logging in or signing up Management Education pjenster Download Post to : URL : Related Presentations : Share Add to Flag Embed Email Send to Blogs and Networks Add to Channel Uploaded from authorPOINT lite Insert YouTube videos in PowerPont slides with aS Desktop Copy embed code: Embed: Flash iPad Copy Does not support media & animations WordPress Embed Customize Embed URL: Copy Thumbnail: Copy The presentation is successfully added In Your Favorites. Views: 10321 Category: Education License: All Rights Reserved Like it (12) Dislike it (0) Added: January 28, 2008 This Presentation is Public Favorites: 11 Presentation Description This is a briefing on major trends and issues for business schools, with focus on Asia/China. If you comments or new information, please send it to me at email@example.com. www.perjenster.com Comments Posting comment... By: Tejwani (23 month(s) ago) hey this a wonderfull preso guys ....keep up th good work .... Saving..... Post Reply Close Saving..... 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See all Premium member Presentation Transcript Slide1: Market Situation, Trends and Strategic Issues for Business Schools The “Business” of Management Education: A Strategic Analysis of the Industry Prof. Dr. Per V. Jenster CEIBSSlide2: Provide a review of the current situation of the market, Identify the trends witnessed by the industry and Discuss certain strategic directions pursued by educational institutions in their efforts to stay competitive competitive. The purpose of this presentation is to … Acknowledgements & Disclaimer The information contained herein has been obtained from sources believed to be reliable. I would particularly acknowledge research assistance from A.Khanna, S. Chander and P. ManchorSlide3: The presentation is intended to promote a discussion of how CEIBS will respond to future challenges and refine its position.The outline of the presentation is divided into three sections: General Overview 1 Industry Dynamics 2 Strategic Options 3 Management Education Industry The outline of the presentation is divided into three sectionsPresentation Plan: General Overview 1 Industry Dynamics 2 Strategic Options 3 Management Education Industry Presentation PlanSlide6: The global management education market stood at USD 22 billion in 2003 and is expected to grow at a CAGR of 10-12 percent … Source: Friga, Bettis and Sullivan 2003 The management education market includes: Undergraduate, graduate and PhD courses in the field of management All program variations, including full-time, part-time, distance-learning (including e-learning), executive and specialized programsSlide7: The growing demand for management education has led to a massive increase in colleges providing management programs... Source: Global Guide to Management Education (2005-06) The following table provides the indicative list of business schools that provide management education in 40 countries: There are more than 7,666 business schools providing management education in 40 countries. The list is not comprehensive as there are several countries not included in the analysis. While there are no clear statistics on the total number of business schools worldwide, the number is huge.Slide8: Source: Global Guide to Management Education, 2005-06 Global demographic trends are also providing an impetus to the management education industry… Source: Global Guide to Management Education, 2005-06 … So what if the demand in Asia approached that of Europe and the US?: … So what if the demand in Asia approached that of Europe and the US? Population in Age Group 25-29 (In million) Source: Global Guide to Management Education, 2005-06 Slide10: US continues to be the largest management education market… US has around 1,500 business schools providing undergraduate and graduate management programs. There is declining trend observed in the total number of undergraduate enrollments for management degrees. The number of bachelor degrees awarded declined from 250,237 in 1992 to 230,425 in 1999; however, purely based on demographics (available on previous slide), the trend in undergraduate enrollment is expected to reverse in the near term. The graduate management degree continues to demonstrate significant growth evident from the number of enrollments (104,618 in 1999 vs. 82,364 in 1992). Current Market Structure The following three types of players are providing management education in the US University-based business schools (includes AACSB affiliated schools) For-profit institutions Others including executive development centers, consulting firms, independent consultants, and company-based training centers and corporate universities Association for the Advancement of Collegiate Schools of Business AACSB (International) affiliated schools control the leading share of both the undergraduate and graduate management education market. However, the share has declined from 79 percent in 1992 to 72 percent in 1999 for the bachelor’s degree and from 90 percent in 1992 to 82 percent in 1999 for the master’s degree. Supply Characteristics Source: Management at Risk, AACSB International Slide11: Distribution of MBA Enrollment (2001-2003) Sources: The Global MBA Marketing Network US is the market leader in graduate management education with 80 percent of the global market ... Source: B-School by the Number, AACSB International MBA Market Share by Type of Institution (2003) US has 850+ business schools (2003) offering MBA to 120,000+ graduates every year. US business schools accounted for about 80 percent of the world MBA market in 2003. Changes in consumer demands have led to the proliferation of part-time and distance-learning MBA programs, as students try to balance their career objectives with attaining financial stability. The percentage share of foreign students in MBA programs has registered a decline. Full-time MBA students in the US on temporary visas decreased from 32 percent in 2002-03 to 28 percent in 2003-04. US business schools have pro-actively started funding institution expenses through public endowment or private gifts and contracts. According to AACSB, around 13.7 percent of annual operating funds of US business schools came from private donations in 2002-03. MBA Market DynamicsHowever, the US is gradually losing its dominance in the global MBA market: US business school lost 0.43% of the US market. UK, Spain and France gained 0.18%, 0.08% and 0.07%, respectively. US business school lost 13.26% of the Western European Market. Greece, France, UK and Spain gained 3.19%, 1.77%, 1.57% and 1.2%, respectively. US and Spain business schools lost 0.79% and 0.97%, respectively, of the eastern European market. Canada, Germany, and the UK gained 1.17%,0.93% and 0.5%, respectively. US business school lost 7.23% of the Asian market. UK, Canada, China and France gained 2.19%, 1.99%, 1.44% and 1.02%, respectively. US business schools lost 14.88% of the Central Asian market. India, UK, Canada and Singapore gained 4.54%, 3.05%, 2.92% and 1.23%, respectively. However, the US is gradually losing its dominance in the global MBA market Slide13: Europe is gaining a stronger foothold in the worldwide MBA market due to increased mobility towards its shores Europe has 200+ business schools offering MBA, 20,000+ MBAs graduating every year, 22 European Business Schools in FT rankings. Study formats are becoming increasingly flexible with 40 percent of the MBA programs either part-time or distance learning. European colleges are trying to gain a global focus through the curriculum, faculty or type of courses offered. To satisfy the growing market demand, institutions have increased their emphasis on leadership and interpersonal skills. Europe’s Buoyant Market 2000 2004 Source: Graduate Management Admission Council How to Read the Charts – The ‘From’ bars show the number and geography of students enrolling in European MBA programs. On the other hand, ‘To’ bars show the number of European students moving towards international B-Schools. Evidence of Growing Demand of MBA in Europe and Increased Mobility Slide14: Key Trends in the European Management Education Market Europe has adopted the ‘Bologna Accord’ to introduce structural changes in higher education in Europe. The key highlights include: It has been voluntarily signed by 40 countries. It has harmonized higher education around a common model – 3 cycles and 2 formats Its implementation will be completed by 2010. The main drivers for the adoption of the accord include: Its compatibility with other higher education systems. It is comparable within Europe and with other international educational institutes. It helps reduce the cost associated with education. Structural Change in Management Education Increased autonomy and increased accountability has facilitated European colleges to achieve greater focus on market orientation. This is evident from: Growth in non-state providers of education Regional decentralization and/or devolution from the central government Institutional autonomy or devolution of authority to the institutions Education becoming market oriented Source: The Future of Graduate Management Education in the Context of Bologna Accord Slide15: Australia’s mature management education market is facing strong competition locally as well as from international players.. Australia had around 46 business schools offering 77 MBA programs each year. Latest estimates indicate the market to be worth US$150 million in 2003. The market offers 41 standard MBA degrees, 27 specialized and 9 Executive MBA degree programs. Out of 46, 24 schools offer a standard MBA only, and 5 offer only a specialized MBA, the remaining 17 schools provide multiple MBA products to the market. Australian graduate education market is presently witnessing saturation, as several key factors are negatively influencing the industry dynamics: Overabundance of business schools and products servicing a limited market Decrease in government funding The cost of studying in Australia has doubled since 2001, leading to a decline is foreign application. Australia has a negative application trend. Double degrees are growing in popularity at both UG and PG levels. Australia Market Structure Source: Australian Business Education Study, Higher Education Review, Various Journals Decrease in government funding is expected to put additional pressure on the competitiveness of the Australian management education market Lack of funding support has led to colleges reducing scholarships/increasing fee for management programs, thereby making the market less attractive The lack of funds is also putting additional pressure on knowledge creation including doctoral education and research Funding IssuesSlide16: The dominance of mature markets is steadily decreasing as Asia starts to play a critical role… There has been a massive increase in the number of management schools in Asia: China has more than 80 accredited courses. In 2001, more applications for MBA were received in China than any other post-graduate course. In Japan, 17 new MBA courses were recently launched as a response to gradual removal of life-long employment and seniority-based salary structure in Japanese enterprises. India has around 1,340 business schools. Russian Association of Business Schools has more than 50 business school members. With the growing number of management programs and lack of identity and differentiation, many colleges are finding it difficult to survive. In addition, the competition is fierce as ranking plays the most important role in student’s decision-making. Crowded Local Management Education Market Asia is facing the same funding challenges as the rest of the world. The Asian management education industry is witnessing decline in public funding. Hong-Kong has already started cutting government funding to management institutes. Singapore government intends to shift the financial burden of tertiary education to private sector and tuition fee. The financial problems are getting escalated due to lack of non-religious philanthropy. Business schools are finding it difficult to attract enough private funds to sustain themselves. Funding Problems The economic boom in Asia has led to a derived demand for management education Source: Asian Management Education: Some 21st century Issues, David B. MontgomerySlide17: Some other significant trends in Asia… Asia is also facing shortage of professionally-qualified faculty. In order to tackle the situation, leading schools have started recruiting from foundation courses including psychology, sociology, statistics and economics, which has its own drawback: Teaching business classroom is in general more difficult than foundation classes. However, Asia is yet to make any structural changes to the research and doctoral education. Asian executives have preference for Asian degrees with highly-reputed international partners: Tsinghua University in China has partnership with both Harvard and Sloan. University of Science and Technology in Hong Kong has partnership with NorthWestern. Asian management education market is also witnessing growing trend of regional partnerships, ranging from joint-degree programs to colloborative research centers: Shortage of Faculty Supply Developing Partnerships Source: Asian Management Education: Some 21st century Issues, David B. MontgomerySlide18: India is a major player in the Asian Management Education Market and is the second largest MBA provider in the world after US … India had about 1,340 business schools including 1,120 institutions recognized by All India Council of Technical Education (AICTE) in 2004. More than 150,000 applicants compete for admission to prestigious business schools every year. The average tuition fee for Indian business schools is around US$4,000 for a 2 year MBA program. India is one of the largest student sending country of origin in the US. Indian students in US increased by 22.3 percent from 2001 to 2004. India Market Structure Significant demand for managers in private, public and non-governmental organizations is providing impetus to the sector. Lack of experienced faculty and massive increase in number of business schools has led to significant increase in faculty salaries and relaxed hiring criteria for faculties. Research is significantly lacking in Indian Management Education. Very few business schools focus on research. Placement is substituting academic excellence as the most important selection criterion for all concerned parties including recruiters, applicants and the media. Lack of a power with the governing body (AICTE) is putting additional pressure on the quality of management education in India. Current Trends Source: Management Education in India – Its Evolution and some Contemporary Issues, All India Management Association Slide19: China is expected to start playing an important role …Today 97 universities in China have been authorized to grant the MBA degree: actually more than 20 MBA programs are on offer. MBA Admissions in China (1997-2003) EMBA Admissions in China (2003) Present Scenario MBA authorized education in China began in 1991. Nearly 86 students graduated from the business school in the first batch*. In 2002, a number of pilot EMBA programs were introduced, together with other management training programs. The market has witnessed exponential growth since then. The number of MBA admissions have increased at a CAGR of 55.5 percent, while the number of MBA programs have increased at a CAGR of 21.1 percent. There are 1,396 universities offering management programs, out of which, 491 conduct bachelor programs with a management major. Today 97 universities in China have been authorized to grant the MBA degree: actually more than 20 MBA programs are on offer. Background MBA Programs in China (1991-2003) Sources: Tsinghua Universtity, China Department of Commerce * Earlier attempts from 1980 not included.Slide20: There exists a four-tier structure in the Chinese Management Education market… Higher Tuition Fees Admission Standards Foreign Faculty Larger Student Enrollment and Number of programs Domestic MBA Foreign-Partnered MBA Foreign-Partnered EMBA Transplant EMBA Most common MBA program serving maximum number of students Rely on Local Faculty Lowest Tuition Fees (<US$5,000) Student body composed of local company and government employees Selective admission criteria English proficiency often a requirement A blend of foreign and local faculty Tuition Fees ranging between US$8,000-18,000 Requires around three years of work experience Similar to Foreign-Partnered MBA Cater to mid-senior level working professionals A blend of foreign and local faculty Tuition Fees ranging between US$20,000-47,000 Requires around three years of work experience A sub-segment of foreign partnered EMBA Majority of the courses are taught by foreign faculty Foreign-partner plays a dominant role in administration. Requires five to eight years of experience Extremely selective admission criteria. Prefers TOEFL and GMAT scores Tuition fee is more than US$35,000 Sources: Tsinghua Universtity, China Department of Commerce Slide21: Demand Gap: Although more than 10,000 students graduate from MBA programs annually, official estimates indicate that China will require 37,500 qualified MBA professionals each year by 2006. Geographical Expansion: While there exists tough competition between different management education provider in the municipalities, there is an opportunity for management training projects in remote regions. Distance Training: More and more management education providers have started utilizing or plan to utilize online distance learning to provide management courses. This is expected to further expand the market. Industry-specific Management Training Project: Industry-specific MBA programs began to be introduced in China in 2002. The trend is expected to satisfy a growing percentage of the present demand-supply gap in the future. Opportunities Irrespective of the significant growth, there exists a huge opportunity for management education in China … Shanghai is the management education hub of China with nine universities providing MBA programs. Most universities offer domestic and foreign-partnered degree/non-degree programs. Most foreign-partnered programs compete on reputation, tuition fee, the ability to target niche areas and international faculty. There is an intense competition between foreign-partnered programs in China. Domestic management programs fail to compete with foreign-partnered programs due to the lack of maturity and faculty experience. Competitive Landscape Sources: Tsinghua Universtity, China Department of Commerce Slide22: Increasing interest in providing Executive MBA programs has led to several launches in the last five years These programs are perceived to be highly profitable, which is driving more and more colleges to form international alliances with international MBA programs from the US, UK, Australia etc. All top-tier courses are provided with the help of international partnerships. However, the extent of partnership decides the pricing of the program. Supply-side Trends Executive MBA is gaining traction in China … Demand for Executive MBA in China is very strong and EMBA programs are highly researched by prospective clients Market-Segmentation for the China market: MNC Senior Managers/Executives Independent and Highly Motivated Individual (includes overseas Chinese who come to region for work, spouses of expats and well-to-do Chinese looking for prestige) Next-generation entrepreneurs who have successful family business Senior Managers/Executives employed in national corporations Demand-side Trends Sources: William ReinfeldPresentation Plan: General Overview 1 Industry Dynamics 2 Strategic Options 3 Management Education Industry Presentation PlanSlide24: Are management institutes teaching the right thing to the right people or are these trends pointing towards a paradigm shift…Slide25: Changing Customer Demographics Globalization leading to transnational intake Growing tendency to self-select Increasing sophistication in selecting program Long decision phase but short application phaseSlide26: Offers better quality education than what is available in their own country Offers better career opportunities Provides a unique cultural experience and an international exposure International recognition and reputation of school in foreign country Value proposition of the college A growing number of students are evaluating programs in foreign countries and Europe is perfectly positioned… Future Growth Of Potential Market Future Potential Graduate Management Market Demographic Trend – 25-34 years olds Future Potential Under-Graduate Management Market Demographic Trend – 15-24 years olds As more and more students evaluate foreign programs, Europe is positioned to gain the most. Europe’s internal pipeline is slow and therefore, there is a growing opportunity for Europe to attract students from the US, Asia and Latin America. Source: Graduate Management Admission Council, 2005 Reason for MovementSlide27: Students are becoming increasingly sophisticated in their decision-making… To develop management knowledge and technical skills To improve long-term income and financial stability To generate professional credentials required for advancement To stay competitive/marketable To gain a sense of personal satisfaction and achievement To pursue something exciting and challenging Reason to Pursue Management Courses Source: Graduate Management Admission Council, 2005; Reasons to Pursue Management Courses is based on a survey conducted by mba.com in Europe Student’s Criteria for School Selection is based on Global MBA Graduate Survey 2004 Student’s Criteria For School Selection Percentage of Sample that Agreed with the Selection Criterion Slide28: Initial decision phase long, but shorter period to apply.. Source: Graduate Management Admission Council, 2005 Based on a survey conducted by mba.com in Europe Time Spent in the Management Education Decision-Making PipelineSlide29: Increasing International Focus – Effect of globalization on each activity of the business education value chain (1/2) Curriculum The curriculum is being revised to include essential analytical skills to prepare students for global strategies and business functions. Business schools have developed ‘International’ core courses in order to integrate global themes into the curriculum. Programs Management institutes have started offering ‘study-abroad’ programs. The success of such programs is evident from the growth in the number of international business programs in the US from 200 in 1990 to 400 in 2000 (100 percent growth). Management institutes use one of the following approaches to build international presence: Build their own facility in the foreign location Develop partnership with foreign university to act as a local host Engage in global joint venture to either deliver their own degrees to foreign students or award joint degrees with local partners Curriculum and Programs Management Education, especially degree-based education has started to shift from the US to other parts of the world. In 2004, US Management institutes lost 0.43 percent of its own MBA market, 13.26 percent of the European market and 7.23 percent of the Asia market to other players in the education market, including the UK, France and Italy. The concentration of the European, Asian and Australian institutes is also increasing in the annual ranking of top-100 business institutes. Growth of non-US education providersSlide30: Students are increasingly considering a range of global options for their business education. It is evident from the student inflows and outflows for top business education markets. Some of the following numbers substantiate this point: In 2000-01, foreign students constituted 19 percent of all students at the US MBA institutions. In the same year, 29 percent of the full-time under-graduate management students and 13 percent of full-time non-doctoral postgraduate management students in the UK were foreigners. In Canada, the number of foreign students in management masters program increased by 26 percent between 1991 and 1997. Among the top-50 schools of 2001, about 44 percent of the enrolled students were categorized as ‘International’. Student Recruitment Accreditation and ranking has shifted the focus of many management institutes towards a well qualified ( preferably doctoral) business faculty. Due to the existing gap in supply and demand, many institutes have started hiring international faculty, as there is a lack of qualified faculty pool in the local economy. This trend is particularly true in non-US economies and less prominent in the US. The average non-US faculty at AACSB member schools was less than 3 percent. Among the top-50 schools of 2001, about 31percent of the faculty were categorized as ‘International’. In terms of US and non-US schools, 25 percent and 42 percent of their respective faculty were international. Faculty Recruitment Increasing International Focus – Effect of globalization on each activity of the business education value chain (2/2)Slide31: Decrease in per capita government funding has led institutions to explore new avenues… European Union Case Study is used to demonstrate the impact of the trend on management education Hungary Sweden Austria UK Finland Norway Czech Republic France The Netherlands Ireland Italy Belgium Spain Portugal Switzerland Germany Denmark % Change in Spending Per Student Change in % of GDP For Education Source: The Future of Graduate Management Education The Size of the Bubble represents the percentage of funds from private sources In Europe, there has been a gradual shift in management education funding from public to private. The continuing change has brought autonomy for public institutions which is evident from: Growth in education delivered by non-state providers Decentralization of institutions and autonomy to manage operations Autonomy to generate revenue through tuition fee, consulting fee, sale of research and provision of Executive MBA Changes Between 1995 and 2000 in State Spending per Student Relative to Changes in % of GDP Invested in EducationSlide32: Funding of management education and the current trends… Major Trends in Management Education Funding To provide greater autonomy to institutes, governments have started offering block grants for teaching, instead of providing an itemized budget. More and more countries are moving towards grants against pre-agreed performance and/or service levels. Grants for research are coming in the form of entitlements, instead of block allocations for general research. Many governments have allowed tuition fees and accepting funds from private sources, which is increasingly leveraged by several institutions.Slide33: Information Technology is dramatically changing the way institutes impart management education… Management Institutes are increasingly re-examining their business programs and are building technology-mediated learning (TML) strategies to build new competitive advantage. Many colleges have been successful in technology implementation, as the implementations was based on an overall TML objective. Examples of Successful TML Strategies based on overall technology objectivesSlide34: Implementation of TML in management institutes… Most management institutes combine synchronous and asynchronous elements of TML for teaching and this mixed-modality approach is expected to continue. A recent survey conducted in the US demonstrates the top five TML tools used in management education. Results also point that while the institutes used the same technology, they did not use a specific single hardware or software. Source: Best Practices in technology-Mediated Learning in American Business Schools, Gretchen Gemeinhardt, Texas Woman’s UniversitySlide35: Researchers Vs Teachers – Which is the right way to go? Global growth in MBA programs Demand for qualified faculty by schools to achieve global recognition through accreditation Increase in undergraduate enrollment Demand Drivers The production of doctoral faculty is decreasing worldwide Enrollments for the doctorate program are declining Employment outside academe is increasing Increasing number of faculty members are reaching retirement age Supply Constraints There is an ever-increasing gap between the demand and supply of professionally-qualified business faculty. For instance, the gap for business doctorates in the US is expected to double between 2007 and 2012. As is evident from the chart, the demand will continue to outstrip faculty supply. Institutions have, therefore, shifted their focus to: Hiring researchers to act as faculties Hiring non-business PhDs to business research and training However, this approach has its own limitations. This is demonstrated by a US Case Study provided on the next slide. Source: Can American Business Schools Survive?. Jarold L. Zimmerman, University of Rochester Slide36: Faculty Recruitment – US Illustration Until 2003, the AACSB required at least 75 percent of the student credit hours to be taught by full-time faculty, with most expected to possess a terminal degree, either a Ph.D. or D.B.A. Background In 2003, AACSB relaxed the accreditation standard. The new standard changed the emphasis from “doctorally qualified” faculty to “participating” faculty. Participation is defined not in terms of degree held, but by the active involvement in teaching and non-teaching activities. Thus, an instructor with a masters degree, who holds office hours, advises students, and serves on committees within the business school could be considered a participating faculty. Initiative The relaxation is driven by the current shortage of new doctorates in business. Argument AACSB standards 2003 will allow schools to maintain AACSB accreditation, while filling the faculty with lower cost instructors that would not have been considered qualified under the old standards. Result Reduction in doctorally qualified faculty Why Pressure to allow higher-proportion of low cost non-doctorally qualified faculty to teach in business schools AACSB relaxes the required proportion of doctorally qualified faculty Diminished academic standard, ability to teach graduate programs, lower standing in the University community and weaker B-School leaders Lower Salary for B-School Faculty and administrators Slide37: Faculty Recruitment – So what is the right strategy? Effect of AACSB’s Relaxation Quantity The chart shows that at the current wages, the quantity demanded exceeds the quantity supplied, resulting in a shortage of professors. In an open market, this should lead to higher salaries, thereby finding a new equilibrium. However, the relaxed standards shifts the supply curve to the right, leading to a reduction in faculty shortage and the equilibrium wage rate. Without AACSB’s Intervention In case the free market forces were left alone, this shortage would have driven the salaries upward for new hires. A higher wage would have led to new entrants on the supply side, reducing the shortage. Higher academic salaries might have induced some MBA students to pursue a business doctorate instead of opting for attractive positions in the industry. It might have led to several current students in non-business fields to shift their degree programs into closely-related business fields. Do not compromise on the quality standard and the open market economy will find its new equilibrium Slide38: There is an increasing focus among colleges to build specialized programs to differentiate their course offerings.. Decline in business school applications in certain parts of the world has resulted in mid-tier business schools trying to carve out niches to stay competitive. The section introduces some of the attempts in the recent past in the US Source: Business Week OnlineSlide39: Why are specialized programs gaining momentum? Demand Side Trends Industry: Most industries are increasingly looking for managers who already have the specialized skill set required in a specific industry. Students: Growing number of students are interested in getting a tailor made MBA programs to distinguish themselves. Candidates also want to acquire specialized skills or industry specific knowledge. Supply Side Trends Universities can establish a strong reputation separate from other general MBA providers. Tends to generate higher revenue and profitability for management institutes. Occasionally, the expertise gained through such courses also helps institutes in generating indirect revenues through consulting. Drivers The demand for specialized courses is relatively limited when compared with general MBAs. Specialized courses lacks the immunity to economic fluctuations within a sector. Lack of course material also acts as a significant hindrance. Institutes offering such programs are required to invest heavily in developing basic teaching resources. Specialized courses require regional resources. For instance, starting a wine MBA in Japan will not meet the desired results. They also require industry support. For instance, efforts to launch same wine MBA in Bordeaux, France without the support on local chamber of commerce would be futile. Challenges Source: The Made-to-Order MBA, BizEdPresentation Plan: General Overview 1 Industry Dynamics 2 Strategic Options 3 Management Education Industry Presentation PlanSlide41: Influencers in business schools’ strategy decision All business schools are continuously managing several internal and external pressures… Source: The Perilous Future of Business Schools, Andrew j. Policiano, University of CaliforniaSlide42: These external and internal pressure have led to structural changes in the way management education is imparted… (1/2) Source: Reproduction from ‘Changing Business Education, Learning and Teaching Support Network’Slide43: These external and internal pressure have led to structural changes in the way management education is imparted… (2/2) Source: Reproduction from ‘Changing Business Education, Learning and Teaching Support Network’Slide44: In such difficult times, all management institutes are trying to outplay each other by using a combination of strategies.. The following three identified strategies have been extensively used by institutes to differentiate from traditional management colleges E-Learning Executive Education ResearchThe role of technology in imparting management education hasincreased significantly: The role of technology in imparting management education has increased significantly Limitation in Campus Facility Expansion - Universities and colleges are finding it difficult to continue expanding the number of on-campus students. Temporal (time) and Geographic constraint - The constraint acts as the biggest obstacle in the expansion of institutes. Technological Development – A reduction in technology cost in addition to bandwidth increase has improved the possibility of leveraging technology in management education. Sources: Leipzig Graduate School of Management In the context of management education, e-learning can be defined as: “The interactive delivery and exchange of rich academic content in an organized fashion to non-residential learners.” Several management institutes are pursuing e-learning strategy as it solves certain key constraints towards expansion Drivers behind e-learning growth e-learning can be realized through various tools, which vary along two dimensions: Type of Communication – One-way or bi-directional Temporal Dimension – Same or different time period Slide46: Penn State Drexel Techno Syracuse iMBA IMD The level of integration of e-learning in US business schools (1/2) Source: AACSB International Wharton Kellogg Case Western Cardean/Ellis Capella U Phoenix Drexel Online CU Denver Online Kelley/Indiana Used as support between frequent classroom meetings “Blended” modular programs: Infrequent, condensed classroom meetings with longer periods of rich e-learning content in between Substantial use of e-learning with minimal number of classroom meetings Entirely non-residential Duke Michigan PurdueSlide47: Source: ED Magazine and ED Journal September, 2001 The level of integration of e-learning in US business schools (2/2)Slide48: So, why hasn’t e-learning replaced the traditional form of teaching? Sources: Leipzig Graduate School of Management e-learning is not a substitute to classroom teaching; however, it can complement old-fashioned teaching. Residential formats and Traditional Distance Learning formats are two extreme cases; e-learning modules can balance drawbacks of the two. However, 100 percent e-learning leads to little customization and a clear lack of interaction. Therefore, integrating e-learning format into both residential format and traditional distance learning can create a ‘win-win’ situation for both students and management institutes . Slide49: Institutes need a comprehensive review of intellectual property policies on the Web Should have royalty agreements or licenses for all materials used from the Web Colleges should implement plans to substitute paper-based textbooks with e-books Use MS-Office instead of pen and paper Materials Assist professors in acquiring information technology skills Help professors in adopting new teaching methods and reduce their reliance on individualistic teaching styles Promote the idea of professors spending more time on written communication with students instead of verbal communication What differentiates a good e-learning strategy? Professor Institutes should focus on technology implementations that replace physical location with e-mail, bulletin boards, chat rooms and so on. Classroom Unlike recruitment for traditional MBAs, colleges should admit students who are: Self-motivated Self-disciplined Well Organized Student Intellectual Property Source: Online Business Education: Issues and Challenges, Education at a Distance Institutes planning to provide e-learning courses need to align various functions, processes and infrastructure in line with the strategy. Slide50: The flip side of e-learning: Without a comprehensive plan, many colleges have failed to leverage technology as a competitive advantageSlide51: Worldwide, the USD 1 billion executive education market is luring more and more colleges to enter the arena… The US$1 billion pie is shared between Executive MBA, customized non-degree management programs and in-company programs. While, business schools were traditionally playing in the EMBA space, the horizon in the recent past has expanded beyond EMBA and now includes non-degree (open enrollment and customized curriculum) and in-company programs as well. Increased focus on executive education has translated into significant revenues for several colleges Open Programs Custom Programs 2004 Ranking of Institutes Providing Executive Education Source: Business Week; Structuring for Scale, Duke Corporate Education Slide52: The largest force that is driving change in EMBA program is the lack of corporate funding for its target segment, due to both financial constraints on companies and significant after-market for employees outside the company. EMBA programs are, therefore, relaxing their admission criteria, as corporate funding is hard to get for executives and many possible target segments including doctors and entrepreneurs were missed by sticking to this approach. It is evident from the fact that the number of students fully funded by corporate in the US decreased from 44 percent in 2001 to 38 percent in 2003, while the percentage of student paying their own increased from 19 percent to 24 percent. Another significant trend witnessed by the EMBA industry is the reduction in the duration of the EMBA course. According to EMBA Council statistics, the number of courses with more than 20 months duration decreased from 51 percent in 2001 to 37 percent in 2003 The trend has been due to increased demand for EMBA program from people who have more work to do but less time to do it Some of the critics find the trend worrisome due to lack of time for academic rigor. While, others find this trend a direct response to market forces EMBA – The most mature market within executive education for management institutes Worldwide, Executive MBA is the most visible and profitable program offered by business institutes. However, there is no lack of criticism for EMBA as many critics call the program a ‘not-so-worthy’ offshoot of MBA, while some compare the course with non-degree executive programs EMBA programs, amidst the criticism, are continuously adjusting to satisfy the customers whose core demographic characteristic is ‘always on the move’ by satisfying his growing needs. Key trends in the EMBA market include: Reduction in Corporate Sponsorships Shorter EMBA programsSlide53: EMBA programs globally are trying to differentiate by using a combination of strategies: Distinction from executive non-degree programs: EMBA programs consistently have high admission standards as compared to open-policy of several other executive programs and provide grades, which is not the case with non-degree programs. Distinction from other management programs: Most EMBA programs add an international element to the MBA, by partnering with institutions in different countries. EMBA institutes are increasingly providing flexibility and reduced campus time. EMBA programs are getting built around multi-disciplinary modules. The strategy facilitates reduction in time spent on campus, as students come together for extended period only a few times in a year and keeping in touch electronically rest of the time Asynchronous e-learning acts as the biggest asset for EMBA program that formulate their programs based on this approach Future of EMBA… Differentiating EMBA Relaxation In Course Timing At an industry level, EMBA program is changing based on the requirements of its target segment. However, experts believe that the demand of EMBA in mature management education market will decline as more and more students will get their MBAs when they are young. At the same time, there is no significant trend pointing towards the decline in the overall market. The market is expected to continue growing at a moderate pace in saturated markets including the US and at a significant pace in growth and developing economiesSlide54: On the other hand, custom and in-company programs are the most dynamic industry segments for management institutes The line between the focus areas of management institutes and consulting is increasingly blurring. This is particularly true in case of in-company programs, where management institutes and consulting are competing for the same pie Opportunity Space Source: Structuring for Scale, Duke Corporate EducationSlide55: To avoid detachment of faculty from real business scenarios. It ensures that current developments find their way quickly into curricula The consulting services act a clear source for business school funding Also provides on-going challenge to faculty and alternate source of income Further increase the interaction between industry and business school, as research/consulting acts as a direct link to the business world. The intensification of networking also translates to indirect benefits: More Interaction with business world Better branding/positioning of the college better recruitment better student and faculty Most successful business schools with consulting operations have positioned themselves at mid-price point with clear focus on Synergy Consulting Synergy Consulting capitalizes on the already existing know-how developed for another purpose. The advantage of this approach is that a large amount of expert staff can be kept at disposal, ready to be used in a suitable consulting assignment, without any stand-by cost. Business schools are most appropriately positioned in the segment, as they have the advantage of using the unutilized time on teaching unlike consulting firm Business schools should try to position themselves in the mid-price segment, as low-price consulting leads to ‘lack-of-quality’ image. Business schools can add a competitive advantage by pricing themselves at the mid-price point, as they do not have to spend significant amount on sales effort There is a growing trend of business schools providing consulting services to enterprises Drivers Most Efficient Market Positioning Source: Structuring for Scale, Duke Corporate Education; The Myth of Standardized MBA, BizEdSlide56: Any institute focusing on providing custom executive education should focus on the following: Develop scale of operations, through: acquiring global clients and leverage global understanding building respected faculty network building staging capability independent of home campus manage client relationship and quality Increase awareness of education as a strategic tool – This should be done by engaging executives in their own language However, grabbing the whole share of the executive education market for management schools will be difficult There is a growing awareness of education as a strategic tool Therefore, consulting firms are entering management institutes’ core business area, which is evident from: Mercer acquiring Nadler, CDR and several other coaching and boutique firms IBM deal with boutique firms and marketing internal management development approach There is a premium available for customized and integrated solutions in the marketplace Customer intimacy is becoming increasingly critical in the market The trends clearly highlight the risk associated with regional, single price point, off-the-shelf, faculty-centric, classroom-based models Key elements of the consulting strategy and challenges in competing with consulting firms.. Strategies for Providing Executive Education A Few Points To Remember Source: Structuring for Scale, Duke Corporate Education; The Myth of Standardized MBA, BizEdSlide57: The focus on research began when the Ford Foundation started to develop five business schools as Centre of Excellence (Carnegie, Chicago, Columbia, Harvard, and Stanford) Carnegie Tech was the pioneer in research, as the funding from the Ford Foundation was used to sponsor research and doctoral education Staffed with economist, Carnegie started producing good quality-research and PhDs. The success led to the adoption of research as a key goal for management education Business schools presently strive to manage two goals: knowledge exploration through research and knowledge exploitation through teaching Business schools investing in research attracted the brightest doctoral talent from the whole world This trend led to differentiation between colleges that excelled due to the strength of their research and the status achieved as a result Investment in research also led to an overall development of management education, as faculty started using their knowledge to develop interesting curricula. Basic analytical problem solving and organizational skills replaced vocational-style courses Applied research based on theoretical concepts led to a fundamental change in business education, as colleges started teaching students ‘how to think’, instead of teaching them ‘collection of facts’. These changes also led to impressive development of management education from 3,200 applicants in 1956 to 102,000 in 2001 Role of Research: The business school’s foundation History Pay-offs Source: Can American Business Schools Survive?, Jerold L. Zimmermann, University of RochesterSlide58: In 1986, Business Week came out with the first business school ranking followed by Forbes, US News, Wall Street Journal and others. In order to maintain/improve the school ranking, deans and boards started re-allocating their resources towards factors that influence rankings and away from research and doctoral education. In addition, faculty started spending more time on teaching and less time on research. Proliferation of executive education courses has led to additional pressure on faculty time dedicated for research. Downfall of research and its few saviors.. Present Scenario While most business schools started shifting their focus from research to teaching, some colleges continued investing in business research, as a source of competitive advantage. Pennsylvania, Michigan, Harvard, Stanford and Chicago are some of the colleges that have been able to sustain their advantage with sustained investment in research. Business Schools Research Ranking (Top 14) Source: Business School Research Performance, Kelley School of BusinessSlide59: The road to sustainability does not stop there, as colleges are trying to find non-traditional ways to generate revenues.. Non-traditional Revenue Generation Non-traditional Cost Cutting Measure Source: various Journals, Internet Search *Please note: There is no substantial evidence directly pointing towards the use of PhD students by Cambridge. The information comes from blog site: http://www.urielw.com/cambridge/18.htmSlide60: Recognition For Teaching Recognition Of Research Positioning Bus. Schools generally takes place along two dimensions: Recognition of Research and Teaching Carnegie-Mellon, Univ of Chicago LSE Harvard, Wharton, Stanford Univ. of Virginia, IMD, Babson Michigan, Duke, London Business School INSEAD Where is CEIBS, and Where Should we be?Slide61: Three distinct strategies:The different ways to determine the content and how to transmit it give rise to the three basic kinds of business schools Teaching Promotion Research HBS IMD INSEAD LBS IESE CEIBS? MCE Kinds of business schools Courses’ length Short Long Development of original material Material elaboration: Percentage of own material used in the MBA against material from other sources Courses’ length: Average of length measured in equivalent weeks HBS Harvard Business School, Boston IE Instiuto de Empresa, Madrid IESE instituto de Estudios Superiores de la Empresa, Barcelona IIST Instituto Internacional San Telmo, Sevilla IMD International Management Development INSEAD Institut Europeen d’Education des Affaires, Fontainebleau LBS London Business School, Londres MCE Management Center Europe, Brussels CEIBS China Europe International Business School Source: Adapted from Campbell, Jarrillo, Jenster @1993Each one of the three kinds of school provide a different kind of added value, which needs very distinct faculties and structures: Each one of the three kinds of school provide a different kind of added value, which needs very distinct faculties and structures Source: Campbell, Jarrillo, Jenster @1993 Three distinct strategies with their different key success factorsEach one of the three kinds of school provide a different kind of added value, which needs very distinct faculties and structures (Cont’): Each one of the three kinds of school provide a different kind of added value, which needs very distinct faculties and structures (Cont’) Source: Campbell, Jarrillo, Jenster @1993 Three distinct strategies with their different key success factorsThe characteristics of the Faculty needed (and, per consequence the internal structure) depend on the position of the school according to its kind and its segment choices.: The characteristics of the Faculty needed (and, per consequence the internal structure) depend on the position of the school according to its kind and its segment choices. The characteristics are so different, that only few schools, in all over the world, are able to occupy more than one or two of these spaces. Thereby, the presence in one of these complicate and even prevent the presence in others Source: Campbell, Jarrillo, Jenster @1993 Three distinct strategies with their different key success factorsSlide65: The different ways to determine the content and how to transmit it give rise to the three basic kinds of business schools Teaching Promotion Research Kinds of business schools Courses’ length Short Long Extensive DESIRED EVOLUTION Promoter The full-time staff acquires more and academic behavior Professor Keeps developing his own material Researcher Joins the scientific rigor with the outstanding practice Dev. of Material None THE THREE OF THEM RUN THE RISK OF GETTING STUCK HALF WAY Source: Campbell, Jarrillo, Jenster @1993Slide66: Thank You You do not have the permission to view this presentation. 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