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PUBLIC

BUSINESS SCHOOL INNOVATIONS - TRENDS

NEXT GENERATION GLOBAL STUDIO

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Business management schools are currently operating in a unique global environment. They continue to face an irregular economic landscape, they are challenged with turbulence in global political terrains and they are presented with fundamental changes in cultural and societal values.

As such, business schools must attract enrolment from a global population of students that exhibit vastly different cultural values and generational preferences. They must maintain relevance in a battered but strengthened professional paradigm and they must aim toward a constantly shifting pedagogical target. They will continue to face similarly dynamic changes into the future.

Context

Globally, business schools play an important role in the advancement of broad societal needs. Business schools not only supply world markets with individuals that are highly trained in the field of business management, they also catalyse much broader cultural, economic and political developments.

As centres of academic and professional innovation, business schools offer the world new approaches to business by fostering original solutions to complex problems.

However, this global recognition of business schools extends beyond the contributions made by students and researchers themselves; alumni and faculty members hold equally important roles in the shaping of societies through their exchanges with business communities, the direction of their research questions and their engagement with civic populations.

From a national perspective, business schools play a similarly critical role, responsible for producing future leaders in the fields of finance, marketing, real estate and related disciplines.

Business schools make significant contributions to national economic development, policy direction and fiscal strategy.

These contributions extend beyond the revenue that business schools raise from international students. A report published by Access Economics reveals that tertiary education in Australia, for example, nets the country in excess of USD 14 billion per annum, but greater still are the regional economic contributions made by alumni for the duration of their careers upon graduation.

But perhaps business schools make their biggest impact on local communities, which benefit from increases in employment, cultural vitality and economic contributions.

As professional planners, designers, architects and consultants, Woods Bagot has considerable experience in shaping the physical assets of business schools with two aims: firstly, we use property-based solutions to solve myriad problems that inhibit a school’s ability to achieve its scholarly aspirations, its operational goals, its pedagogical ideals and its financial needs; and secondly, we craft property-based strategies to realise great opportunities that would otherwise be forfeited.

At Woods Bagot, we approach projects with these two objectives – to solve problems and create opportunities.

“But perhaps business schools make their biggest impact on local communities, which benefit from increases in employment, cultural vitality and economic contributions.”

01 Business school innovations - Trendsby Matthew Lynch

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Globalisation V2.0

Business schools have long been operating in an increasingly globalised world.

The extent of globalisation was most profoundly revealed in a recent study conducted by Ronald Wall, a researcher at the Faculty of Applied Economics at Erasmus University in Rotterdam. Wall tracked almost 10,000 investment transactions that were conducted between Fortune 100 global multinationals and their thousands of subsidiaries. Of these investments, 82 percent crossed international borders; only 18 percent of transactions occurred within national borders.

This astounding statistic reveals the true extent of globalisation – a pervasive state into which MBA students graduate.

However, the challenges presented by globalisation have been changing. Most recently, the manifestation of globalisation in business schools has been materialised in two ways, both of which present fresh challenges.

Firstly, an upward trend in international student enrolment has characterised the business school industry over the past two decades. This, we know, is old news – the trend started with Anglo-American schools becoming highly attractive to international students during the early 1990s.

Throughout the following 10 to 15 years, foreign student intake increased considerably as business schools in Europe and North America became the most desirable locations for post-graduate management education.

According to The Economist, over a third of all students now enrolled at top MBA programs in the United States, and 85 percent enrolled at top MBA programs in Europe, are foreigners.

More recently, however, foreign student intake has been increasing in business schools located in developing economies. Schools in Europe and North America have since been competing on a global basis for the most attractive talent.

For example, business education in the BRIC countries (Brazil, Russia, India and China) is currently experiencing a particularly rapid increase in foreign enrolment, according to the British Columbia Council for International Education.

In 2010, the percentage of GMAT scores sent to Brazilian graduate programs from prospective international students rose to 20 percent – up from 8.3 percent in 2006.

Ibmec, one of Brazil’s top business schools, has increased foreign intake from ‘just a handful’ to over 600 out of its 5,000 MBA students. Indeed, over 20 percent of applications to Brazilian graduate programs are from foreign students.

This means that BRIC countries are attracting both locally and globally sourced talent, placing them in direct competition with schools in Europe and North America.

Secondly, business schools themselves have been opening doors in international locations and partnering with offshore business education institutions.

As early as 1991, the co-dean of INSEAD proposed that the school operate three campuses in addition to its existing home in Fontainebleau: one in Berlin, one in Brazil and one in Singapore.

Over 20 years later, many of the most well-recognised business schools operate second and third campuses in other countries.

INSEAD was one of the first business schools that opted to open an international campus. In 2000, INSEAD acted on its original aspirations by opening a lavish campus in Singapore.

In 2007, INSEAD opened another campus in Abu Dhabi. 53 students enrolled in the pioneering class of INSEAD’s Singapore campus who came together from 26 countries – 26 students from Europe and 19 from Asia.

The culture of globalised movements continues at INSEAD today, where almost 40 percent of enrolled students now switch between the school’s campuses in France and Singapore.

Other business schools have preferred instead to partner with existing offshore institutions in place of creating their own. This is a less capital-intensive strategy and requires a reduced time commitment.

Since 2006, Boston-based Harvard Business School has collaborated with the China Europe International Business School (CEIBS) in Shanghai to provide its students with executive MBA degrees.

Meanwhile, the Anderson School of Management at the University of California, Los Angeles (UCLA), and the Marshall School of Business at the University of Southern California (USC) also partner with Asian-based business schools to extend students the opportunity to study overseas.

But this trend is not contained between American and Asian universities. The Wharton School at the University of Pennsylvania, for example, has recently partnered with the Coppead Graduate School of Business in Rio de Janeiro where it sends students on a 10-week study period.

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However, the materialisation of globalised business schools has not arrived without its critics, who make arguments on two fronts.

Firstly, the validity of globalised education is brought into question, where the contextual value offered by local business environments and social customs could be lost to the pervasiveness of globalised business education and instruction.

These critics contend that while global models of education provide students with a broad internationalised perspective, these same students lack the ability to make regionally-sympathetic gestures because of their inexperience in the implementation of solutions at a locally-relevant scale.

Secondly, critics point toward polarisation between the models of education that exist within the developing and the developed worlds. This issue has most recently come to a head as the three most well-recognised institutions for business school accreditation (AACSB, AMBA and EQUIS) have started to realise the lost opportunity in ignoring schools within developing countries.

Few schools outside of the Western world maintain accreditation from these three institutions – a clear indication that polarisation exists in the standards, priorities and models preferred by western and non-western business schools.

For example, less than 2.5 percent of business schools in China, India, Indonesia, Russia, Mexico, Brazil and the Philippines maintain AACSB accreditation.

Analysts attribute this phenomenon to the increasing irrelevance of an accreditation system that was originally developed in 1919 for Westernised schools in high-income countries in North America and Europe.

Even though AACSB maintains over 1,000 member business and management schools in more than 70 countries, there are thousands of business schools that have been developed in emerging economies within the past decade that do not necessarily subscribe to the models of education accepted and promoted in the Western world. Indeed, only 5 percent of business schools worldwide maintain AACSB accreditation, most of which are US-based.

John Fernandes, President and Chief Executive of AACSB International, recognises this global shift away from the historical Western-centric model:“Even with AACSB’s significant growth since its globalisation policy was adopted in September 2000, we still have lots of room to grow, especially in the developing world, before we can truly say we have achieved our mission... One difficult challenge is the ineffectiveness of our primary product, business school accreditation, in meeting the developing world’s needs.”

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“Business schools themselves have been opening doors in international locations and partnering with offshore business education institutions.”

Fernandes’ recognition of this shift clearly demonstrates the need for business schools to concentrate on the future needs of management education as it decentralises away from the Western world.

Thierry Grange, Dean at Grenoble Ecole de Management, who has recently been appointed co-chairman of a committee of the Association to Advance Collegiate Schools of Business, agrees. In a recent interview with The New York Times, Grange shared his thoughts: “We have been American-o-centric for decades. Since 2000 you have had a revolution. Business education is booming, and more and more schools in China, Asia and Europe are saying ‘We think we are a good institution. We would like to apply to become accredited.’ This aspect of globalisation calls for a reconsideration of what we do.”

This move away from an Anglo-American model has been attracting even more attention from business schools since the onset of the global financial crisis.

Amidst local economic concerns, American and European business and management schools have struggled to maintain global competitiveness, especially as international applications have considerably weakened.

For example, the proportion of Asian students who apply to American business schools has dropped significantly over the past decade: of the Asian students who took the GMAT in 2001, 85 percent then went on to apply to American business schools; this proportion had dropped to 67 percent in 2009. Anglo-American business management schools have since needed to increase their global competitiveness as foreign students start to consider their options for education locally.

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A recent article published in The Economist goes a long way toward explaining the phenomenon of the decreased global competitiveness of business schools in the US and Europe.

Business education in the US has historically been highly introverted, with almost all case studies featuring American examples.

A similar approach has been taken in European business schools, which have focused intently on European case studies. But as business education becomes more global, it is becoming less centralised on Anglo-American industry.

Now, more than a third of the case studies taught in strategy courses in US universities feature foreign examples – an effort designed specifically to respond to globalisation and to attract foreign students.

Reversing antiquated teaching trends

This Anglo-American model of business education has also typically been highly siloed in its approach to teaching methods.

A business and management school teaches business and management; psychology students learn psychology; and a school of medicine teaches medicine. But while schools of psychology create psychologists and schools of medicine create doctors, business schools are in the business of creating future business leaders in disciplines as far afield as marketing, real estate, policy and finance.

Up until recently, there had been little discussion of how best to create an environment in which leadership could be forged under one roof with such disparate learning aspirations and outcomes.

So, schools and subjects have typically been arranged vertically in a top-down, faculty-led approach. Little horizontal integration between subjects has existed; a bottom-up approach has been resisted; and a student-centred approach has been denied.

Cross-sector research has been the responsibility of students themselves with little support or encouragement and this siloed approach to teaching has remained largely unchanged since the 1960s. ‘A guide to work-based learning’ contends that most MBA schools still focus on the same theory and analytics that they did 50 years ago. Not much integration exists between MBA schools and the other academic departments that operate within the same institution.

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The University of Melbourne School of Engineering Student Learning Centre, Melbourne, Australia

And while collaboration with other institutions, such as the partnerships between the Haas School of Business at the University of California, Berkeley, and the Columbia Business School at Columbia University, offer a degree of cross-pollination, these initiatives do not substitute inter-departmental collaborative efforts.

And because curriculum has been faculty-led, teaching has been rigorously academic in its approach. This makes little sense: while business schools realise the need for discipline-based research, industry-based scholarship and peer-led learning, most schools remain tied to the academic tradition of teacher-led learning.

Under this model of teaching, students stay on campus for the duration of their designated class, after which they immediately relocate to a more productive environment – a cafe, a library, their home.

Students are tied to tiered classrooms which are clearly inappropriate for much of the student-led discussion, knowledge-sharing and learning that characterises contemporary pedagogies.

Students leave campus periodically to pursue what is unavailable to them within their own facility – food, entertainment, business facilities, outdoor areas, childcare facilities and myriad other amenities.

Students seldom interact with their contemporaries in other departments – they don’t talk to the medical students, the architecture post-grads or the engineering community.

Meanwhile, the most contemporary and forward-looking facilities offer their students a completely different environment and learning experience. Students want to stay within the business school because it has been activated 24 hours, 7 days a week. It has become the hub of activity, the place where things happen.

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Students practice trading on international exchanges throughout the night in state-of-the-art trading facilities. Brunch is served until 3:00pm; dinner until 2:00am. There are myriad areas set up for any kind of interaction – a spontaneous encounter with a professor, a quick game of chess with a colleague, a conference room for a live video chat with a potential international employer, a last-minute 15 minute preparation session to run through a mock sales presentation.

It is what the University of Technology, Sydney, calls a ‘sticky campus’ – a place that bonds together learning with teaching, entertainment with knowledge, and students with teachers. It is porous, inviting, diverse and exciting.

But it’s not only students that are being affected by these contemporary trends. The rules for the planning, design and implementation of academic workplaces for faculty and researchers are also being rewritten.

Trends in the design of academic workplaces are being influenced by the emerging movements in professional workplaces – the fundamental theories behind academic workplaces are similar to those that have been recently recognised in the professional workplace.

This is most evident in some of the largest, most profitable and most savvy organisations around the globe, which are reaping big benefits from their investment in redefining how, when and where their employees work.

Simply put, these businesses – which include Microsoft, Rabobank, Macquarie Group, Interpolis and SABIC – want workplaces that allow unobstructed collaboration, unrestricted mobility and seamless communication.

They are removing enclosed offices, server equipment, outdated technologies and anything else that obstructs an employee from communicating physically with colleagues or accessing virtual knowledge.

The aim is to allow employees to collaborate, innovate and create. Anecdotal evidence suggests that these phenomenon increase efficiency, increase effectiveness and positively impact the corporate bottom line.

So, too, are academic workplaces being reinvented.

University of Technology Sydney (UTS) Building 5 Block A & B, Sydney, Australia

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Until recently, the design of academic workplaces has stayed much the same over the past half century. Academics are typically assigned enclosed offices, the size of which depends largely on their academic status and their seniority. The majority of academics at tertiary institutions still reside in these cells. This, if anything, has increased in recent years with the steady squeeze on common areas which were once the domain of the experience of collegiate life.

But, as has been observed in the professional workplace, significant advancements and efficiencies can be made by tweaking these designs. Academic workplaces around the globe have recently been making significant changes to the way they operate.

Academics no longer necessarily need enclosed offices – these spaces were designed for quiet activity.

Researchers no longer need permanent offices – these spaces were used to encourage the accumulation and storage of paper-based knowledge materials in the form of books and papers.

And professors no longer need large offices – these spaces were designed for individual use as well as meetings with other academics.

Instead, academics, researchers and teachers are accessing much of their material online, they are collaborating with other academics and they are engaging with content in the form of video and audio. If they need a quiet space, they can use a small meeting room. If they need to meet with colleagues they can use a conference room. Should they need to engage virtually with remotely-based colleagues, they can use video or teleconferencing facilities.

The key difference is that academics no longer necessarily need their own designated offices – Woods Bagot has observed that they are able to work with even greater efficiency, greater effectiveness and even greater confidence from a variety of other work settings.

These trends can reasonably be expected to continue into the foreseeable future. The extent to which they will affect and advance global business schools largely depends on an institution’s willingness to embrace these trends as necessary step toward achieving future target enrolments, retaining high-quality students, procuring excellent teachers and producing effective alumni. Moreover, the effect that these trends will have on the physical infrastructure of a business school is of equal excitement – the ways in which the most successful business schools will be planned, designed, built, operated and managed must be negotiated carefully to ensure that these pervasive trends are not ignored.

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– http://www.ft.com/intl/cms/s/2/25a79a4e-a252-11e0-bb06-00144feabdc0,dwp_uuid=a9543bac-edcc-11db-8584-000b5df10621.html#axzz1VtoKsYtQ – http://www.mydigitalfc.com/news/gateway-riches-324 – http://english.eastday.com/e/110825/u1a6071375.html – http://en.wikipedia.org/wiki/Business_simulation – http://www.economist.com/whichmba?page=1 – http://mbaoath.org – http://universityfinancelab.com/photo-gallery

References

– http://www.nytimes.com/2011/06/27/world/europe/27iht-educLede27.html – http://www.heraldsun.com/view/full_story/3817239/article-Russian-MBA-program-tackles-real-world-hassles – http://www.bizjournals.com/charlotte/stories/2010/03/08/focus1.html – http://www.economist.com/node/16208000 – http://www.coydavidson.com/wp-content/uploads/2011/08/110727_GIST_The_Mobile_Worker4.png – http://www.futureofcities.ox.ac.uk

– http://www.economist.com/node/18802722 – http://english.eastday.com/e/110825/u1a6071375.html – http://www.capitalvue.com/home/CE-news/inset/@10063/post/3158313 – http://www.mbaworld.com/blr-archive/mba-market/6/index.htm – http://www.economist.com/whichmba/mba-diary-was-it-worth-it – http://www.economist.com/blogs/schumpeter/2011/05/higher-education_bubble – http://blogs.hbr.org/cs/2011/05/the_business_school_tuition_bubble.html

University of Adelaide, First Year Learning Centre, Adelaide, Australia,

Matthew LynchSenior Consultant

Matthew Lynch has over six years of experience delivering highly successful strategies that are both human-based and business-drive across a diverse array of architectural, planning and design projects. He has unique experience conducting rigorous upfront research and has lectured at Columbia University’s GSAPP and at The University of Melbourne’s MSD. Matthew regularly contributes to publications such as Architectural Record, Urban Land, AIArchitect, Archinect and Conditions Magazine on a wide variety of issues.

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