Innovation and Globalization of Executive Education Programs

Evodio Kaltenecker, Ph.D., Bárbara Mojarro, Ph.D

Introduction

Executive education is undergoing a gradual but radical transformation after two waves of transformation. In the first wave, which happened during the 1960s, the professionalism of faculty and the quality of the courses increased while in the second wave, during the 1990s, the global competition started and featured the emergence of many new MBA programs worldwide (D’Aveni, 1996). The increasing use of rankings forced Executive MBA programs toward specialization or finding a niche in the marketplace. Two of the most important differentiators in this industry are innovation and internationalization. Therefore, it is important to analyze the mutual dependence between innovation and internationalization in the executive education industry.

This article sheds some light on the correlation between innovation and internationalization in the Global MBA programs, and in two types of Executive MBAs, the Customized and the Open enrolment programs. As a consequence, the research question of this study is: “What is the correlation between innovation and internationalization in Executive Education programs?”

The conclusion of this article is that for the universe of top-ranked business school, the correlation between innovation and internationalization is strong in Customized Executive MBA Programs, medium in Open MBA Programs and weak in Global MBA Programs.

1. Innovation in Executive Education Programs

Innovation is a differentiation strategy due to the increasing number of programs available worldwide. Moreover, many Executive MBA programs are abridged versions of traditional MBA courses. Therefore, top-ranked programs are the ones that shifted from teacher-centered to learner-centered and from general case studies to real-life problems the company faced (Conger and Xin, 2000).  Additionally, a shift towards customization and action-learning projects became the norm because the programs had to become more tailored to individual companies or consortiums of companies. (Kaltenecker, 2018). Both increased competition and customer demands for relevance are forcing business schools to rethink traditional approaches and consider more new integrative approaches to teaching business marketing and sales to executives (Narayandas, 2007).

Compelling research and development (R&D) and thought leadership are not only drivers but also competitive advantages of innovation in management education. For instance, one prominent European business school which excels in executive programs invest about 30% of its annual budget in R&D. Moreover, the use of delivery methods other than the traditional case method is an example of innovation in the delivery of courses (Büchel and Antunes, 2007). Finally, business schools are about rigor (quest for reliable knowledge), and relevance (useful knowledge) (Tushman, O’Reilly, Fenollosa, Kleinbaum and McGrath, 2007).

2. Internationalization in Executive Education Programs

The historically international nature of universities plays out in new dynamic ways, pushing such institutions to pursue new opportunities. Moreover, the globalization of markets including that of the educational sector brought a new challenge for business schools (Altbach, Reisberg, and Rumbley; 2009). In the case of executive education, as many companies internationalize and/or face global competition, executives and their employers demand solutions in business education with a solid international dimension. In response, most business schools have adapted their structure and offerings to satisfy that request, and many now claim to be international. According to Hawawini (2005), there are three models of internationalization of executive education programs:

1. The import model, which aims to bring the world to the school, that is, attracting students, faculty, and staff from around the world to the school’s campus with many nationalities represented in the school’s programs, its faculty, its administration as well as its governing body.
2. The export model, which consists of sending abroad faculty and students. The faculty deliver courses off-site but the school’s original campus remains at the center of the entire system. These off-site courses are usually provided in rented facilities to students located in the host country and may include students from the original campus. To increase this type of student experience, many schools have established exchange programs with a large number of institutions around the world whereby students from one school spend part of their program attending courses in one or more of the partner institutions.
3. The network model, which is the most developed approach to globalize a business school, because this model seeks to create a multiple-site institution with full-fledged campuses located in different regions around the world — ideally one campus in each of the main economic regions of the world, that is, the Americas, Asia, and Europe.

It is important to consider that not every executive education program must pursue the network model because some schools are small, others are focused on an attractive regional market, and many simply do not have the resources to become global. Finally, for some business schools, the right strategy option is to become a center of excellence in a functional area such as finance, corporate governance, data analytics, or digital marketing.

3. The lingering question

The goal of this article is to answer the following question: “What is the correlation between innovation and internationalization in top-level Global MBA and Executive MBA programs?”. To analyze the implications between innovation, internationalization in the three main programs offered by the business schools, three hypotheses were tested:

Hypothesis #1: There is a strong positive correlation between Innovation and internationalization in Customized Executive MBA programs.

Hypothesis #2: There is a strong correlation positive between Innovation and internationalization in Open Enrollment Executive MBA programs

Hypothesis #3: There is a strong positive correlation between Innovation and internationalization in Global MBA programs.

 The following paragraphs explain the methodology used for this study.

4. Methodology
To analyze the relevance of internationalization and innovation in executive education programs, this research analyzed three different types of managerial programs: Customized Executive MBA, Open Enrolment Executive MBA, and Global MBA programs. The source of data was the rankings provided by the Financial Times (Financial Times, 2019), an English-language international daily newspaper headquartered in the UK, with a special emphasis on business and economic news. The option for the Financial Times (FT) comes from the relevance of the source (a very influential newspaper in the business segment), its global perspective (a critical topic to evaluate internationalization of executive programs), and the use of factors such as innovation and internationalization in the rankings.

For the three FT rankings used for this research paper (Customized Executive MBA, Open Enrolment Executive MBA, and Global MBA), only the performances of each program in the categories of innovation (Programme design and Teaching methods & materials) and internationalization (International clients, Overseas programmes, and Quality of Partner schools) were taken into consideration. The analysis of the Pearson’s correlation coefficient (r-Pearson) between these two factors were calculated.

5. Results
Table 1 presents the results of the calculations of the r-Pearson correlation factor for the variables Innovation and Internationalization of the three programs analyzed.

Table 1
Standard deviations and correlation factors

Source: Authors, with data from Executive Education Rankings 2019 from Financial Times

6. Discussion

The Pearson’s correlation coefficient is the test that measures the statistical relationship, or association, between two continuous variables and gives information about the magnitude of the association, or correlation, as well as the direction of the relationship. Traditionally, the degree of correlation varies according to the values presented in Table 2.

Table 2. Degree of correlation according to ranges of r

Source: Authors, base on Lee Rodgers & Nicewander (1988)

The use of the results from Table 1 together with the ranges offered in Table 2 allows the testing of the Hypothesis presented earlier in this research,

Hypothesis #1: There is a strong and positive correlation between Innovation and internationalization in Customized Executive MBA programs.

This hypothesis should be accepted, as the p-Pearson coefficient is 0.57, leading to a strong positive correlation between Innovation and internationalization in Customized Executive MBA programs.

Hypothesis #2: There is a strong and positive correlation between Innovation and internationalization in Open Enrollment Executive MBA programs

This hypothesis should be rejected as the p-Pearson coefficient is only 0.36. leads to a medium positive correlation between Innovation and internationalization in Open Enrollment Executive MBA programs.

Hypothesis #3: There is a strong and positive correlation between Innovation and internationalization in Global MBA programs.

This hypothesis should be rejected, as the p-Pearson coefficient is -0.22, which leads to a mild and negative correlation between Innovation and internationalization is also mildly negative.

7. Conclusions

The first conclusion comes from the strong correlation found between innovation an Internationalization in the Customized Executive MBA programs. This result can be attributed to the highly competitive scenario of this segment because such programs must create and deliver customer- and project-specific solutions on a very frequent basis. Additionally, top-level programs (the ones included in the FT rankings) compete with each other on a global basis for their sophisticated customers, which are multinationals companies in need of providing specialty training for the best executives. These firms are able to compare the best programs globally, which leads to intense competition between top-ranked business schools. Therefore, a managerial implication is that both innovation and internationalization are required responses to the cutthroat business environment of a demanding sector (Hawawini, 2005).

The second conclusion comes from the mild correlation found between the innovation and internationalization in the Open Enrollment Executive MBA programs. One plausible explanation, to be confirmed by further research, is that although the environment of Open Enrollment Executive MBAs is competitive, most likely the main driver of innovation is not internationalization (or vice-versa?). Another explanation for the medium correlation is that customers, the participants of the programs, look for other characteristics in the programs, such as the brand name of the institution or functional expertise of the program.

The final conclusion of this research comes from the rejection of Hypothesis #3. In this case, innovation and internationalization are negatively and poorly correlated with one another in Global MBA programs. In this scenario, internationalization may even hurt the institution’s innovative efforts or vice-versa. A plausible explanation can be that programs did not use the opportunity to adopt new technologies, new contents or new formats of programs. For example, a few Global MBA programs simply replicated their current practices and syllabi of their European and US-based courses when they internationalized to the Asian region.

 Evodio Kaltenecker, Ph.D.

Professor at the Instituto Tecnológico de Monterrey and EGADE Business School (Mexico), Academic Leader – Management in Emerging Economies module at the Trinity Business School (Ireland), Faculty-in.Residence at the Austral Education Group (Chile), Research Fellow at the Samuel C. Johnson Graduate School of Management at Cornell University (USA), and Academic Leader – Management Strategy at the MCI – Management Center Innsbruck (Austria). Focus on strategy, Latin America, emerging market multinationals and international business. Author of “Quality According to Garvin”, listed among ten must-read books on quality management in Portuguese. B.S. in Metallurgy by Military Institute of Technology (IME), M.Sc in Industrial Engineering by Federal University of Rio de Janeiro (UFRJ/Coppe), MBA by Harvard Business School (Harvard University, and Ph.D. in internationalization strategy by the Polytechnic School at University of São Paulo (POLI/USP).

Bárbara Mojarro, Ph.D.

Bárbara I. Mojarro-Durán. Ph.D. in Business Administration. Professor of business strategy and organizational behavior at Tecnologico de Monterrey. She focuses her research on the role of the individual in the strategic development of the organization.

References

Altbach, P. G., Reisberg, L., & Rumbley, L. E. (2009). Trends in global higher education: Tracking an academic revolution.

Büchel, B., & Antunes, D. (2007). Reflections on executive education: The user and provider’s perspectives. Academy of Management Learning & Education, 6(3), 401-411.

D’Aveni, R. A. (1996). A multiple-constituency, status-based approach to interorganizational mobility of faculty and input-output competition among top business schools. Organization Science, 7(2), 166-189.

Financial Times (2019). Extracted from http://rankings.ft.com/businessschoolrankings/rankings

Hawawini, G. (2005). The future of business schools. Journal of Management Development, 24(9), 770-782.

Kaltenecker, E. What will the future of Management Education look like? Evodio.kaltenecker.com Extracted https://evodiokaltenecker.com/what-will-the-future-of-management-education-look-like/

Lee Rodgers, J., & Nicewander, W. A. (1988). Thirteen ways to look at the correlation coefficient. The American Statistician, 42(1), 59-66.

Narayandas, D. (2007). Trends in executive education in business marketing. Journal of Business-to-Business Marketing, 14(1), 23-30.

Tushman, M. L., O’Reilly, C., Fenollosa, A., Kleinbaum, A. M., & McGrath, D. (2007). Relevance and rigor: Executive education as a lever in shaping practice and research. Academy of Management Learning & Education, 6(3), 345-362.

Photos:
Headline: Tim Mossholder
Team: Priscilla Du Preez 
Four People: Mimi Thian