How business education is adapting to globalisation

SINCE their very beginnings, business schools have focused on international trade. When the Aula do Comercio was set up in Lisbon in 1759, one of the four subjects taught was the “study of weights and measures from different countries [and] methods for the exchange of currencies.” The Imperial Export Academy in Vienna was created in 1898 with the express aim of preparing students “for employment mainly in international trade.” From 1902, you could study a Bachelor of Commerce degree at university in Birmingham, while schools in the British Empire taught people how to do international business. Some American schools were founded with the aim of internationalising trade, and from the late 19th century, Chinese students went to the likes of Harvard to learn how to build foreign markets for their goods.

Over the past two decades, of course, we have seen a further boom in globalisation, largely as a result of the growth of knowledge economies. Business schools have caught the zeitgeist, and a recent survey of schools’ mission statements found that 69 per cent contained some variation on the word “global”.

But are their mission statements any more than lip service and woolly aspiration? On the face of it, business schools have grasped globalisation enthusiastically. Barely a week goes by without a school announcing a tie-up with one in another part of the world – these days, it’s often an established American or European school building bridges with a newer one in a boom region such as Asia or the Middle East. Schools like to boast about the numbers of countries represented on their flagship MBAs, and rave over the contacts that you can make with future business leaders from all over the world. Lots of exchange programmes are available, which can send you to all corners of the globe.

Not everybody is convinced, however, that this is a meaningful preparation for a globalised market. A recent report by the AACSB (the Association to Advance Collegiate Schools of Business, a body that accredits business schools) took a detailed look at the ways in which business schools prepare students for globalisation. One of its authors, Professor Pankaj Ghemawat of the IESE school in Barcelona – where he teaches a course on globalisation – argues that in general they are failing. While they concentrate on their links with schools in other countries and their exchange programmes, “increasing internationalisation basically means becoming a specialised segment of the travel and hospitality industry.” It might be nice to go and spend three months working in Guangzhou, but does it really teach you anything valuable about running a multinational corporation?

Also, he argues that most schools simply don’t have the resources to even do this. Of the 12,000 schools that are teaching business degrees, “maybe a thousand of them – maybe as few as a hundred – can really afford to assemble internationally diverse students and faculty or institute extensive (and expensive) foreign immersion requirements, let alone set up research centres or campuses overseas,” Ghemawat writes. “90 to 99 per cent” of schools just don’t have the cash. Even if that was the best preparation for the future marketplace, they couldn’t do it.

Given all of this, Ghemawat argues, the only real way to prepare students for a globalised marketplace is through changes to schools’ curriculums, which should address the cultural, administrative, political, geographic and economic differences between countries. The claim – which he makes in more detail in his forthcoming book World 3.0 – is that visiting factories overseas is nice, but the serious study of labour market regulations and cultural attitudes to protectionism are more useful.

For people with a global outlook this raises some serious questions. In recent years we have all been told that the old Western economies are in decline and that the future lies in the East and the other emerging economies, a trend that was accelerated – so the argument goes – by the financial crisis. This might have suggested that the forward-looking businessperson ought to think hard about heading to, say, China, India or Brazil for their MBA. But Ghemawat’s argument suggests that this is not necessary. If learning about globalisation is about good faculty teaching state-of-the-art courses, then maybe you are better off looking for good schools. Paradoxically, globalisation means that location doesn’t matter and it may lead to an entrenchment of the old order.

This is the view of Paul Danos, dean of Tuck business school in the US.

In terms of curriculum, he says, there has been a massive convergence in recent years. “If you went to a business school in India, America, Europe or Japan you would find that they teach fundamentally the same topics,” he says. There’s no way that an American school would teach only American case studies, and when they are studying entrepreneurialism in Chinese schools they look at Silicon Valley. “Schools want to look at the gold standard, and they don’t care if that is American, Chinese or German.” The fierce market in business schools, plus the global marketplace for faculty, means that if Ghemawat’s ideas are adopted, they will quickly be adopted everywhere.

What you should look for in a good school, then, is not the curriculum, but the way that it is taught. And here, the old schools have a huge advantage – they are rich enough to teach well. Small-group and one-to-one teaching are expensive and “unless you have a ton of money behind you it is hard to set up that sort of school,” Danos says. American schools have been raising money for a hundred years – they run on endowments and fund-raising, they get a lot of money from alumni.

It would take decades for schools in India and China, say, to reach the same level. And even then, would it be worth “duplicating something that is already there” in America and Europe? Even if in twenty years time the American economy is no longer the world’s biggest, so what? “Look at how small Switzerland is, and at the power of Swiss banking,” says Danos. Just because India or China has a growing economy, it doesn’t follow that it is the best place in the world to go for your business education. In fact, we are more likely to see movement in the opposite direction. Newness has sparkle, but oldness has its attractions too. “Globalisation,” says Danos, “goes both ways.”


Increasingly, business schools are developing ties with other schools in different parts of the world – European and American schools with Middle Eastern or Asian schools, for example. But just how valuable are these relationships? Sometimes they can be “like speed-dating”, says Robert Bruner, dean of Darden business school in Virginia.

A truly global business education has to aim for a deeper understanding of the way that business is done around the world, and rather than being a stand-alone part of a business education globalisation should “infuse” it, says Bruner. This requires a mixture of classroom teaching and time spent overseas.

To address this, Darden is launching the Global Executive MBA later this year, which will send students to five financial centres all over the world.

“Business education is moving in the direction where it is more experiential,” says Bruner, who was the chair of the AACSB Globalisation of Management Education Task Force. “The intention is to transform students to become completely competent players on the world stage.”

The first cohort, which will start in August, will spend time in China (Beijing and Shanghai), India (New Delhi and Calcutta), Brazil (Rio and Sao Paulo), Europe (Berlin, Paris and London) and in Washington DC – on Darden’s doorstep – where they will get to spend time in the IMF, the World Bank, not-for-profit organisations and think tanks.