Going global: for a nation, exporting management education to other countries is strategic - Viewpoint

University Business, May, 2002 by Patrick Clinton

HOW GLOBAL SHOULD A COMPANY GO, AND HOW QUICKLY? HOW many new markets should it enter? What will it cost? Where can needed information be found? What about partnering for knowledge, connections, and specific functions? If these are the questions many businesses are asking themselves these days, that means that business schools are faced with a similar-looking list of questions. Should they convert their approach to a fully global approach to business education? If not, how far should they go in accommodating students and corporate clients that need global expertise? What kinds of resources will it take to bring in knowledge about new markets and new approaches? Can they afford to develop it on their own, or do they need partners abroad? And what are the implications for faculty roles and governance?

Recently, I spoke about such challenges with Patrick Molle, president of the French business school Ecole de Management de Lyon. E.M.LYON is one of France's most innovative, entrepreneurial business schools. With about 2,000 MBA students (a quarter non-French), and an additional 1,500 students in executive programs, the school has an extensive network of exchange and dual-degree programs, plus worldwide offices that not only recruit students but support the school's international business in executive education, courseware, etc. When I spoke with Molle, the school was in the process of spinning off its executive education program (already set up as a separate business unit) as a for-profit subsidiary, with the hope of attracting corporate clients--and even individual students--as investors.

E.M.LYON is committed to the idea of global business, but it faces some real constraints. Compared to giants like Harvard and Wharton, it's small, and 90 percent of its operating budget comes from tuition and fees. Though E.M.LYON is fundraising, it doesn't have the kind of endowment that would allow it to innovate without keeping one eye firmly on the marketplace. (An example: E.M.LYON won't develop an online course until it finds a corporate client to pay for the original development costs. After the client is served, the school creates a new version of the course, minus proprietary information, for its own use.) It simply can't afford to retool as a global business school.

What it can do, Molle explained, is partner. And over the past few years, E.M.LYON and Canadian counterpart Ecole des Hautes Etudes Commerciales (Montreal), have been building the AEA Alliance, a "cross-regional business school." AEA stands for the Americas, Europe, and Asia, and it aims to have members from the European Union, NAFTA, MERCOSUR, and ASEAN. In addition to E.M.LYON and HEC-Montreal, membership consists of Thunderbird Graduate School (USA), Universidad de Belgrano (Argentina), Lingnan University College (China), and Warwick Business School (UK).

AEA is based on two commonsense assumptions: First, that while some large companies do need to become fully global, others need to expand incrementally into a single new region at a time. Second, that there is not one new global way of doing things, but a need to respond to the way business is carried out in different regions. "Globalization doesn't mean a new way of doing business in the world," said Molle. "It means respecting local specifics. We know that in Europe, for example, management skills are quite different from management skills in the States."

For most companies, globalization will not be a single all-embracing change, but rather a series of border crossings that will require learning and training. AEA's web of partnerships extends the resources of each of the member schools, while letting students and corporate clients continue to work with familiar institutions.

AEA's concept is straightforward enough, but it's not easy to put into practice. There's a need to find partners with the governance structure that lets them commit to taking part in projects. And the Alliance's plans for the near future--sharing faculty, giving students at member institutions access to the other members' placement offices, linking IT systems--all require a level of trust that goes well beyond conventional student exchange or dual degree programs. "The president of Thunderbird told me we need partners that like to take risks--including financial risk," said Molle. "Many traditional institutions can't do that." For schools like Molle's, though, the choice is between taking risks and finding themselves left behind. "We are convinced that tomorrow we will be confronted with new competitors, corporate universities, consultancy firms, and probably companies coming from the entertainment industry," Molle told me.

In the end, what's at stake isn't just E.M.LYON, but the health of business in the region. Said Molle: "You need to be able to train people to do business your home way--for example, the way America has taught China to do business with the U.S. For a nation, exporting management education to other countries is very strategic."