Dean Baker at

INCAE

MRS. BAKER WITH THE DEAN AT THE SITEWher8 the n9w buildings will rise.

Groundbreaking

In Nicaragua. the Dean participates as construction

starts on the new Central American Institute of

Business Administration. which HBS helped establish.

For Dean George P. Baker, the newfisca! year, 1967-68, started with a tripto Managua, Nicaragua, to take partin ceremonies marking the beginning ofconstruction there of a new physicalplant to house the Central AmericanInstitute of Business Administration(INCAE).

It was a pivotal event for the Insti­tute, which had been initiated throughan international effort by CentralAmerican business leaders to strength.en management training in that region.It was an eventful day for the Dean,too; the ground-breaking exercisescame as the culmination of three yearsof cooperation involving the HarvardBusiness School, the U.S. Agency forInternational Development (AID). andthe Central American business com­munity (see HBS Bulletin. Jan.-Feb.1964). Their joint labors had givensubstance to the idea of "a permanent,

autonomous center of teaching and re~

search in business administration inCentral America."

The event was attended by educators,business leaders, and government offi­cials of the six-nation "area. as well asby top officials of AID, Dean Baker,and members of the HBS Faculty.Nicaraguan President Anastasio 50­moza. as head of state of the host na­tion, was one of the principal speakers.

Permanent Institution

The Institute, known by the acronymINCAE. made up of the initial lettersin its Spanish-language name, "lnsti­tuto Centroamericano de Adminis­tracion de Empresas," will be the firstpermanent educational institution con­cerned with the regional economy tocome into being since the CentralAmerican Common Market was

founded with the aim of integrating theeconomies of the five Central Ameri­can nations (Costa Rica, El Salvador,Guatemala, Honduras, Nicaragua) andPanama.

The first class of INCAE's two-yeargraduate program leading to the de~

gree of Master in Business Adminis­tration will start in January 1968. Ad~mission to that first class will be limitedto 50 students-college graduates ormen with equivalent experience-pre­~ominantly from Central America. Asecond class of 50 will be enrolled inSeptember 1968.

The Institute's campus wi!! be builton a 170-acre site on the outskirts ofthe city of Managua overlooking LakeManagua and the Lake of Nicaragua.The site was donated to INCAE by theNicaraguan business community in co­operation with a group of neighboringlandowners. The initial building pro-

HBS BULLETIN SEPTE~1BER-OCTOBER 1967 19

NICARAGUA'S PRESIDENT SaMOZA AND DEAN BAKERIntroductions to members of the c8blnet.

DR. CLARK L. WILSON AND THE DEANCurrent head of the Institut•.

gram will provide five patio·style stu­dent residences, a library, a classroomand commons building to include din­ing facilities, and an administrativebuilding.

Viewed as a key vehicle to providefuture managers needed to accelerateeconomic and social progress in theisthmus region, the Institute has beensponsored by USAID and has re­ceived important financial assistancesince the beginning in 1963 from theagency through the Regional Organi­zation for Central America and Pana­ma (ROCAP) as a project of the Al­liance for Progress.

Fund Raising

The School recentlyeompleted a newagreement with A1D to provide eduea·tional services to INCAE through June30,1969. Meanwhile, INCAE looks tothe Central American private sectorfor some 35% to 4070 of operationalfunds during this same period; and hasbegun a S2 million endowment fundcampaign to provide a financial baselor its long-run viability as an inde­pendent institution of learning.

Last June 14, INCAE received fromthe Central American Bank for Eco­nomic Jntcgration (CABEl) a 20-yearcampus construction loan of $645,000.The loan was made from long-rangecredit of SIO million granted toCABEI by AID through ROCAP tounderwrite industrial developmentprojects on the isthmus.

Not only is the Institute breakingnew ground in establishing a school forthe graduate study of business adminis­tration as a means of attacking the

FRANCISCO DE SOLASpe8king 8t the ceremony.

THE DEAN AND SENOR DE BAYLESigning a document to be

deposited 8t the INCAE site.

shortage of managers in Central Arner·ica, but it is departing from local tradi·tion in establishing a graduate schoolrequiring full-time study and in pro·viding for the students the living facil·ities on campus required to meetINCAE's intensive academic schedule.

Over-all supervision of INCAE ismaintained by an independent CentralAmerican board of directors, com·posed of the presidents of the Insti­tute's six national committees ofINCAE graduates and other business­men who have undertaken to provideboth leadership and financial supportin this venture.

The board of directors is headed byFrancisco de Sola, managing directorof H. de Sola and Company of SanSalvador and one of the outstandingbusiness and civic leaders of CentralAmerica. In a recent statement, he un­derlined the significance of the Insti­tute for the region.

Spontaneous Manifestation

"INCAE," he said, "is a spontan­eous manifestation of the CentralAmerican private, entrepreneurial sec­tor which recognizes the need to forma corps of business leaders at all levelsdemanded by our incipient economicdevelopment. Dedicated to this task,we intend to erect a center of teachingand research in Central America whichwill serve not only the needs of the areabut which will also be useful to otherareas of the continent, from which weexpect to receive support through theparticipation of their businessmen andacademic talents. INCAE already [is]... an authentic movement having deep

20 HBS BULLETIN SEPTEMBER-OCTOBER 1967

and far-reaching effects on the eco­nomic and social integration of theCentral American Isthmus."

Other members of the INCAE boardof directors are; Gaston Peralta, repre­senting Costa Rica, manager of SanCarlos, Ltd., San Jose; Jose NovoaFlores, representing £1 Salvador, staffadvisorJasesor) of the Popular CreditBank, Central Reserve Bank of EI Sal­vador;... Ro;.crto Stein, representingGuatemala, manager of the Guatemal­an Construction Company, Inc., of

---dtateWOlIa. City; Zacarias Bendeck,representing Honduras, general man­ager of the Central American MatchCompany, Inc., Tegucigalpa; ArnoldoSolorzano, representing Nicaragua,president of Solorl.3no Villa PereiraEngineering Company, Inc., Managua;and Joaquin Vallarino, Jr., represent­ing Panama, general manager of CocaCola of Panama, Panama City,

Some of the Key Men

Curre,:,t head of the [nstitute duringthis organizational phase is Dr. ClarkL. Wilson, who prior tojoining INCAEwas for two years Ford FoundationVisiting Professor at the·School and aformer vice president and director ofresearch of the New York advertisingfirm Batten, Barton, DurSline & Os­born, Inc. He was appointed rector inJanuary, after having served earlier asacademic advisor to INCAE from theSchool. Dr. Ernesto Cruz, Nicaraguanlawyer, educator, and rector-elect, isscheduled to take over leadership ofINCAE on July 1, 1968. Currently, Dr.Cruz is completing requirements forhis doctorate in economics from Har­vard. He will spend the coming fallterm at the Business School in prepara­tion for assuming his duties at INCAE.

Academic advisor to INCAE fromthe School is Dr. Charles H. Savage,Jr., who will also head the visiting pro­fessors from Harvard. The BusinessSchool has agreed to supply up to halfthe Institute's initial six-man facultyuntil staffing can be completed withteachers of business administrationfrom Central and South America.

The INCAE project began in thespring of 1963, when the late PresidentJohn F. Kennedy wrote to Dean Bakerrequesting that the School undertake aresearch ,program on the feasibility of

management training in Central Amer­ica.

"My recent talks with the Presidentsof the Central American nations re­emphasized our mutual concern for therapid development of human resourcesin this critical area," President Ken­nedy wrote. "The participation of theBusiness School in a program tostrengthen management would consti­tute a vital step toward sound regionalintegration, a major objective of theAlliance for Progress,"

During that summer of 1963, a sur­vey team from the School interviewedapproximately 400 Central Americanbusinessmen and concluded that agraduate school of business adminis­traton would be most useful but that,to achieve maximum effectiveness, itwould Deed to develop case and coursematerial reflecting the distinctive reali­ties of the Central American businessscene (see lIBS Bulletin, January­February 1964).

To this end, a team of BusinessSchool Faculty members started im­mediately, under an AID grant, to dothe research that to date has producedfor the JNCAE library approximately100 Central American business casesand background papers, Another 250cases, selected chiefly from the files ofthe School as applicable to CentralAmerican business problems, havebeen translated into Spanish for use byINCAE.

First Steps

As lhe first steps in building a strongInstitute, [NCAE has conducted foursix-week-long advanced managementcourses in different locations in CentralAmerica each summer; a total of 181Central American business executivesnow comprise the initial alumni ofINCAE. These INCAE advanced man­agement courses were held in Antigua,Guatemala; Boquete, Panama; SanSalvador, EI Salvador; and San Jose,Costa Rica. They were manned withHBS professors.

INCAE's fifth advanced manage­ment course started last July 5 inPanama City. Dean Baker headed theHBS Faculty at the opening cere­monies, as one ofseveral visits he madein Central American countries duringthe week of July 2, including talks toINCAE alumni and other business

leaders in Guatemala City and SanSalvador.

In another example ofHarvard-Cen­tral American cooperation activatedby the INCAE project, a total of 17Central Americans have studied for ayear at the School in its InternationalTeachers Program. That program pro­vides business educators from aroundthe world an opportunity to pursuetheir special fields of study and to gaindirect experience with the case methodof teaching, and has been utilized byL"J"CAE to train a group of young Cen·tral Americans from whom INCAEcould draw members of its faculty.

Self-Liquidating Assistance

The Harvard Business School-inaddition to providing training for fu­ture INCAE faculty members, develop­ing research material indigenous toCentral America, furnishing membersof its own Faculty for the MBA pro­gram on an interim basis, and supply­ing teachers for the advanced manage­ment programs each summer-is alsohelping INCAE develop a library andstaff to support the educational re­search programs. This assistance is in­tended to be self~liquidating, however,diminishing gradually as INCAE de­velops a sound basis to move forwardon its own as an independent, autono­mous school and an important vehiclefor economic development in the isth­mus region.

The motive force of progress behindthe birth of INCAE is caught in thestatement of purposes approved by theJnstitute's board shortly after it wasformed.

"Finally," the board wrote, "it is theInstitute's purpose to enlighten andinspire all of its activities with a fullconsciousness of the heavy responsi­bility which those engaged in manage­ment and its teaching have toward thesocial and economic problems of thecommunity in general.

"The Institute will always seek to re­veal and clarify the web of relation·ships which tie business and its pro­prietors to other elements in society sothat the eJtpansion of enterprise maylead to the construction of a strongsocial and economic framework withinwhich democracy and justice mayflourish." •

HBS BULLETIN S~PTEMB~R-oCTOBER 1967 21