Della Bradshaw: Hello, I’m Della Bradshaw, Business Education Editor at the Financial Times. A roundtable discussion between the deans of 11 top business schools was hosted by the Chicago Graduate School of Business in London on July 10th. The FT will bring you four audio extracts of these discussions, alongside transcripts on our website. Both the audio and transcripts can be found at www.ft.com/businesseducation.
In this third section, the deans answered journalists’ questions.
The participants were: Dipak Jain, dean of the Kellogg School at Northwestern University, Frank Brown, dean of Insead, Edward Snyder, dean of the Chicago Graduate School of Business, Santiago Iñiguez, dean of IE Business School, Glenn Hubbard, dean of Columbia Graduate School of Business and Jordi Canals, dean of Iese Business School.
Della Bradshaw: To begin with, I asked the deans to return to the difference between European and US business schools. These are often characterised in structural terms, the one-year versus the two-year degree for example, but are there differences in what is taught, and how it is taught? Are there differences in the content and the pedagogy?
Dipak Jain: The first difference - by the way, I’m Dipak Jain, dean of the Kellogg School of Management - this is my personal feeling....that US management education is still very US-centric. One of the issues we struggle with our students was to make the curriculum more global, and if you look at the recent curriculum changes announced by Yale, and even, we were discussing, with Stanford, they’re adding a global component to the education. European schools, I think, have done a much better job on trying to create a curriculum which is not only Europe-centric, but I think is slightly much broader.
And I am sure that my colleagues who have taught at Insead whenever I have gone there and spoken, I get a sense, and I always try to get a copy of their syllabus and others, I see that the cases are US cases, European cases, Asian cases. So, one pedagogical difference that I would say would be, that we still are very US-centric.
Now, nothing wrong with it, but one point that we have discussed in our seven deans meeting, would be to look at some company like Motorola and discuss about their China strategy, versus the US strategy, because it would be very useful for students to see how the same company operates in different markets. So, that is one.
The second, I would say, would be in terms of the composition of the students, I’m sure that most of my colleagues would add that our international students would be somewhere between 30 to 40 per cent across US business schools, at least among the top seven schools. And I was quite intrigued when I heard Arnaud and others saying that at his school, 92 per cent of the students are outside UK. So, the student body also, I think, is more global, or the diversity would be higher than what we see there.
Now, in terms of teaching, and Peter and I have talked about this thing, that US education, given that we are university-based, I have also seen that faculty members who are hard core researchers, would bring their research to the classroom quite a lot. And if you ask me to summarise, and this is, I’m speaking of ignorance about the European teaching, but a good way to summarise across seven of us in this room, would be that we really emphasise academic rigour, plus business relevance. And on the rigorous side, most of the faculty members, when they design electives in the US schools, those electives are very much driven by their area of research.
And that’s where the faculty members would come and request that, can I teach of course on this, but this is what I have been working with. So, there is more a flow of research coming to the classroom, and some of this research is what people are using, but Glenn said this morning that when we talk to practitioners, we also use that research.
So I would say that these are the three major differences, curriculum, student body and the style of teaching, which is between the US and other schools.
Frank Brown: I would just add, Della,, you said, you can’t really just take one year, versus two years and say, that’s structural difference, but it actually does affect the pedagogy. So, if you look at a programme like ours it’s 10 months, so you’ve got 13 and a half core courses and you’ve got ten electives, whereas in a two year programme, you’ve got many more electives, you’ve got an opportunity to channel into finance or in other areas. So definitely, it does affect the pedagogy.
And the other thing I would say, that the biggest change that I see is, is much more curricular development in areas around social responsibility, broadly defined. And potentially, I don’t know how many programmes in the US have a core, I know there are a couple in Europe, but a core part of the programme being some kind of an ethics, business-in-society kind of course, and that’s something that we’re looking towards.
Della Bradshaw: Recently, both INSEAD and London Business School have appointed non-academics as deans. The deans were asked whether this signified another difference between European and US schools.
Dipak Jain: And I don’t think that it’s a deliberate attempt on the part of the European schools to find a non-academic ean, I think you just go for the best person, and whoever the best person happens.
Edward Snyder: I tend to disagree. I think there is something to it.
Della Bradshaw: Why do you think that?
Edward Snyder: I think that the schools in Europe are aggressive, I think they’re very much focussed on positioning themselves. We talked about it earlier, they have less endowment. They have a bigger Europe to deal in, but they’ve gone well beyond Europe, and I think they’ve oftentimes, decided that the best person to lead their schools is a non-academic. It’s not a deliberate choice, it’s an outcome.
Santiago Iniguez: Just very briefly on, I actually coincide with Ted’s comment about the pattern in the selection, the appointment of deans who come from business, rather than academia. I mean, Frank was appointed one year ago, and Colin Buchanan (London Business School). And my perception is that in Europe, which is going to experience competition for the first time after seven centuries in the university industry, there’s going to be a need of managers, managers who actually lead the organisations and bring them to higher places. So, given that subsidies from the state are going to be cut in line with what happened here in the UK, what will happen probably is that deans and rectors, chancellors will be forced to find further sources of revenue, which means that they will be forced to become much more successful with their programmes, or rather to look for fundraising. And this will result [?] in a different profile of academic manager, probably more easily to find in management than in academia.
So, what I believe is that in the future we will encounter many CEOs at the forefront of academic organisations, but again, my feeling is that it has to do with what is the content of your job, given that European organisations, universities, schools, are going to need these management skills, will probably look for consultancies and some other lots in order to find the right people.
Della Brandshaw: One recognised difference between US and European business schools is funding. Most of the top US business schools have large endowment bases, and Deans spend much of their time fundraising. The Deans were then asked about the role of fundraising and the endowment base. How can European schools build brand equity without endowments?
Edward Snyder: Sure we hear from people who are going to leave, I don’t know if…
Glenn Hubbard: Well, I think the fundraising and endowment play two very big roles, and both people roles. One is financially, in competing for the best students, particularly given the G Net [unclear] trends that the growth in the students is likely to be in South Asia, Central Asia, where the ability to pay western tuition may be more compromised. The other is supporting faculty research.
Dipak Jain:
Glenn Hubbard: Even though we’re relatively tuition based, we’re not a rich school like Bob’s or Harvard Business school still a third of the budget every year comes from something other than tuition. So query: could we have the research mission that we have and the financial assistance we have without the endowment? No way. So it’s very, very important. It doesn’t necessarily translate into brand equity one for one but it really matters. I would notice it.
Dipak Jain: And then, there is one more point. In US business schools there is increased pressure on faculty retention, and one of the key variables there is low teaching load. And in order to compensate for low teaching load, the only way you make it through is through your endowment. My president told me very clearly, Dipak, I won’t let you go to reduce teaching load unless and until you build the endowment. I don’t want you to compensate that to executive education. So to promote research and others this becomes there.
Jordi Canals: I would like to go back to what Ted said on differences between US and European business schools in terms of management and in terms of, let’s say, global strategies and I think it’s linked up with the challenge that European schools have in terms of small endowments and perhaps financial conditions which are not as good US business schools
. I do think that when you are in this situation you have to find new ways of generating revenue. So you have to discover perhaps new programmes. You have to rely more on executive education. So you are somehow forced to become more flexible, more competitive, more efficient. And I do think that this is something European business schools have been creating a virtue out of these very specific financial need that we have.
And also I think that this variety of institutional settings and this variety of programmes that we see in the portfolio of many European business schools has to do with the fact that you have to keep innovating and developing new ways of surviving in this respect. And I do think that also this is one of the reasons why my colleagues in Europe whose institutions or schools actually offer a one year MBA programme vis-a-vie a two- year programme, find very appealing about a one year programme, which is that in terms of resource allocation they are simpler. Those are…
Della Bradshaw: The Dean’s were than asked how business schools are having a real impact on corporate social responsibility today.
Frank Brown: I’ll just give you a couple. We named our centre the Centre for Social Innovation, because we wanted to get corporate out of it because all social responsibility isn’t corporate. And we thought social responsibility was a little too confining, so we changed it. But just a couple of quick examples, one, we have an alumni round table, actually, that is focused on this issue and interacting with our faculty and then we have the most popular student club, there are two of them at Insead.
One is the energy club and one of their new initiatives is a car pooling business that actually is turned into a real business for a recent graduate. And in addition we have a club called endeavour, which is Insead development organisation. The key to us has been putting the three levels together; the alumni, the faculty and the current participants and they’ve been working together on projects. We’ve got a short course for social entrepreneurs’ that’s been extremely successful. We have another very worthy group called financial journalists that come on a reduced rate programme. Some of you may have been on that..... That’s a joke, but anyway, a couple of quick examples.
Dipak Jain: About three years ago we created a new centre called Social Enterprise at Kellogg. We call it Seek. And last year a donor came and gave quite a handsome some of money to set up a centre of social entrepreneurship. So we have now students who will go and do work making a difference. So for example, a student of mine just went to Africa and he is working with the farmers in Kenya to set up a supply chain of how they grow, and how you bring that to the market. Another student went to Nicaragua and he’s working with school children, 5,000 students. Children, they come to his centre and then he sends them to schools. In the evening they come back, they do their homework and then they go home at 6.30 at night. And these are the kids who would otherwise never go to schools. So this social enterprise at Kellogg has become a very, very big part. And this is the second largest club at Kellogg school now.
Frank Brown: That’s a great example. Can I just make a point on what Dipak said? Alumni gave us money to set up a centre. We set up a centre and now I’m desperately trying to find funds to keep it going.
Dipak Jain: Yes.
Frank Brown: That’s a very… when you talk about the difference between endowed and not endowed, that’s a stark difference.
Jordi Canals: If I may, there are a couple of things that I think are very interesting when we consider the impact that we can have on our graduates in terms of corporate social responsibility. There is one which is quite obvious, which is to help our students, our executives coming to our executive programmes actually to be very much aware that this is a dimension that they have to keep in mind. The financial dimension is not just retaining good people or attracting good people. It’s also that society today expects from us, from the business world and from business schools, something slightly different. And we have to make sure that the same way that we teach and we help people understand strategy and financial and organisational behaviour that they really understand those very social issues that are so important.
And I think this links with a very basic understanding of what we do at business schools as training for a profession. So it’s not just a place where people can network. There are obviously business school people who are networking, or where people can champion their professional careers. That’s also important. But this is not the whole story. The whole story is how we actually help develop better leaders, better managers. And in a nutshell, this is training for a profession and in this profession we need to take into account the social impact of what you do, beyond the economic dimensions of any corporation.
And there is a second dimension in terms of what the business school actually can do and does in this respect, which is that obviously the 20th century has been an outstanding century in terms of development and growth of the modern corporation and the profession of management itself. I do think that business schools have played a role here. I don’t know whether it’s a big role. Other people will have to make a judgement on it. But certainly, this is something that happened in the 20th century.
What also happened in the 20th century is that those organisations that somehow became very successful, not just for themselves but also their shareholders, but for society at large. And business schools that actually train their managers for institutions that were going to be, let’s say, market based institutions. Companies that are going to compete in more or less organised markets. The big challenge now in the 21st century is not just to keep providing people for those type of companies, but also how we at business schools help educate a new generation of managers that actually are able as well to try to tackle big leadership and managerial issues in organisations that are somehow, for whatever reasons, outside the normal behaviour and normal function of let’s say organised markets.
Certainly here you have a number of NGOs. You have the public sector. We all have the healthcare industry, worldwide, because this is an industry is in the hands of governments, but also private sector. So we see over the next few years an increasing need to actually help train our students to understand all those challenges because we’re not… The idea, that you can be successful in your company and then you forget about the rest of society, was never true. But probably today is less true than ever.
