Out of the shadows

If the students in the latest MBA class at Mannheim Business School are anything to go by, German business education’s quest to step out of the shadows is being helped by the pulling power of the country’s successful economy and world-renowned companies.

Foreign students of 22 different nationalities make up three-quarters of this year’s 53-strong MBA group and Jens Wüstemann, president of the school, says many see the chance for an up-close encounter with German business as a key attraction of coming to Mannheim – between Frankfurt and Stuttgart – where blue-chip names from Allianz to Siemens are represented on the board of trustees.

“A lot of students tell us they would like to work for German companies,” Prof Wüstemann says. “They believe that studying at Mannheim will help them with that and give them an insight into Germany.”

Given the good reputation many German companies enjoy around the world, it is perhaps surprising that the country’s business schools have not achieved a similar standing. Yet in the international rankings, German schools have never featured prominently – hence the satisfaction and optimism at the idea that the country is now more firmly in the international business spotlight.

“The reputation of Germany and the German economy is very high at the moment. People want to know what makes Germany different,” says Michael Frenkel, dean of the WHU Otto Beisheim School of Management. “There has never been a better moment for business schools to capitalise on the interest in Germany.”

Various factors lie behind Germany’s relatively underweight position in business education. The MBA qualification was at odds with the German structure of higher education, which favoured longer, more theoretical degree courses. It was not uncommon for generations of executives to begin their working lives in their late 20s or early 30s. Mobility between companies was also less frequent.

Reforms in Europe to harmonise higher education around shorter bachelors degrees – the so-called Bologna Process – are starting to bring a younger generation out of German universities. They are perhaps readier to plunge back into education after a few years in the workplace. Just as importantly for the development of business education in Germany, employers may also see a greater need to pay attention to their ongoing training.

At Henkel, a Dax-listed family-controlled group known for its adhesives and detergents, Jessica Thiel, the corporate director for human resources, says the Bologna Process has also brought change for companies.

“It has many good aspects for a global company such as ours because there is more alignment of international qualifications. It also means we as a company have to take an active role and give a lot of thought to how it affects us,” she says. “Most graduates are now two or three years younger and have less practical experience than in the past. It can mean that we as a company have to offer more for their development, and that will definitely bring us into closer relationships with business schools.”

Daniela Feuchtinger, head of talent management at reinsurer Munich Re, also sees “more onus on companies like ours to play a bigger role in the continuing education of recruits”.

There is a need for more part-time courses for staff’s professional development, she says.

The education reforms may now be combining with international interest to raise the profile of business education in Germany. Data on the GMAT exam often used in business school admissions show that the number of scores sent to German schools has quadrupled since 2007, moving Germany from a lowly eighth place to fifth place in Europe. Taking only applications from European citizens into account, programmes in Germany received five times as many applications in 2011 as in 2007. Germans are favouring their own schools, with domestic courses becoming the primary study destination for the first time in 2011, ahead of the US. And the test data also show more younger Germans sitting the GMAT exam.

“I worked for eight years in the US and people always wondered why there was no big international business school in Germany – such a big economy with world class companies,” says Jörg Rocholl, president of the European School of Management and Technology in Berlin. “For too long German education was not as international as we see in the US or UK but that is changing now. The numbers of students demanding business education in Germany are increasing substantially.” Prof Rocholl’s ESMT was itself set up in Berlin a decade ago with endowments from a 25-strong group of blue-chip German companies and business associations, as their expression of the need for more German business education.

Munich Re was one of the companies involved and Feuchtinger says: “It was important to us to be one of the backers to encourage the spread of a European style of business education. There is a need for that in Europe and in Germany.”

Defining a German-style business education is perhaps difficult but Prof Rocholl says things such as renowned technical expertise or an emphasis on sustainability make German companies known around the world and can be imparted. At WHU, Prof Frenkel says students can absorb some of the ideas that make German business distinctive, such as involving employees in boardroom decision-making.

If German business education does manage to make more of an impact on league tables, it could be a factor in strengthening the next generation of German managers at a time when companies are waging an ever fiercer war for talent. For many German companies, foreign business students are a resource that can be harnessed in the interests of globalisation. Prof Rocholl says the MBA programme at ESMT is 90 per cent non-German – yet 60 per cent of the students remain in Germany to work after completing the course.

Rolf-Dirc Roitzheim did an MBA at Henley in the UK in the 1990s. Now head of HR development at Deutsche Post DHL, he says many German companies “didn’t know how to use the newly gained business school skills for their benefit. Today German companies see that giving employees the chance to take the extra qualification is a way of improving their own positioning as an employer of choice.”

Moreover, Roitzheim points out, big companies here are no longer just German but international. “As globalisation has progressed they have learned that they need international networks and intercultural competence of the type that a qualification like the MBA demonstrates. It has given MBAs a new standing in this country,” he says.

The enhanced regard is not limited to big companies. Prof Wüstemann says students from the likes of India and China are attractive for smaller German companies – perhaps family-owned “Mittelstand” companies – looking for inroads into those markets. “Companies are searching for students who are accustomed to Germany and can be a bridge between Germany and their own country,” he says.

If that is so, it may help some of Germany’s “hidden champions” of industry keep up their export Weltmeister status for some time yet.