Jordi Díaz outlines three key challenges currently faced by established Western business schools.
Recently I had the opportunity to take part in three conferences on business education held in three different continents.
Several ideas put forward by leading experts in the field made me reflect on the significant role that business schools fulfil today.
On my return to Barcelona, one question kept nagging me: what is it that keeps directors of managerial training institutions awake at night?
In answer to this question, I have identified three main challenges that, in my opinion, encapsulate the new expectations of participants on business training programmes and hence the challenges to providers of management education.
CHALLENGE NUMBER ONE
Globalisation and the role of China and Latin America
We need to start with China and Latin America because the penetration of both these markets in the field of training is becoming increasingly evident.
BBVA Research 2014, presented during the last meeting of the Consejo Latinoamericano de Escuelas de Administración (Cladea), stated “the Pacific axis, which includes China, Japan, Oceania, North America and Latin America, will account for 77.5% of global growth from here to 2022”.
For all higher education, China attracts 8% of the 4.3 million globally mobile students, according to the Institute of International Education. The US, by comparison, has 11%.
The latest ranking of the top Executive MBA programmes states that “four out of the top 10 programmes worldwide are taught entirely in China or in partnership”.
It is also interesting to see how China has shifted from being an “importer” of management programmes from all over the world (usually from the best institutions) to setting the rules of the game.
The most recent move by the Chinese government, for example, has been to prohibit state officials from taking such programmes. Executive MBAs are popular among officials and can cost about 600,000 yuan (€85,000) a year, more than 10 times the annual salary of some officials. A government document issued in July said that all Executive MBA programmes would be classified as “expensive” and cadres prohibited from studying for them.
Rather than paying for postgraduate education out of their own pockets, officials have been known to cover the expense by using public funds or money from companies or the schools themselves, creating various openings for corruption.
Chinese institutions are well aware of their relevance in the global training market. What is more, there is a clear trend away from the model of exporting students all over the world or importing programmes from top institutions in order to offer them inside China. The main challenge now has to do with seeking alliances.
These are primarily alliances with partners who are willing to risk the option of a true China- Western model such as the CKGSB China EMBA programme; launched with IMD in Switzerland.
Another example is the New York University Shanghai. NYU Shanghai is a joint venture between East China Normal University (ECNU) and New York University, “the first Sino-US joint venture university” according to NYU Shanghai’s website, whose first undergraduate class was inaugurated in autumn 2013.
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