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In a Tehran classroom sit 22 Iranian Executive MBA students listening intently to a professor of marketing, who is flown in every month from Europe.

Until recently, Iranian managers had to travel overseas for world-class executive education. But these students at the Iranian Business School (IBS), including seven women, can now have a lively exchange of ideas about customer value proposition with Damien McLoughlin, an Irish professor.

It is all due to a partnership agreed in 2014 between the IBS and Aalto, a Finnish university — an agreement that marks the first time since the 1979 Islamic Revolution that western teachers can work in Iran.

Rouzbeh Pirouz, a founding business partner of IBS, is conscious of the need for international exposure. “When I sought to obtain a licence for the IBS, I told higher education officials that Iran’s presence in world markets without the latest management trends is like playing in the World Cup without training players,” he says.

The Iranian school was founded in 2007 and has been providing business courses and workshops for up to 250 students annually since 2010. Last year, it introduced the two-year EMBA — an MBA for working managers — taught exclusively by western professors.

Decades of mismanagement, compounded by the impact of international sanctions, means that Iran is struggling with deep economic hardship, which the country’s leaders hope will be improved by a nuclear accord with major powers.

Since the victory of centrist president Hassan Rouhani in 2013, many foreign investors have visited Iran. However, the country’s education sector suffers from structural problems, analysts say, such as outdated textbooks and subjects that focus too much on theory. Many university graduates also have insufficient knowledge about how the rest of the world works.

Doctors and engineers abound — Iran graduates more engineers per head of population than anywhere in the world except the US and Russia, according to a survey by the World Economic Forum. But the Islamic establishment is still struggling with adapting humanities subjects to reflect Islamic values and prevent the impact of “decadent” western culture. Some 45 per cent of all students in Iran study these subjects, according to Iran’s Ministry of Science, Research and Technology.

The tension between Iran’s culture and that practised in the west is rooted in a long-time contradiction between tradition and modernity in the country. The US-backed Pahlavi dynasty, ousted in 1979, pushed for a secular education system but then the revolutionary leaders introduced a vague mixture of Islamic theology and modern science.

Hojjatollah Darvishpour, a member of the parliament’s education committee, is aware of the difficulties. “We cannot fully accept human sciences taught in the west while our version has not been worked on properly in the academic world,” he says. “For instance, in the Islamic economy, the practice of usury is considered forbidden but our banks are involved in it.”

Numerous unfinished projects both in the state and private sectors — notably in construction — highlight weaknesses of financial management and the need for greater education in this area. The lack of expertise in how to make strategic plans and practise marketing and distribution are other problems with which the sector struggles.

“In Iran, engineers have been automatically put in management positions even if they do not have a five-year development plan [business strategy],” adds Mr Pirouz. This practice has been in place since the 1979 revolution, when many western-educated managers left Iran and were replaced by young engineers deemed most capable of doing the work, despite their lack of knowledge.

Meanwhile, Iran faces a high number of unemployed university graduates whose education is not correlated with the labour market, says Yazdan Ebrahimi, an assistant professor of economics in the state-owned Institute for Research and Planning in Higher Education. “Universities respond to the needs of society [student choices] without heeding what kind of graduates industries need,” he adds.

At the IBS, for example, there are hardly any managers from the state and quasi-state sectors, which control more than 80 per cent of Iran’s economy.

The EMBA programme will continue for at least another four years, says Mehdi Khajenouri, chief executive of the IBS. The school will then reassess whether its programme development can still involve Aalto. His preference is to work with “top-rate European schools as much as American ones”, he adds, even though political tensions between Iran and Britain, the US and Canada keep these countries’ professors and institutions away. But it is yet to be seen whether Iran’s policy makers will see such a need.

The writer is an applicant of the EMBA programme at the IBS

Student profiles: Entrepreneurs reap benefit of western presence

Marjan Mahbod is manager of the Boutique brand, which she established more than a year ago after designing clothes for teenagers and selling them in her showroom. For now, it is a small business. But “I don’t want to remain at this scale”, she says.

After studying economics in Canada, the 35-year-old realised she had to expand her knowledge of marketing, finance and accounting. She started looking for an online MBA course at an overseas university—so that she could continue her business and look after her only child—and instead found the $30,000 EMBA programme at the IBS.

If the reading material was closer to Iranian market characteristics, it would have been better, she says. But, for now, she enjoys being taught by western teachers and getting to know her classmate entrepreneurs, many of whom run family businesses.

Ali Shahrokhshahi, a 37-year-old student who came back to Iran in 2003 after studying computer science abroad, is a strategic initiative director of Butane Industrial Group, a family business that manufactures gas water heaters, combi-boilers and radiators.

The company is one of the sponsors of the IBS and offers EMBA scholarships every year to three of its 1,300 employees.

Spending three days a month in class is convenient, says Mr Shahrokhshahi, explaining that the participation and interaction this brings make it better than online courses. The modules are appropriate, he adds, while professors “who are not only academics but also consultants working in [their] fields” make courses different from Iranian universities that largely teach theories.

“What I would like to learn the most here are best practices,” he says.

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