Another interesting Bizweek article

Interesting. Worth a read.

How Western Business Schools Should Play Asia

Asia is where the growth is, so B-schools need to prepare their MBAs for an Asia-centric future. Here are a few things smart B-schools can do to keep up

Aha. So western B-school grads will polish up their Asia expertise. Am reminded of Shri Kishore Biyani's response to an audience question:

"Are you worried that Wal-Mart and Tesco are coming to India? How will your group compete with them?"

He replied (If I recall correctly):

"So what if they are coming? They should be worried about us because this is our backyard."

Or something to that effect.

Similarly, Asian B-school grads needn't exactly be worried IMO. Its always better to be prepared though.

As the ice hockey legend Wayne Gretzky astutely noted, one should "skate to where the puck will be, not where it is now." In management education, the puck is moving rapidly toward Asia. Western business schools that do not figure out how to play the Asia game effectively run a serious risk of ending up as regional players.

Aha. So it was Sri Wayne Gretzky who said those golden words. Its kind of the cornerstone of the formal analysis of strategic options, in many ways.

Well, where's the evidence Asia is going to dominate and all, you ask? Good, hopefully the MKTR course has taught janta the value of healthy skepticism. Don't buy anything at face value. Ask for evidence, reasoning. Look for assumptions implicitly or explicitly made. Etc etc.

Anyway, here's the good stuff (evidence) that Asia's rise is far from ordinary.

Consider a few facts: Asia today accounts for over a quarter of the world's gross domestic product and is growing at more than twice the pace of other regions. Within two decades it will constitute almost half of the world's GDP and be larger than the U.S. and Europe combined. Asia is also becoming more Asian. Intra-Asia trade presently accounts for about 54% of all cross-border trade by Asian countries. By 2025 this figure will be closer to 75%.

Importantly, too, the composition of the world's 500 largest corporations is changing rapidly. In 1995. companies headquartered in China or India accounted for only five of the 500 largest corporations in the world. By 2009 the number had grown to 44. It could easily reach 150 by 2025. Add to this the large number of corporate giants headquartered in Japan, South Korea, Southeast Asia, and West Asia, and it is not unlikely that by 2025, half of the world's 500 largest corporations could be headquartered in Asia.

"OK", you yawn. "That's old hat. Change is constant only. People will still go west for the top B-school edu and return to work in Asia maybe. I still don't buy the alternate hypothesis. The Null still rules - all this growth and all is just random variation. The pendulum tomorrow could swing away from Asia just as easily." You rationalize.

Think again....

Note also that, in the case of many non-Asian multinationals, Asia accounts for a large and growing proportion of its middle and senior managers' responsibilities. In short, the global market for management education is rapidly becoming Asia-centric.

Aaha. This lady's good. She's written a crisp, pointed no-BS column. I liked her style.

Most business schools are analogous to diversified companies with multiple product lines—related yet distinct in terms of target customers, value propositions, and value-creation and delivery systems. As such, the rise of Asia has different implications for different product lines: undergraduate, MBA, EMBA, and executive education. Since faculty research and doctoral programs have always been extremely global, these require the least amount of tinkering.

Wow. creative. Its a fresh new way to look at and thnk about the B-school.

In the case of programs that involve large numbers of students over a multi-year time frame (such as the four-year undergraduate degree program, the two-year full-time MBA, and the three-year part-time MBA), we deem it unwise to consider building an Asian footprint, except in those rare cases where a generous host government is willing to underwrite all or most of the costs. Large numbers and long duration make these programs very resource-intensive. For such programs, creating an Asian footprint would subject the Western business school to heavy startup costs, tough competition from local players, lower fee structures, and extremely severe resource constraints in terms of top-tier faculty.

Wow. See? Recommendation #1. Very simple, neat, elegant, sensible.

The right approach for these programs is to stay confined to the home campus, attract a reasonable proportion of bright Asian students, and transform the learning content and format with the goal of making graduates "Asia smart." One of the best ways to do this is to require that every student undertake immersion field visits to at least two Asian countries—preceded by intensive classroom learning about the country to be visited and capped by systematic debriefing and analysis of the lessons learned. Field visits, however, cannot be the sole strategy to transform the content of learning. Business schools also need to invest in helping their faculties become more knowledgeable about Asia so the content of regular on-campus courses becomes more global and less Western-centric.

Ok. Recos 2 and 2a served up.

You also know now where the competition for plum Asia region posts and jobs will come from. Again, before you start to feelunsure, remember, Asia is *your* backyard.

OK, but you aren't in some regular MBA. Yours is an accelarated, almopst exec style program. No?

For a growing number of business schools, the executive MBA has moved from the periphery to the center and is rapidly becoming one of the core programs. The short duration (typically 18 months) and modular format (four to six consecutive days once per month) of the EMBA program makes such offering extremely amenable to globalization.

Now for the whopper....

We predict that by 2020 the most successful EMBA programs will be those that are taught across multiple continents, include at least two Asian locations, and are the product of a formal long-term collaboration among two or three business schools, each with its home base at one of the teaching locations.

See? Projecting/extrapolating anything that far (into 2020 and all) should be treated with caution only. But still, how interesting and exciting, eh? "Go to where the puck will be!".

Now, look at her reasoning and the clean logical flow from premises to conclusion. Oh, I liked her style very much indeed. She knows what's she's talking about, quite clearly.

Our logic is straightforward. First, in order to excel, managers need deep, on-the-ground understanding of the world's major economies. In most cases such understanding will be better provided by local experts than by a faculty member based in the U.S. or Europe on a short visit to the foreign location. Second, ambitious managers also need tight interpersonal linkages with colleagues who are native to, grew up in, and are embedded in these economies. These linkages (in terms of both number and strength) are most naturally developed when the EMBA student undertakes the entire 18-month program with a cohort of peers rooted in different economies and cultures. Third, by leveraging the geographically complementary resources, relationships, and reputations of partner schools, collaborative EMBA programs are likely be both more effective and more efficient on all key dimensions: marketing, the teaching-learning process, operations, and placement. Finally, students who graduate from dual-degree programs (such as the INSEAD-Tsinghua EMBA or the Kellogg-Hong Kong UST EMBA) will have the added advantage of lifelong memberships in different and non-overlapping alumni networks across two or more continents.

It all boils down to ROI. And I have little doubt that Asia prsents a much healthier, sustainable low-cost high-growth killer-combo that is unmatched anywhere in the emerged markets.

For many of the leading Western business schools, the toughest issue regarding nondegree executive-education programs pertains to pricing. Notwithstanding the fact that companies such as Tata Motors (TTM), Infosys (INFY), Huawei, and Haier are large global corporations by any measure, it is critical to remember that they are creatures of an extremely cost-conscious environment. More often than not, a lower cost structure is also one of their primary sources of global competitive advantage. As a result, they tend to be price-conscious buyers and tough negotiators.

And

Whether or not a Tata Motors or a Huawei will be willing to pay a premium price to a Western business school—relative to a top-tier local school—will depend entirely on two factors: one, whether or not the Western business school can make a persuasive case that it offers added value; two, whether or not it brings brand cachet as a "thought leader." Faculty from a top-tier local school will almost always bring a better understanding of the local environment. The Western business school must be able to prove that the expertise of its faculty on globally important subjects will more than compensate for any weaknesses in local knowledge.

Like I say, India alone is more diverse than the entire G7 put together, what to say of the whole of Asia. Also, increasingly market opportunities rely heavily on localized conditions and peculiarities. IMHO, it will be a tough case to make for the non-local B-schools.

Partnering with a local school on an as-needed basis can be another strategy to address this weakness. Aside from making the case for added value, it is also important to note that premium pricing is impossible without a top-tier brand image. Even schools such as Harvard, Wharton, or INSEAD that enjoy the highest rankings in global surveys need to keep investing in brand-building efforts. Several of the leading local players in countries such as China, India, South Korea, and Singapore are extremely ambitious. They are also rapidly building the financial muscle to recruit top-tier PhD graduates and faculty from Western business schools to try to leapfrog into the ranks of the leading global schools.

In sum, Asia is different, diverse, and dynamic. To Western business schools it offers vast new opportunities but also serious competitive challenges. In designing their Asia strategies, business school deans need to undertake the analysis for each product line separately. They should also never forget the central maxim of business strategy: If you don't have a competitive advantage, don't compete.

Oh, Ok. It is a dual authored article. SO credit goes to both authors.

Read it all, though I believe I've covered like 80% of the article here.

Sudhir