UNIVERSITIES

Have biz school, will travel

Canadian MBA schools are going after the developing world’s students— by taking programs directly to them

COLIN CAMPBELL September 24 2007
UNIVERSITIES

Have biz school, will travel

Canadian MBA schools are going after the developing world’s students— by taking programs directly to them

COLIN CAMPBELL September 24 2007

Have biz school, will travel

UNIVERSITIES

Canadian MBA schools are going after the developing world’s students— by taking programs directly to them

COLIN CAMPBELL

Canada has had its share of nasty diplomatic skirmishes with Iran, from the murder of Iranian-Canadian Zahra Kazemi to the imprisonment of former University of Toronto professor Ramin Jahanbegloo. Yet ugly as those incidents were, they haven’t altogether severed Canadian-Iranian relations: consider Carleton University’s M.B.A. in Iran program, which offers Iranian students Master of Business Administration degrees in partnership with a university on Iran’s Qeshm Island, in the Persian Gulf.

It might seem like an unusual arrangement. Carleton’s home campus in Ottawa

nestles on the banks of the picturesque Rideau Canal. Iran’s Qeshm Institute, to judge from the pictures on Carleton’s website, appears to be situated on something more resembling a muddy shoreline. Nevertheless, the program, which started in 2001, has run smoothly—the school, which prior to the 1979 Iranian revolution was partnered with Harvard Business School, is academically rigorous and the students are keen and qualified, says Ian Lee, a professor at Carleton’s Sprott School of Business who has taught in Iran. The two-year degree is taught entirely in English and mostly by Carleton profes-

sors who travel to Iran. Students also travel to Ottawa for two courses. Graduates leave the $21,600 program with a prized credential: a Canadian M.B.A.

The Carleton program is only one example of what may be business academia’s biggest growth industry: offering M.B.A.s and executive training in international markets. Western business schools have been scrambling into the world’s emerging and untapped markets—from Asia to South America—to fill the developing world’s demand for First World business training and credentials. It’s a lucrative, risky, and highly competitive field.

Over the past decade, nearly 1,500 new M.B.A. schools have been launched in Asia, South America and Africa, according to research by the Graduate Management Admission Council. And there’s no shortage of demand. GMAC also found that two-thirds

of business schools saw an increase in applications last year. With growth like that, business schools have been casting their eyes far and wide for places to set up shop. Russia, Dubai and India (where there are now reportedly more business schools than there are in the United States) are all high on the list. And as the Carleton program underscores, there’s no real limit as to where a business school will go these days. The Haskayne School of Business at the University of Calgary has held executive training programs for energy

corporations around the world, including Russia, Ukraine and Vietnam. It also offers a master’s in sustainable energy development in Quito, Ecuador, and earlier in the decade offered its own executive M.B.A. in Iran for energy workers (a program it may restart next year). York University’s Schulich School of Business opened an office in South Korea last year, and has plans for Säo Paulo, Brazil and Mexico City. The Sauder School of Business at the University of British Colombia offers executive training in South Korea and

Brazil. Since 1998, McGill University has offered an M.B.A. at Sophia University in Tokyo. Queen’s School of Business does executive training in Abu Dhabi and Dubai.

China, however, is the undisputed business school hot spot—not only for executive training, but for M.B.A. programs. Schulich, which bills itself as “Canada’s Transnational Business School,” has offices in both Beijing and Shanghai, with a team there managing its projects. The Richard Ivey School of Business at the University of Western Ontario has

HOW DO CANADA’S BUSINESS SCHOOLS STACK UP?

A LOOK AT THREE MAJOR INTERNATIONAL RANKINGS.

WALL STREET JOURNAL RANKING OF INTERNATIONAL BUSINESS SCHOOLS, 2006

This annual survey of MBA recruiters asked them to rate each school and indicate their plans to recruit there. It also evaluated whether companies are hiring a school's grads for jobs outside the U.S.

Rank Country 1 ESADE Business School Spain 2 IMD Switzerland 3 Instituto Panamericano de Alta Dirección de Empresa Mexico 4 University of London (London Business School) U.K. 5 Thunderbird U.S.A. 6 Columbia University U.S.A. 7 ITESM-EGADE Mexico 8 Massachusetts Institute of Technology (Sloan) U.S.A. 9 University of Western Ontario (Ivey) Canada 10 INCAE Costa Rica/Nicaragua 11 University of California, Berkley (Haas) U.S.A. 12 Instituto de Empressa Spain 13 York University (Schulich) Canada 14 University of Chicago U.S.A. 15 University of Navarra (IESE) Spain 16 HEC School of Management, Paris France 17 University of Pennsylvania (Wharton) U.S.A. 18 INSEAD France 19 ERASMUS University (Rotterdam) Netherlands 20 Harvard University U.S.A. 21 Bocconi University Italy 22 University of Toronto (Rotman) Canada 23 New York University (Stern) U.S.A. 24 Stanford University U.S.A.

BUSINESS WEEK RANKING OF NON-U.S. MBA PROGRAMS, 2006 Business Week conducts a ranking of MBA programs every second year, based on surveys of graduates and recruiters, and faculty qualat each school measured citations in academic

Rank Country 1 Queen's Canada 2 Western (Ivey) Canada 3 Toronto (Rotman) Canada 4 IMD Switzerland 5 London Business School UK 6 INSEAD France 7 ESADE Spain 8 IESE Spain 9 York (Schulich) Canada 10 HEC (Université de Montréal) Canada Sources: FT.com, wsj.com, businessweek.com

INTERNATIONAL RANKINGS. FINANCIAL TIMES MBA RANKINGS, 2007 The Financial Times' MBA rankings, introduced in 1999, were the first major rankings to treat MBA education as a global marketplace, with American schools ranked directly against those from the rest of the world. Canada's MBA programs fell sharply in FTs 2007 rankings, which measure such factors as the employment rate, salaries and career progress of graduates; the opinions of alumni; the diversity (international and female) of students and faculty, and faculty quality.

Rank 3 year 2007 avg.rank Country 1 1 University of Pennsylvania (Wharton) U.S.A. 2 ......3...... Columbia U.S.A. 3 ......2...... Harvard USA. 3....... 3 Stanford USA 5 ......5...... London Business School UK. 6 6 University of Chicago GSB U.S.A. 7 8 INSEAD France 8 8 New York University (Stern) U.S.A. 9 ....... 8 Dartmouth College (Tuck) U.S.A. 10 10 Yale U.S.A. 11 18 Ceibs China 11 14 Instituto de Empresa Spain 13 13 IMD Switzerland 14 12 MIT (Sloan) U.S.A. 15 31 Cambridge (Judge) UK 16 14 IESE Spain 17 21 UCLA (Anderson) U.S.A. 18 26 HEC Paris France 19 16 Northwestern (Kellogg) U.S.A. 19 16 University of Michigan (Ross) USA. 19 21 Oxford (Said) UK 22 29 Manchester U.K 23 23 Duke (Fuqua) U.S.A. 24 29 ESADE Spain 25 18 Berkeley (Haas) U.S.A 26 23 University of Virginia (Darden) U.S.A. 27 .....24....... University of Toronto (Rotman) Canada 41 35 University of Western Ontario (Ivey) Canada 49 30 York University (Schulich) Canada 77 68 University of British Columbia (Sauder) Canada 90 58 McGill University (Desautels) Canada Mentioned in previous editions of Financial Times MBA rankings: 87 (2006) Queen's Canada 98(2006) University of Alberta Canada

a campus in Hong Kong, which it also uses as a base for executive programs in mainland China. The University of Toronto’s Rotman School of Management has partnerships with four different universities in China. Sauder is partnered with a university in Shanghai. These schools are competing for students against just about every other top business school in the world. “There is an enormous amount of competition. Enormous,” says Rami Mayer, director of Schulich’s international programs. In recent months, the job has taken him to India, Malta and Dubai.

The emergence of China as a business school mecca isn’t new. Business schools have long eyed the growth opportunities in that part of the world. But even as student demand has recently intensified, the competition has also become more fierce, with foreign universities entering the market and local schools becoming more sophisticated. “It’s absolutely getting more and more crowded,” says Mayer. One of the reasons is that for Western business schools, the opportunities for domestic expansion are limited. There’s little hope of doubling enrolment at home, but that type of growth is not unimaginable abroad. Still, given the demands it puts on a school’s resources (like teaching staff), it’s something that has to be carefully managed, says Julie Rowney, the director of the Centre for International Management at Calgary’s Haskayne. “It’s an area to grow, but one you have to enter with considerable foresight,” she says.

Business schools are not only attuned to the growth in Asia and elsewhere, but may be more anxious than other academic departments to capitalize on it. Business schools, after all, think a lot like businesses: their faculty are constantly researching and consulting on current business issues, and schools are often guided by advisory boards of working executives. And most Canadian M.B.A. and executive education programs charge considerably higher tuition than other aca-

demic programs, and thus have powerful incentives to find new customers and enter new markets. “We are in the business of teaching management so we believe in doing what we teach,” says Ivey’s Larry Wynant.

That led schools, fairly quickly on the heels of multinational corporations, into places like China and India. “The pace of change

and the pace of development and the aggressiveness of organizations to expand causes a buzz that affects everything that you do. It’s a very exciting place to be,” adds Wynant, who for five years was associate dean of Ivey’s Hong Kong campus.

What’s the attraction for international students? Training, the promise of a good job (placement programs putting graduates into leading corporations are a priority for business schools), and above all the cachet of a First World credential. “To get a degree from an American or Canadian university is like winning the lottery ticket or going to heaven” for many students, says Carleton’s Lee.

Canadian universities have taken various approaches to how they offer those overseas programs. The most common and cost-effective is a partnership with a local university. Most also arrange training programs for clients (from foreign governments to large corporations) that don’t require big investments in on-the-ground facilities. But some schools, such as Ivey, have chosen to set up their own campuses overseas—a move that calls for significant upfront costs.

FINANCIAL TIMES EXECUTIVE MBA RANKINGS, 2006 Similar to the Financial Times regular MBA rankings, the FTs EMBA evaluation looks at a variety of performance measures for each school: the career progress of students, faculty quality and the diversity (female and international) of both faculty and students.

Rank Program Country 1 University of Pennsylvania (Wharton) MBA for Executives U.S.A. 2 Columbia/London Business School EMBA Global U.S.A./U.K. 3 Kellogg/Hong Kong UST EMBA China 4 Trium: HEC Paris/LSE/NYU: Stern Global EMBA France/U.K./U.S.A. 5 Instituto de Empresa EMBA Spain 6 University of Chicago GSB EMBA U.S.A./U.K./Singapore 7 London Business School EMBA UK. 8 Washington University (Olin) Washington-Fudan EMBA China 9 Duke (Fuqua) Global EMBA U.S.A. 10 Northwest (Kellogg) EMBA U.S.A. 11 Columbia New York EMBA U.S.A. 12 Purdue/Tias/CEU/GISMA International Masters U.S.A./Netherlands/ in Management Hungary/Germany 13 Kellogg/WHU-Otto Beisheim Kellogg-WHU EMBA Germany 14 Warwick EMBA UK. 15 Chinese University of Hong Kong EMBA China 15 City University (Cass) EMBA U.K. 17 Ceibs EMBA China 18 New York University (Stern) EMBA U.S.A. 19 Cornell (Johnson) EMBA USA 19 IMD EMBA Switzerland 24 Western Ontario (Ivey) EMBA Canada/China 26 University of Toronto (Rotman) MBA for Executives Canada 46 University of Alberta/ Alberta-Haskayne EMBA Canada University of Calgary (Haskayne) 68 Concordia (Molson) EMBA Canada 73 Queen's National EMBA Canada 82 Athabasca EMBA Canada Source: FT.com

CANADA’S MBA PROGRAMS

Nearly three dozen Canadian universities offer MBA degrees, and the standard MBA—two years, full-time—is no longer the only way to go about getting the credential. Tuitions have climbed sharply over the past decade at most universities, but there are still bargains to be found.

Average Tuition Tuition Program GMAT Score (Canadian students) (Int'l students) (months) Alberta 585 $22,000 $44,000 16 UBC (Sauder) 620 $38,203 $38,203 15 Brock 600 $15,724 $36,378 20 Calgary (Haskayne) 620 $22,900 $40,700 20 Cape Breton (Shannon) N/A $18,960 $28,016 12 Carleton (Sprott) 611 $6,672-$8,896* $13,344-517,792* 12 to 16 Concordia (Molson) 620 $3,341-$5,265f $20,068-$25,513* 12 to 16 Dalhousie 560 $16,000 $23,260 10 to 20 Guelph N/A $25,000 $28,000 12 HEC Montréal 601 $5,8004 $23,300 12

CANADA’S EMBA PROGRAMS

Targeted at people who already have a career but want to take it to the next level by earning an advanced degree, executive normally allow their participants to remain at their jobs, pursuing the degree part-time. Tuition, often covered by employers.

MBA programs is generally high.

Name of School Average Tuition Age (CDN Alberta-Calgary (Alberta/Haskayne EMBA) 37 $55,000 Athabasca 40 $42,000 Concordia (Molson) 36 $52,000 Guelph........................................................................................................37...............................$38,500 Lansbridge N/A $19,500

All this cuts into what are normally very lucrative programs when they’re held in Canada—an international student can pay as much as $87,000 to do an M.B.A. in Canada (see accompanying table). Prices are comparable overseas, but schools must build and staff offices, and fly Canadian professors in and out. Ivey, for instance, has on average four to six faculty members in Asia each month. “They are not as profitable as doing it in North America or Europe. It’s a differ-

ent ball game,” says Schulich’s Mayer, of foreign programs. Schools are reluctant to talk about the investments they’re making given the competitive nature of the industry. But it is substantial. “Hong Kong and China operations probably account for 20 per cent of our overall activities,” says Ivey’s Wynant.

Schools that run their own programs spend more money, but they also gain more control over the quality of their offerings. Partnerships and licensing agreements are cheaper

but often rely, at least partly, on foreign universities and instructors. The Université du Québec à Montréal ran into trouble earlier this year when a former employee accused it of doing little more than selling degrees overseas. Pervaiz Iqbal, the former assistant coordinator of the school’s M.B.A. program in China, said in June that students who couldn’t even speak English (the program was taught in English) were being admitted to programs costing as much as $11,000. “They just want the diploma by paying the money,” he told the Montreal Gazette.

Given the risks, the costs, and the challenge of expanding into countries noted for political and legal uncertainties, or even troubling human rights records, some business schools haven’t been as quick to go global. The extent to which schools should branch out is a topic of real debate on many campuses, says Lee. But what can be overlooked are the benefits to professors that come from on-the-ground experience in markets that are increasingly important for Canadian businesses. “The value-added benefit has been in the human capital side,” says Lee. “By getting out to these countries we learn that business is complicated and our understanding of these countries is inadequate. We need these programs.” M