individual’s motivation to measure by integrating measures relating to the programme into performance reviews.

Linking the programme to results Time lags make it difficult to connect what has been learned with subsequent action. Mitigate this problem by setting milestones for actions after the programme by incorporating feedback into annual appraisals and by providing a first-class commentary about links to the programme such as evidence on decisions taken. Any claims that actions result directly from the programme need to be credible or they will discredit the programme as a whole.

Conclusion Considering the huge investment made by organisations in custom programmes, measurement deserves a rigorous insightful approach. Contrary to what many believe, it does not need to be costly or complex – the principles of good measurement are the same no matter how detailed the process.

The key is to identify the problems and then to separate those than can be solved from those that can only be mitigated.

Examples of good practice are given in Box 2. The examples show that, yes, measurement can be better.

57 EFMD Global Focus | Volume 03 | Issue 01 2009

BOX 1 What’s wrong with ROI?

ROI (return on investment) is a familiar technique for financial decision making.

An initial investment is compared with anticipated discounted cash-flow returns with the results compared to other decisions or a target rate. Unfortunately, it isn’t useful for custom executive development courses because: – benefits do not come from an identifiable decision or decisions but occur over an extended period. Linking all benefits credibly to most programmes is rarely possible – probability percentages of the link to the programme give an air of precision but are highly subjective and rarely verifiable – calculations usually ignore the time-value of money, treating benefits tomorrow as worth the same as benefits today.

– poor definition of “investment” – a programme’s cost needs to include costs of set-up and administration as well as the cost of time involved when people are away, which are difficult to identify and quantify.

BOX 2 Examples of best practice

An example of the “Mercedes” model is provided by Novartis. The company used a comprehensive assessment process to enhance the leadership skills of 12,000 managers. This included pre-work to identify the issues, line managers discussing the programme with participants and then reviewing actions, coaching support, personal development plans, assessing programme results and linking them with performance priorities.

Considering the huge investment made by organisations in custom programmes measurement deserves a rigorous, insightful approach

Ericsson regards the reputation of a programme and the willingness of managers to send their staff on it as important indicators of its success.

The mining company Rio Tinto supplements immediate programme evaluations with an on-line survey three to six months later. Participants are asked for quantifiable changes and for examples of things that are done differently as a result of the programme.

This is supplemented by an annual survey of sponsors asking about the perceived value and impact of programmes.

After a UK government leadership programme, line managers of participants were interviewed to find examples of where learning had been transferred to the workplace, with questions designed to make sure the contribution of the programme was separated from other influences.

Barclays Bank brought together participants a year after a programme to exchange views on what had been learned and for participants to help each other get the best from their follow-up.

ABOUT THE AUTHOR

Sir Andrew Likierman is Professor of Management Practice at London Business School, a non-executive Director of the Bank of England and of Barclays Bank plc. This article summarises work commissioned

by LBS to help its clients. For a full copy of the report, or to discuss the issues, contact the author at alikierman@london.edu

58 www.efmd.org/globalfocus

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Climate change and other pressing environmental and social issues urgently require transformational change.

But, ask Kai Peters and Matthew Gitsham, are business schools and HR departments up to the challenge?

Developing the global leaders of tomorrow by Kai Peters and Matthew Gitsham

W

e heard a lot about climate change in 2006 and 2007. The financial crisis and recession have pushed it down the agenda for the moment – people can only focus on so many things simultaneously.

But the current financial crisis has been over 20 years in the making and illustrates a valuable and extremely important lesson – the longer risk is ignored, the bigger will be the consequences.

20% The Stern Review extrapolates the costs and suggests that climate change could swallow up to 20% of the world’s GDP

60 In 2007 the PRME Principles for Responsible Management Education initiative was set up by the UN and was developed by a global taskforce of 60 business schools

The Stern Review on the Economics of Climate Change, published in Britain in 2006, suggests that the expected increase in extreme weather, with the associated and expensive problems of agricultural failure, water scarcity, disease and mass migration, means that global warming is likely to precipitate crises on a scale we have never witnessed.

Stern extrapolates the costs and suggests that climate change could swallow up to 20% of the world’s GDP. Current recession concerns, the most serious for nearly a century, dwarf by comparison.

The shift to a low-carbon economy is just one of a wide range of issues and trends that business leaders increasingly agree will impact on their companies, both in terms of risks and opportunities. There are wider concerns relating to the natural environment – finite and increasingly scarce resources, biodiversity and species loss; and also around globalisation – doing business in markets marked by poor public infrastructure, widespread poverty and inequality, corruption, violent conflict, and labour standards and human rights violations.

What is increasingly clear is that the scale of these risks and opportunities means it is not simply a case of business as usual with a few tweaks here

59 EFMD Global Focus | Volume 03 | Issue 01 2009

and there but that the time has come for really transformational change – addressing these issues is no longer just the responsible thing to do but an urgent business imperative.

Transformational change requires more than changing a few light bulbs. To make the necessary step-change means putting these issues at the heart of strategic decision making and integrating them into all the key business systems and processes that underpin this. It means influencing policy makers to create new market structures and rules of competition.

And it also means reaching the hearts and minds of individuals working right across organisations, changing the nature of the conversations within organisations and equipping people with the knowledge and skills they need to enable them to respond.

Management education and leadership development have an important role to play in meeting this challenge.

It is this role that lies behind the new United Nations Principles for Responsible Management Education (PRME) initiative, developed by a global taskforce of 60 business schools and launched in 2007.

Recently, Ashridge Business School worked with the European Academy of Business in Society and a number of other leading business schools across the world to understand just how important this agenda is to companies.

The research, based on extensive interviews and a global survey of CEOs and senior executives conducted during the height of the financial crisis, presents a stark message: 76% of senior executives polled say it is important that leaders in their organisations have the knowledge and skills to respond but less than 8% believe these knowledge and skills are being developed very effectively by either their own organisation or business schools.

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Research findings indicate that there are a whole host of discrete knowledge and skill sets required that underpin management ability to respond effectively. These can be grouped into three clusters.

The global leader of tomorrow needs to understand the changing business context – 82% of those polled say senior executives need to understand the business risks and opportunities of environmental and social trends. And they need to know how their sector and other actors (regulators, customers, suppliers, investors, NGOs) are responding.

Senior executives also need the skills to respond to this information – 70% say the global leader of tomorrow needs to be able to factor social and environmental trends into strategic decision making. In different contexts and industry sectors this can mean knowing how to factor these issues into processes such as capital expenditure and brand development. It can mean knowing how to use tools for horizon scanning, scenario building and risk management.

The second cluster of knowledge and skills are around the ability to lead in the face of complexity and ambiguity. The challenges and opportunities these issues and trends present tend, by definition, to be complex – there is often little certainty and little agreement both about their precise nature and the response that is required.

Leadership in these circumstances requires a range of discrete skills: 88% of those polled say senior executives need the ability to be flexible and responsive to change; 91% the ability to find creative, innovative and original ways of solving problems; 90% the ability to learn from mistakes; and 77% the ability to balance shorter- and longer-term considerations.

The global leader of tomorrow also needs to be able to understand the interdependency of actions and the range of global implications that local-level decisions can have and to understand the ethical basis on which business decisions are being made.

The final cluster of knowledge and skills are around connectedness – the ability to understand the actors in the wider political landscape and to engage and build effective relationships with new kinds of external partners.

For different businesses this can mean regulators, competitors, NGOs or local communities. The mindset with which our current leaders are groomed does not encourage productive engagement with partners outside the organisation. Leaders receive plenty of training in negotiation skills, for example, but on the whole lack the skills for engaging in effective dialogue and partnership.

To survive and thrive, 73% of senior executives say the global leader of tomorrow needs to be able to identify key stakeholders that have an influence on the organisation and 74% say they need to understand how the organisation impacts on these stakeholders, both positively and negatively; 75% say senior executives need to have the ability to engage in effective dialogue and 80% say they need to have the ability to build partnerships with internal and external stakeholders.

If these are the kinds of knowledge and skills needed, how can they best be developed? Again, the research sends a clear message – traditional approaches are not enough, we need to use a broad range of learning approaches to develop the global leaders of tomorrow.

70% Of those polled 70% said that the global leader of tomorrow needs to be able to factor social and environmental trends into strategic decision making

Because the issues are complex, senior executives believe the most effective learning and skills development comes through practical experience, whether the learning is on-the-job, project based or experiential. Senior executives also value opportunities to develop skills in relatively risk-free environments such as simulations and by considering relevant case studies from real experience.

These learning experiences can be enhanced by structured reflection through coaching or appreciative inquiry. Although learning approaches such as e-learning and lectures are not highly rated by executives, these may still have a role where more straightforward knowledge transfer and basic awareness raising are required.

The research identifies examples where a number of leading companies have already taken steps to develop these kinds of knowledge and skills among their senior executives.

Unilever, the global Anglo-Dutch manufacturer of leading brands in foods, home and personal care, runs a programme for high potentials on its emerging

The research is clear – traditional approaches are not enough, we need to use a broad range of learning approaches to develop the global leaders of tomorrow

Developing the global leaders of tomorrow by Kai Peters and Matthew Gitsham

market strategy. Teams of executives build their engagement skills at the same time as researching current social and environmental trends and the business implications by spending time in emerging markets collaborating with NGOs, microfinance organisations and other grassroots groups.

The teams develop business proposals to present to the Unilever board and the most successful are selected for implementation.

InferfaceFLOR, the modular flooring and carpet tiles manufacturer headquartered in America, has introduced in Europe, the Middle East, Africa and India a three tier education programme from induction level to the senior management team.

The programme progressively raises awareness of key environmental and social issues and develops the skills individuals need for the organisation to be able to fulfil its vision of being environmentally restorative by 2020.

Individuals must have participated in certain levels of the programme, and where appropriate passed a graded assessment, to be eligible to be considered for promotion to more senior roles in the organisation.

Really achieving the transformational change needed in management education will require reaching the hearts and minds of every single member of faculty engaged in research, teaching and consulting

At Ashridge we are taking a number of steps ourselves to address this challenge. We established the Ashridge Centre for Business in Society for research and thought leadership as long ago as 1996. Our MBA programme includes a compulsory two-week module that explores how these issues cut across all the functional silos.

In our executive education work, many of our open-enrolment and customised programmes have been redesigned to include a focus on building these knowledge and skill sets. And in 2005 we launched the world’s first continuing professional development programme for Sustainability and Corporate Responsibility Directors – the Ashridge Integrating Corporate Responsibility programme.

Our latest contribution is a unique partnership, Ashridge InterfaceRAISE, bringing together Ashridge’s expertise in executive education and organisation development consultancy with the vast practical experience of modular flooring manufacturer InterfaceFLOR mentioned above.

We’re also looking to raise awareness more widely and since 1999 have been running an essay award for MBA students on the changing role of business

61 EFMD Global Focus | Volume 03 | Issue 01 2009

in society. The 2009 Award (first prize €7,000) invites MBA students and others across the Europe/Middle East/Africa region to submit their ideas on how to innovate to create value from the shift to a low-carbon economy.

The award sponsor, HP, has been working with the global conservation organisation WWF to identify the business opportunities for the ICT sector from substituting high-carbon activities with low-carbon alternatives – the business opportunities at stake are substantial.

While these examples can provide some direction, there is still a long way to go. Really achieving the transformational change needed in management education will require reaching the hearts and minds of every single member of faculty engaged in research, teaching and consulting. It also means that the management education world collectively must reassess each and every one of the key principles, models and frameworks that inform our thinking.

The task is daunting, but the need is great and as this research demonstrates, the companies we are developing people for are demanding it. We must rise to the challenge.

ABOUT THE AUTHORS

Kai Peters is Chief Executive of Ashridge Business School Matthew Gitsham is a Programme Director at Ashridge and works with a number of corporate clients on executive development on sustainability, corporate social responsibility and value creation.

FURTHER INFORMATION

The Global Leaders of Tomorrow project is part of the European Academy of Business in Society (EABIS) Corporate Knowledge and Learning Programme and has received financial support from the EABIS Founding Corporate Partners IBM, Johnson and Johnson, Microsoft, Shell and Unilever. The project has been conducted in support of the UN Principles for Responsible Management Education (PRME) initiative.

The research has been led by Ashridge Business School with Case Western Reserve University, the Center for Creative Leadership, China Europe International Business School, IEDC-Bled, IESE, INSEAD, Tecnológico de Monterrey, the University of Cape Town and the University of Waikato.

The full research report is available from www.ashridge.org.uk/globalleaders

62 www.efmd.org/globalfocus

When a diploma and a job are not enough Marianne DelPo Kulow argues the case for supplementing women’s business education with professional development workshops

When a diploma and a job are not enough by Marianne DelPo Kulow

W

63 EFMD Global Focus | Volume 03 | Issue 01 2009

omen are remarkably resourceful and successful both at launching their careers and at performing well in their chosen work. The more difficult challenge for many women appears to be moving from one phase of their professional lives to the next. It is at these transition points that women seem most hungry for assistance.

Three major transition points where women are underserved in their need for professional development are: before their first significant promotion, which usually occurs three to seven years into their careers; returning to the workplace after a leave or reduced work for bearing and raising children; and at the most senior level of their careers, when many women have achieved significant success and face choices about how to make the final chapters of their professional lives most satisfying.

Therefore, to most effectively support women in their quest for leadership positions, leadership institutes should provide professional development workshops specifically tailored to women’s needs at each of these career transitions.

A women’s leadership institute housed at a business university is the logical type of entity to design, market and implement the type of workshops I suggest.

The content of these workshops puts them outside the usual format of faculty-based curricula but the impact of teaming faculty workshop leaders with real-world business professionals to serve as panelists is powerful.

Some of the skills involved are issues addressed by campus career services offices and mainstream courses so a university-based institute allows for the utilisation of these campus resources while varying the format to suit the needs of the professional: teaming faculty with real-world executives; an intensive format to fit within busy schedules of participants; workshops driven by practical exercises.

Such an institute can serve as a liaison between faculty, career services staff and corporate partners to create unique learning opportunities. Workshops can be marketed to university alumnae as well as to corporate partners, many of whom recognise the need for these workshops to prevent the brain drain caused by stagnated junior professionals, stay-at-home mothers who do not return to the workforce and senior executives who retire because they are unable to fashion their desired professional changes within the constraints of their current workplace.

The programming described here can transform the landscape of women in leadership positions. By offering a cohesive programme of carefully targeted and constructed professional development workshops, women’s leadership institutes can facilitate the movement of women across major transition points in their careers.

To most effectively support women in their quest for leadership positions, leadership institutes should provide professional development workshops specifically tailored to women’s needs at each career transition

When such institutes also pool their resources to support research into additional areas of need for these women, we can then broaden our workshop offerings to ensure that all of women’s needs are being met.

The goal should be a professional world where no talent is wasted for lack of practical, teachable, professional development skills.

This is an attainable goal. The Women’s Leadership Institute (WLI) at Bentley University near Boston in America can serve as a model.

The ‘first step up’ group Many junior, professional women possess the drive and desire for career advancement but may be uncertain about how to realise their potential. Many alumnae report that their university did a fantastic job at preparing them for their work and helping them to land their first position but that they feel lacking in the soft skills they need to move ahead from that entry-level position.

At Bentley University workshops are presented on campus in a one-day conference format to provide women with practical skills required for career advancement. The programme, Gearing Up: Strategic Tools

64 www.efmd.org/globalfocus

Highly successful women often find themselves questioning their success: Is this all there is? Is this what I really wanted after all?

for Career Advancement, provides participants with a collection of tools to best advance their professional aspirations.

updating their industry-specific skills. Workshops can address each of these needs.

The workshops also provide an opportunity for attendees, often isolated from each other in the silos in which they work, to meet and to utilise each other as resources. Among the workshops offered are:

Bentley’s MOM: More Opportunities for Mothers workshop series was custom designed to address these needs. Attendees, for example, work through exercises that help them re-evaluate and reassess their professional skills, determine parameters of their ideal job and understand how to effectively incorporate the strengths and skills gained from not-for-profit or volunteering experiences.

–M anaging Your Own Career: Spotting and Creating Opportunities for Advancement – S tanding Up, Standing Out: Effective Professional and Personal Presentation – Negotiating for You: Effectively Advocating on Your Own Behalf – Building Productive Workplace Relationships: Co-workers, Managers, Clients – Effective Networking: It Doesn’t Have To Be A Chore – Taking Charge of Your Personal Finances: Wealth Health – Balancing Personal and Professional Lives: Success Without Giving Up Your Life A combination of professor-led workshops and businesswomen as panelists has proved to be an effective model. The businesswomen are there both to inspire and to explain in concrete ways (usually through anecdotes from their own careers) why mastering the particular skill being taught in that workshop (for example, negotiating) has been so vital to their own success.

The final workshop also includes an intensive brainstorming session where an array of professionals work with participants to identify specific industries, resources or contacts to aid the re-entry process.

Moreover, participants are able to form a community of resources and support with each other, thereby building self-esteem and sharing important information.

WLI augments each session by providing an additional resource component that complements our career services professional’s intensive, hands-on programming. These components include outside speakers, a panel of “Inspirational Relaunchers” (women who had made the successful transition from career break back to paid work) and representatives from placement agencies that specialise in the placement of returning mothers.

Senior executives The faculty member then works with a breakout group to teach the skill, Highly successful women sometimes find themselves questioning their often through hands-on exercises and small group simulations. These are success: Is this all there is? Is this what I really wanted after all? Do I really want to do this for the rest of my professional life? thus workshops that both inspire and inform. Attendees must roll up their sleeves and participate in these highly interactive sessions. They Beneath the veneer of many seemingly successful high-level women leave not only re-energised but with the practical skills (and the attendant executives lives a somewhat dissatisfied, disillusioned woman who feels confidence) to move ahead in their careers. They acquire skills on Friday a bit stuck. This transition point often freezes women who do not want that they can implement on Monday. to risk their hard-won achievements and financial security to try something new or different at an advanced stage in their careers. Carefully crafted Stay-at-home mothers seeking re-entry workshops can assist these women in better writing the final chapters of Mothers on career break seeking to re-enter the paid workforce have their professional lives. unique needs. Among these are: overcoming inertia; breaking out of a feeling of isolation from other professional women; designing a job search that fits their current skills, interests and availability; identifying employers open to hiring them; rebuilding their confidence; and

Bentley’s workshops provide women with tools to help them embrace desired changes in their careers. The workshops also provide an opportunity for attendees, often isolated from each other as there are so few women

When a diploma and a job are not enough by Marianne DelPo Kulow

65 EFMD Global Focus | Volume 03 | Issue 01 2009

at their levels within their own firms, to meet and to utilise each other as resources. These are some of the topics addressed in these workshops: –W hat Does a Successful Woman Do Next? Actualising High-Level Career Change – Extracurricular Activities: Making A Difference Beyond the Workplace – All in the Family: Managing Changing Relationships – Is This All There Is? Enrichment Opportunities Beyond Your Profession The focus of these workshops is not on building skills directly relevant to career advancement. These women have acquired business skills but now need tools to integrate life issues into their career plans.

The workshop on actualising high-level career change, for example, steers attendees through a series of exercises designed to help them articulate their core values and the particular career change that would best complement a realignment of those values and their acquired skills.

A diploma and a job are necessary but often not sufficient to achieving high levels of success

The extracurricular activities workshop offers an opportunity for participants to consider supplementing their current work with outside experiences (such as giving back by donating one’s skills to a cause of importance to the individual) that might enhance their sense of satisfaction without requiring a job change (perhaps just scaled-back hours to allow time for philanthropic activity).

Family obligations keep many high-level women from feeling free to pursue their own dreams. Hence, a workshop confronting these concerns in a practical, problem-solving format is designed to help women address these issues so that they can remove them as obstacles from their own career paths.

Finally, we offer a workshop designed to help attendees consider creative alternatives to their current situation. Perhaps a second part-time “job” that grows out of a hobby or some other interest totally different from the woman’s main training and skill set (for example, chef, florist, author) is worth a try.

ABOUT THE AUTHOR

Marianne DelPo Kulow is Associate Professor of Law and Director, Women’s Leadership Institute, at Bentley University mdelpokulow@bentley.edu

This trilogy of professional development efforts provides women with vital tools at three critical career transition points. In so doing, the workshops enhance women’s likelihood of achieving significant leadership positions in their professional lives. A diploma and a job are necessary but often not sufficient to achieving high levels of success.

Professional development workshops can complete the tool box.

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The millennial generation shows a natural affinity with issues of corporate social responsibility.Liz Maw argues that this needs to be harnessed at the undergraduate level

M

uch has been said about the potential and impact of the “millennial” generation.

Also known as “Gen-Y” or “Echo-Boomers”, Millennials are individuals born roughly between 1980 and 1995.

Like generations before them, Millennials are shaped by the political and economic events of their time. Defining moments such as September 11th and the war in Iraq and emerging trends such as the rise of China and India and the prevalence of the computer have helped to shape this group into socially conscious, tech-savvy and politically engaged global citizens.

In North America, in particular, the shameful collapse of corporations such as WorldCom and Enron has also affected this group and awakened an interest in social responsibility, sustainability and ethics for this new generation of business leaders.

In late 2007, Net Impact, an international network of current and emerging leaders dedicated to corporate social responsibility (CSR), conducted a survey of undergraduate students to better understand their opinions on business’ relationship with society and compare those opinions to those of MBA students (or those primarily connected to the tail-end of Generation X). See table right.

The traits of the millennial generation indicate that these students have an inclination towards group activities, collaboration and volunteerism

Over 2,400 undergraduate students responded to Net Impact’s survey, representing over 50 colleges and universities in Canada and America. Although the results focused on North America, Net Impact believes that the survey findings can be applied to global business programmes as the organisation has seen a rising trend in international membership and interest in CSR topics over the past few years.

Net Impact’s data suggests that undergraduate students strongly believe that corporate profits and social responsibility can naturally co-exist and, in fact, benefit one another.

While 87% of students said that business leaders should factor environmental and social effects into their business decisions, nearly half believed that such an approach could be profitable.

Furthermore, a majority of undergraduates believe that it is their responsibility to make the world a better place and that business has an obligation to empower them in this effort.

A year earlier, Net Impact had surveyed MBA students and found similar results. However, it is interesting to note that undergraduate students, although generationally predisposed to CSR ideals and concepts, were overall less familiar with applications and models for CSR in business.

This finding suggests direct implications for university faculty, administrators and other stakeholders in business education, including potential employers.

With over 73% responding that they will seek socially responsible employment during the course of their careers and over half stating

67 EFMD Global Focus | Volume 03 | Issue 01 2009

Equipping the millenials for social change by Liz Maw

that they are likely to discuss their interest in CSR with a potential for-profit employer, university faculty at undergraduate business institutions throughout the world must recognise their students’ enthusiastic awareness of this topic and develop the programmes necessary to enable students to put their CSR ideals into action.

Globally connected through technology and politically aware, today’s undergraduate students are far more likely to join socially responsible companies, buy Fair Trade products and start their own social venture than previous generations.

Net Impact plans to widen its reach in the undergraduate area in the 2008-2009 academic year

To prepare these students for their future careers as responsible business leaders, undergraduate institutions should consider integrating concepts such as international development, environmental sustainability, renewable energy, corporate social responsibility and social entrepreneurship as part of the required core curriculum.

In support of this effort, over 70% of survey respondents stated that they believe classes in CSR should be integrated into the curriculum and required for students in business/management programmes.

Clubs and extra-curricular activities focused on CSR can also serve as a powerful learning tool in organising student interest and education in social responsibility, especially given Net Impact’s research indicating that 74% of undergraduates believe that universities and colleges should place more emphasis on training socially and environmentally responsible individuals than they currently do.

Furthermore, the traits of the millennial generation indicate that these students have an inclination towards group activities, collaboration and volunteerism.

In response to growing interest in CSR at the undergraduate level and increased awareness of business as a tool for social change, Net Impact has developed a programme to educate and inspire the next generation of business leaders seeking to use their skills to make a positive impact on the world.

Although Net Impact’s membership has traditionally focused on MBAs, graduate students and young professionals who wish to leverage their influence for the benefit of society, the economy and the environment, the organisation also realises that it is crucial to involve undergraduate youth who want to know how they can translate what they learn in the classroom into tools they can use as socially responsible professionals.

In the 2007-2008 school year over 20 Net Impact Undergrad chapters were organised in America and Canada. Led by enthusiastic and engaged undergraduates, each chapter organised speaking events, hosted roundtables and panel discussions, and planned volunteer events all focused on themes of CSR, social entrepreneurship, green business and other topics related to how business can be used to make a positive impact in the world.

New leaders, new perspectives II: A Net Impact survey of undergraduate opinions on the relationship between business and social/environmental issues

Believe business leaders should factor social and environmental effects into their business decisions

87%

Believe companies should try to work towards the betterment of society

84%

Wanted to find socially responsible employment at some point in their careers

77%

Wanted to find socially responsible employment

60% immediately after graduating college September 2007

Given the backlog of applications received last year, Net Impact plans to widen its reach in the undergraduate area in the 2008-2009 academic year. To date, Net Impact has launched 35 chapters, expanding its international presence to universities like Kwame University of Science and Technology in Ghana. The organisation hopes to continue such growth in the 2008-2009 academic year.

Faculty and administrators are encouraged to couple their strong academic programmes with student volunteer and club activities to help universities equip, educate and inspire the next generation of socially and environmentally responsible business leaders.

ABOUT THE AUTHOR

Liz Maw is Executive Director, Net Impact.

FURTHER INFORMATION

Net Impact is a global organisation of students and professionals using business to improve the world. It offers a portfolio of programmes and initiatives to educate, equip and inspire over 10,000 members to make a tangible difference through business. Spanning six continents, its membership is one of the most influential networks of students and professionals in existence today and includes current and emerging leaders in CSR, social entrepreneurship, non-profit management, international development and environmental sustainability. To learn more please visit netimpact.org

68 www.efmd.org/globalfocus

EFMD 2009 | www.efmd.org/conferences

Upcoming events January 2008

February 2009

EVENT

EVENT

EVENT

2009 EFMD Meeting for Deans & Directors General

Corporate Advisory Seminar

2009 EFMD Entrepreneurship Conference

DATES / VENUE

DATES / VENUE

DATES / VENUE

26–27 February/ Barcelona, Spain

29-30 January / Milan, Italy

6 February 2009 / EFMD premises, Brussels, Belgium

THEME

THEME

Competing through knowledge

Soft Skills are Hard – Approaches for Measuring Impact of Coaching and Selection of Coaches

The Role of Entrepreneurship Training in Tomorrow’s Society

HOST

SDA Bocconi

THEME

HOST

EAE Business School

March 2009 EVENT

EVENT

EVENT

EFMD Advisory Seminar

2009 EFMD MBA Conference

Sharing Best Practice: CLIP Workshop

DATES / VENUE

DATES / VENUE

DATES / VENUE

6 March / Brussels, Belgium

22–23–24 March / Lisbon, Portugal

26–27 March / Madrid, Spain

THEME

THEME

THEME

Fundraising in Business Schools

MBA 2010: Setting the New Agenda

Developing Leaders for a Global Context

HOST

HOST

HOST

EFMD

AESE – Escola de Direcção e Negócios

Grupo Santander

April 2009 EVENT

EVENT

EVENT

EFMD/PMI Joint Seminar

EFMD Advisory Seminar

2009 EFMD External Relations Meeting

DATES / VENUE

DATES / VENUE

DATES / VENUE

31 March / Brussels, Belgium

3 April / Brussels, Belgium

23-24 April / London, United Kingdom

THEME

THEME

THEME

New Management Opportunities for Business School Growth

The Particular Challenges of MSc Programmes

Communities beyond the classroom

HOST

HOST

Cass Business School.

EFMD/PMI – Project Management Institute

EFMD

May 2009

June 2009

EVENT

EVENT

EVENT

EFMD Advisory Seminar

2009 EFMD Annual Conference

DATES / VENUE

DATES / VENUE

World Summit on Public Management Education, Training and Development

12 May / Brussels, Belgium

7–8–9 June / Brussels, Belgium

DATES / VENUE

HOST

THEME

18–19 June / Budapest, Hungary

Translating Soft Skills into Teaching Methods

HOST

HOST

EFMD

Jointly organised by EFMD, IRSPM, and the Public and Non-profit Division of the Academy

AF_anu_AESE_175x240_CV.ai

EFMD Advisory Services assist members in the continuous quality improvement of their programmes, activities and governance. Seminars are interactive and include the intervention of an expert and presentation of a recent case study. As the seminars are limited to a maximum of 25 participants the opportunity to share ideas, best practices and learn from colleagues and speakers is a key component of the seminar design.

EFMD Advisory Seminars Agenda for 2009

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CM

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CMY

In 2009 seminars will be organised at the EFMD head office in Brussels, on the following themes.

February

March

April

May

October

November

13

6

3

8

2

17

MSc programmes

Doctoral programmes Career services in business schools

Africa

28

12

24

IT seminar for those Fundraising in involved in IT teaching business schools

21

Academic publishing Quality of students

17

Translating soft skills Rankings into teaching methods

Internationalisation

If you would like to pre-reserve a place or show an expression of interest for any of the upcoming seminars please contact Virginie Heredia-Rosa who will be delighted to help – virginie.heredia-rosa@efmd.org

www.efmd.org

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Volume 03 | Issue 01 2009

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Global Focus

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

Volume 03 | Issue 01 2009

Rue Gachard 88 – Box 3 1050 Brussels Belgium Email: info@efmd.org

Where do you find the world’s best students?

They’re in The 100+ counTries ThaT deliver The GMaT.

New EFMD President Alain Dominique Perrin says that EFMD is well placed to face difficult times

Your applicants come from many different countries, cultures, academic backgrounds, and work experiences. The GMAT is the only test for graduate business school candidates that was designed by business schools and has been proven over more than three decades of research to be the most reliable predictor of academic success. And only the

The challenge of the present

GMAT is delivered on demand, under the same conditions, with the highest levels of security, around the world.

You don’t need to wonder about where to find the best students.

Just look for their GMAT results.

The True Test of Business

GMAT® is a registered trademark of the Graduate Management Admission Council® (GMAC®), the leading advocate and resource for quality graduate schools of business, worldwide.

COVER IMAGE: MIDNIGHT MARMALADE

To learn more about the GMaT, visit gmac.com

GMAT

INSIDE THIS ISSUE China’s world Chinese companies ‘go global’ in search of resources, growth and markets

Test match?

Dave Wilson talks about GMAC’s strategic alliance with EFMD

Peter Drucker The best management guru ever? Richard Straub thinks so

Breaking ranks Della Bradshaw tells us to relax about business school rankings

GRLI update Anders Aspling on why the latest GRLI call for action is so urgent

Responsible youth Liz Maw wants to harness the millennial generation