Top schools face globalisation challenge

Traditional institutions may find it difficult to embrace multiculturalism

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Historically, business schools are a US phenomenon. Their growth in much of the 20th century coincided with the worldwide predominance of American businesses. US business methods were the model that others tried to emulate. Likewise, the US model of business education inspired the creation of schools in other countries.

Within the EU, successful businesses became increasingly multinational, as did top European business schools. More recently, the centre of gravity of the world economy has shifted towards emerging markets. Since 1995 an astounding 80 per cent of world market growth has taken place in these economies, and half of that in low-income countries.

Has the business school community adjusted to this shift? Many business schools measure internationalisation in terms of the number of international students in their programmes and by that yardstick consider themselves to be globalised. However, teaching foreign students is not the same as preparing them to operate comfortably in different national environments.

The growth of inter- national investment and cross-border trade in goods and services challenges US and European businesses to operate in more unfamiliar institutional and cultural environments, not only in the Bric countries but also in the diverse smaller economies worldwide.

The extent to which business schools prepare MBA students to thrive in such environments, as well as domestically is a more relevant metric of internationalisation. What does it take, beyond a solid command of core business school knowledge, for MBAs to function in such markets? The culture – in the broadest sense, encompassing familiarity with business, government, as well as social customs – is of the essence. For example, Swedes expect dinner guests to show up on time, while in Peru the hostess would be startled if the doorbell rang at the appointed hour. This may seem trivial, but it is not. Business success in foreign environments, especially in emerging markets, depends in large part on becoming accepted. Consistent anecdotal evidence from Africa and other emerging markets suggests that graduates of global business schools often fail in this regard.

A number of schools have achieved a degree of globalisation by incorporating multilingual study and opening campuses overseas. They also require students to spend a portion of their residency in other countries, although usually in other advanced economies or one of the Brics, so that not many students experience conditions in fast-growing frontier markets in Africa and the smaller, emerging markets elsewhere.

Short internships and experiential projects abroad are helpful, but when it comes to moving along the spectrum from provincial to cosmopolitan, far deeper experience of operating overseas is needed.

However, embedding such opportunities into a business school’s core offerings means deep institutional changes that could take years to implement successfully and which most schools might be unwilling to undertake.

Top business schools may be victims of their enormous success. They have grown to become the leading lights of business education, building layer upon layer of pedagogic excellence and shaping accreditation criteria in the process. Their very success, however, means that they only slowly embrace globalisation, in the sense of preparing students to adapt easily to a range of linguistic, institutional and cultural environments. Meanwhile, younger schools, especially those in emerging markets, although having fewer and less experienced faculty, may also have fewer traditions. They may also enjoy a greater degree of freedom to innovate, to the envy of deans of more established schools.

Perhaps some of the best of these young schools will have an easier time embracing multicultural- ism and globalisation than the traditional schools.

Jonathan Doh is the Herbert Rammrath chair in international business and director, Center for Global Leadership at the Villanova School of Business. Guy Pfeffermann is chief executive officer of the Global Business School Network

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