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July 22, 2007 2:30 pm

Spanish Adventures in Africa

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If Eldon’s next big bet on foreign expansion pays off, the Madrid-based manufacturer may have Iese Business School in Spain to thank.

After completing a full-time MBA more than 10 years ago, Eldon’s chief executive Fredrik Wikström turned to the school recently when the institution started recruiting for its second “Inside India” programme. The company, which makes enclosures for industrial and electrical circuits, was pondering an investment in Asia. In return for the course fee of €5,500 ($7,600, £3,700), Mr Wikström was given what he describes as “a tremendous crash course in how to be an expert on India”.

During an intensive five-day visit, Mr Wikström was in­structed by faculty members from the Indian School of Business in Hyderabad, briefed by the heads of multinationals with operations in India and shown round the Tata group’s global consultancy business in Mumbai. Masterclasses covered everything from labour relations and tax laws in the country to the workings of the financial sector and the entertainment industry.

A highlight of the trip, he says, was a visit to the home of an Indian family to quiz them on their consumer habits and life goals: “That is something you would never be able to do on a normal trip.”

Mr Wikström now plans to sign up for Iese’s second “Inside China” programme, which he hopes will inspire a decision on which of the two countries to invest in. “I’m still confused about India – but it’s a higher level of confusion,” he says. “If I can get to that stage on China, then I’ll be better able to take the next step.”

Iese’s Inside series aims to aid decision-making rather than provide a template for doing business in the host country, says Pedro Videla, an associate professor at Iese and an emerging-markets specialist.

Taking place between two weekends, the programmes draw heavily on partnership schools and alumni and business networks to offer a sort of high-end package holiday for executive graduates. “We’re not there to give answers, but to raise questions,” says Prof Videla. “The value added comes from the fact that the school can save you enormous amounts of time and money.”

The programmes are usually built around a proposal from within Gemba, the Global Executive MBA alumni body. For example, Iese’s first India trip, in 2005, was the idea of Rajiv Seth, a 2004 graduate who felt his native India was noticeably absent from Gemba’s international modules.

Course sizes are typically 30 or so, with about half drawn from Gemba’s ranks. The Inside programmes’ popularity is unsurprising given the thirst for knowledge among Iese’s alumni, as well as from outside the student network, about the most prominent of the so-called Bric economies (Brazil, Russia, India and China).

However, the Barcelona-based school is about to make a leap of faith by embracing Africa. Ac­cording to organisers, the school’s inaugural “Inside South Africa” trip, scheduled for October, is the first of its kind and could lead to broader programmes taking in more African countries.

Mark Wuitjen, programme director of the Inside series, says he originally envisaged a course including either Nigeria or Kenya. However, logistical considerations and the lack of suitable business activity in those countries forced him to narrow the scope.

“We wanted the first edition of the African series to be well-focused,” he says.

“Yes, it’s a soft introduction to Africa, but South Africa is a country with strong examples of corporate internationalisation.”

Potential business collaborators include the mining groups AngloAmerican and DeBeers, the financial group Standard Bank and Barloworld, the diversified industrial holding. Multinationals with a strong local presence may include Barclays, General Electric, Mittal and Siemens, according to a draft programme. Lectures by local academics and industry leaders will be held at the University of Cape Town, which has its own international MBA programme, and at the Wits Business School in Johannesburg.

“South Africa represents key economic aspects of both the northern and southern hemispheres within the borders of a single nation,” says Ralph Klingmann, a Gemba member who presented the initial “Inside Africa” proposal.

He says the visit will be relevant to a range of executives, “from those seeking an insight into how to do business in the developing world to those wanting to learn from observing cutting-edge business practices in highly sophisticated markets”.

He admits that recruitment may prove trickier than for the China and India visits. However, it was important for Iese to stay ahead of the curve, he says: “This is all about South Africa, but if you look at countries such as Nigeria, Kenya and to a lesser extent Angola, you have to conclude that Africa will have its renaissance.”

Fuelled mainly by China’s insatiable demand for natural resources, economic growth in sub-Saharan Africa is running at an average 5 per cent a year and, with notable exceptions, is enjoying a period of relative political stability. Business schools have noted the trend, investing in partnerships, new facilities and conferences with a view to raising standards and laying the foundations for potentially lucrative markets.

The Global Business School Network, an initiative of the International Finance Corporation, made Africa the focus of this year’s second annual meeting of its academic advisory council. Meanwhile, the continent’s fledgling business schools have intensified their call for more support from the developed world. They argue that Africa’s progress beyond a dependence on commodities and boom-and-bust cycles will depend largely on the quality of the management education offered at its schools.

Iese, for its part, has strong links with the Lagos Business School in Nigeria and last year helped set up the Strathmore University Business School in Nairobi. Esade, also based in Spain, is part of the consortium behind the Euro-Med business school in Morocco.

“One of the objectives of the Africa series will be to show students that Africa is not homogenous, that it is not just one big basket case and that Europeans shouldn’t be too hasty in looking down on it,” says Prof Videla. “The root problems, like in South America, are internal. The institutions don’t work, there is no long-term planning and no consistency in the rule of law. All this means there is a tremendous brain drain.”

He says charity initiatives led by celebrities help African countries through their human crises, but do nothing to build institutions. “This is where the business schools, and support for them from the developed world, can play their part.”

http://www.iese.edu

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