Business Schools Worldwide Fall Short on Globalization, Report Says

February 10, 2011

Globalization is both the biggest opportunity and the greatest challenge for business schools worldwide as they struggle to keep up with the demand for graduates who can work across countries and cultures, says a report released today.

The 346-page report is the result of a three-year study by a task force of deans and scholars from top business schools worldwide. It offers a critique of the flurry of global activities that business schools have initiated in recent years.

Despite all those efforts, "a frustratingly wide curriculum gap remains alongside large risks of misdirected and incoherent strategies," says the report, issued by AACSB International: the Association to Advance Collegiate Schools of Business.

For instance, most business schools place more emphasis on studying abroad than on developing and integrating global content within the curriculum, the task force concludes.

That is largely because the number of new and prospective faculty members with significant global experience and insight is small, and schools' budgets are tight. And since scholars have relatively few outlets for publishing articles about global business issues, those who are hoping for tenure and promotions have fewer incentives to tackle complex international issues, the authors say.

The report includes nine case studies of globalization strategies used at schools on several continents. With so many choices for partnerships and programs, some business schools find the process a "paralyzing array of decisions and trade-offs," the report says.

Like Collecting Merit Badges

Robert F. Bruner, dean of the University of Virginia's Darden School of Business here, served as chair of the task force.

"So often, a successful globalization effort arises because of faculty who are passionate and knowledgeable about global business," he said in an interview this week. But "globally ready" faculty members are in short supply, the authors say.

"So many American faculty members are trained with reference to American markets," said Mr. Bruner. "But markets vary dramatically around the world, often in ways that violate standard assumptions that might apply in the United States or other developed economies." 

 To expand their global cachet, schools are under pressure to link up with partners overseas.

Mr. Bruner recounted a discussion with a business-school leader in East Asia who wanted to join forces. "In the middle of that conversation, he mentioned that his school already had alliances with 34 different institutions," Mr. Bruner said. Others have claimed nearly 100.

"It reminds me of the Boy Scout or Girl Scout who's collecting merit badges," he said.

Peter L. Rodriguez, associate dean for international affairs at Darden, added his own analogy.

"Everybody wants to link up with the best dance partners," he said. "If you're a top school in China, you're the belle of the ball." On the other hand, "a lot of schools are pretty promiscuous. Some of their connections amount to a couple of pixels on a Web site."

Mr. Rodriguez is working to start a global executive-M.B.A. program at Darden, which will bring executives from around the world together for a 21-month session that will include six two-week study trips to Brazil, India, China, Europe, Charlottesville, and Washington. The program will begin in August.

No Global 'Canon'

Even in financially challenging times, business schools need to expand their global reach, said Hildy Teegen, dean of the University of South Carolina's Moore School of Business, who also served on the task force.

"The demand is growing at an exponential rate, both in terms of the number of students globally who have entered the middle class and can afford business education, and the demand from business," she said.

At the same time, schools are struggling to provide international case studies and broader course content because of a shortage of business faculty members who have both Ph.D.'s and meaningful international business training, she says.

Another co-author is Pankaj Ghemawat, a professor of global strategy at the IESE Business School, run by the University of Navarra, in Spain. In 2009 he dismissed as "globaloney" the idea that regional differences don't matter when solving the world's business problems.

"In a world best characterized as semi-global, to attempt to reduce international management education content to a global 'canon' makes little sense," he wrote.

Courses should instead delve into the cultural, legal, and economic differences across countries and the implications these have for international business, he says.

John J. Fernandes, president of AACSB, hopes the report will spur more schools to action.

"We've been a leader in trying to globalize higher education's thinking process for some time, but we're not exactly leading a path of runners in this exercise," he said. Globalization is labor-intensive and expensive, he acknowledged,

"Many believe they can wait it out until retirement and it'll be someone else's problem."

Mr. Bruner, the Virginia dean, said he hoped the report would help business schools "pick up their game" when it comes to globalizing. "The big takeaway from this report is the sobering message that schools can't hide from globalization," he said, describing it as an "inexorable and disruptive force of change." That is true for even the most regional business schools.

"Businesses serving local constituencies may think their competitor is simply on the other side of town when, in reality, it or its suppliers may be halfway around the world," he said.

The report, "Globalization of Management Education: Changing International Structures, Adaptive Strategies, and the Impact on Institutions," is available free to members of the association and can be purchased by others. Information is available on the association's Web site.