Thunderbird, the Arizona-based business school, is to launch its MBA programme in Paris and Madrid as part of a list of substantial changes to be implemented as part of its alliance with Laureate, the for-profit education provider.

The school will also launch the MBA in Brazil and Chile and further destinations are under scrutiny, says David Graves, senior vice-president of strategic initiatives for Laureate. “Definitely we would be looking at London in the future; definitely we would be looking at China.”

Thunderbird president Larry Penley says he envisages future students studying on two campuses, including the Arizona campus, as part of their degree, though some might choose to study on three or more. In Paris Thunderbird will be co-located with the grande école ESCE and in Madrid with Universidad Europea Madrid.

The details of the Thunderbird deal with Laureate, originally outlined in March, have been decided over the past nine months, though Mr Graves points out the two had “had multiple discussions over the past 10 to 12 years.”

During presentations to students and alumni Prof Penley said there had been concerns expressed over the alliance of the not-for-profit school with a for-profit company. In particular this was because for-profit education has been characterised as low-quality education in the US. “People make the assumption that Laureate is like all the other for-profits,” says Prof Penley.

He adds that alumni of the school have a strong emotional attachment to the school, which they see as a “mini UN”, and were reluctant for it to change. However, he points out that it was the Board of Trustees of Thunderbird that voted through the Laureate partnership and 60 per cent of the board are alumni of the school.

The school says there were three aims in deciding on a partner: to maintain the school’s ethos and mission; to maintain control of the brand; and to ensure the financial stability of the school.

The third of these was clearly critical as MBA student numbers stagnate and the demand for costly innovation and services increases. Under the deal, Laureate will buy the Thunderbird campus, giving the school $47m in cash. Thunderbird will then lease back the campus, but will not pay rent for the first five years. This will enable Thunderbird to pay off its debts of $24.5m and invest $10m in upgrading the campus – Laureate will contribute $20m to this.

Thunderbird is one of a growing number of US business schools that are partnering with for-profit companies to increase the scale and reach of their operations. The Kenan-Flagler school at the University of North Carolina at Chapel Hill is the pin-up for this kind of collaboration, working with technology company 2U to deliver the school’s online MBA programme, MBA@UNC.

Other well-ranked business schools, such as the Smith school at the University of Maryland, are following their lead. It is working with Pearson Embanet, part of the Pearson group that also owns the Financial Times, to teach an online MBA. And Smith’s neighbour, the McDonough school at Georgetown University, is to launch an online Masters in Finance (MSF) degree from January 2014 with Deltak, part of Wiley Global Education.

In Europe business schools have addressed the same financial and scale restrictions largely through acquisitions and mergers. In the UK, Manchester Business School merged with the accounting departing of the university and the management school at neighbours Umist a decade ago. And the University of Reading acquired Henley Business School in 2008.

In France, Skema was created through the merger of Ceram Business School and Groupe ESC Lille in 2009, and 2013 has seen two more French mergers, between Bem Bordeaux and Euromed Marseille to form Kedge Business School, and between the two schools in Rouen and Reims. The formal announcement of the new name of the Rouen and Reims alliance will be announced in early September.

Manchester, Henley and Skema have all gone on to teach their programmes in multiple campuses overseas. In the case of Manchester and Skema this includes teaching in the US.

Prof Penley says that Thunderbird also plans to increase its teaching of executive education and to become involved in multi-campus undergraduate degrees – Laureate works with 70 schools on 150 campuses. He believes that the partnership, under which Thunderbird will retain all degree-awarding powers, student selection and academic decision-making, will help the school better deliver on its global commitment. “It creates scale for Thunderbird – no question – and it increases our global footprint.”

A further benefit will be an increase in the number of faculty employed by Thunderbird. At the moment the school employs fewer than 50.

The final hurdle for Thunderbird will be to get approval from the Higher Learning Commission, which accredits the business school.

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