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Innovation and Globalization of Executive Education Programs

Introduction
Executive education is undergoing a gradual transformation over the last decades after two waves of transformation. While the first wave occurred in the 1960s and was marked by increasing professionalization of faculty and improvements of the programs to accommodate new demands from executives, the second wave happened in the 1990s and was marked by global competition and the emergence of many new MBA programs, and Customized and Open Enrollment Executive MBA programs (D’Aveni, 1996). Moreover, the increasing use of rankings forced executive programs toward specialization. The search for niches in the marketplace lead to the strategic decisions taken by the heads of the programs to compete in different dimensions, such as the qualification of faculty, the duration of the programs, the balance between theory and practice, the use of innovative techniques, the partnerships with foreign programs and the geographic internationalization of the courses. As a consequence, no university reached a clear, dominant position in this segment, causing its fragmentation.

Innovation in Management Education
Innovation is a differentiation strategy due to the increasing number of non-innovative courses available worldwide, which are, in fact, abridged versions of traditional MBA courses. As a consequence, executive programs shifted towards customization and action-learning projects to become more tailored to individual or consortiums of companies. (Kaltenecker, 2018), increasing competition and customer demand for relevance forced business schools to rethink traditional approaches and consider new integrative approaches to teaching business marketing and sales to executives (Narayandas, 2007)

Compelling research and development (R&D) and thought leadership became 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 research. The use of novel delivery methods other than the traditional case method is also an example of innovation.

Globalization in Management Education
The international nature of universities and executive programs pushed such institutions to pursue new opportunities worldwide. The globalization of markets brought new challenges for business schools. In the specific case of executive education, as companies became international and faced global competition, executives and employers demanded business education with a solid international perspective. In response, most business schools have adapted their structure and offerings to satisfy these requests, and many now claim to be international. According to Hawawini (2005), there are three models of internationalization of executive education programs:

  1. The imported 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 a maximum number of nationalities represented in the program.
  2. The export model, which consists of sending abroad faculty and participants of the courses. The faculty delivers 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. In this scenario, 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. This model seeks to create a multiple-site institution with full-fledged campi located in different regions around the world. Ideally, one campus in each of the main economic regions: the Americas, Asia, and Europe.

It is important to consider that not every executive education program should become a global network of creation of knowledge. Actually, for most business schools the right strategy may be to focus first in their local market and then in their region. Finally, many institutions will pursue the strategic option of becoming a center of excellence in a functional area such as finance or corporate governance.

Are innovation and internationalization correlated?
To analyze the correlation between internationalization and innovation in executive education programs, we analyzed three different types of managerial programs: Customized Executive MBA, Open Enrolment Executive MBA, and Global MBA. We opted to use the ranking provided by the Financial Times (FT) in 2019 due to the relevance of the source and its global perspective, a critical topic to evaluate internationalization of executive programs (Financial Times,2019). For the three FT rankings, Customized Executive MBA, Open Enrolment Executive MBA, and Global MBA, only the performances in the categories innovation and internationalization were used to calculate Pearson’s correlation coefficient (r-Pearson) between the two factors. The Pearson’s correlation coefficient is the test statistics 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.

To analyze the mutual influence between innovation and globalization, we looked for answers for four questions:

  1. Is there is a positive correlation between Innovation and Internationalization in Customized Executive MBA programs?
  2. Is there is a positive correlation between Innovation and Internationalization in Open Enrollment Executive MBA programs?
  3. Is there is a positive correlation relation between Innovation and Internationalization in traditional MBA programs?
  4. Is there a correlation between the rankings of MBA and the Executive MBA programs?

The following table presents the r-Pearson correlation factor and the strength of the correlation observed for each type of executive program.

Table 1
Standard deviations and correlation factors
  The standard deviation of Innovation The standard deviation of Internationalization r-Pearson correlation between innovation and Internationalization Strength of correlation
Customized Executive 23.1 16.2 0.57 Strong (coefficient between ±0.50 and ±1
Open Executive 23.0 17.1 0.36 Average (coefficient between ±0.30 and ±0.49)
Global MBA 28.7 25.3 -0.22 Weak (coefficient between + 0.29)
Open Executive

MBA vs. Global MBA

N/A N/A 0.57 Strong (coefficient between ±0.50 and ±1)
Source: Authors, with data from Executive Education Rankings 2019 from Financial Times

Conclusion and managerial implications

The use of the results from Table 1 allows us to answer the questions presented earlier in this study.

Question #1: Is there is a positive correlation between Innovation and internationalization in the Customized Executive MBA programs?

The answer is yes because the r-Pearson coefficient is 0.57, which leads to a strong correlation between Innovation and internationalization in 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.  Therefore, a managerial implication is that both innovation and internationalization are required responses to the cutthroat business environment of this competitive sector.

Question #2: Is there is a positive correlation between Innovation and internationalization in Open Enrollment Executive MBA programs

The answer is yes because the r-Pearson coefficient is 0.36. However, this value leads to a average correlation between Innovation and internationalization in Open Enrollment Executive MBA programs. Although the environment of Open Enrollment Executive MBAs is competitive, most likely the main driver of innovation is not internationalization, or vice-versa. One plausible explanation 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 course.

Question #3: Is there is a positive correlation relation between Innovation and internationalization in traditional MBA programs?

The answer is no because the r-Pearson coefficient is -0.22. Additionally, the correlation is also mildly negative, a demonstration that innovation and internationalization do no run in tandem in this industry, being both poorly correlated with each other. In this scenario, internationalization may even hurt the institution’s innovative efforts or vice-versa. A plausible explanation can be that programs that are internalized do not adopt new technologies or new formats. Internationalization for Global MBA programs may likely be a replication of current practices, not an opportunity to innovate.

Question #4: Is there a correlation between the rankings of MBA and the Executive MBA programs?

The answer is yes because the r-Pearson coefficient is 0.57. The explanation for these results comes from the sharing of resources (faculty, infrastructure, funding, knowledge) between MBA and Executive MBA programs. The managerial implication is that business schools (and Executive MBA Program, for that matter) that offer Executive MBA Programs among the top 100 worldwide tend to offer top-level Global MBA programs as well.

In conclusion, innovation and internationalization tend to be correlated for most types of executive MBA programs. More discoveries to come because this article is just the first step of a journey in which I will study the industry of executive education programs.

References

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 Science7(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 Development24(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/

Narayandas, D. (2007). Trends in executive education in business marketing. Journal of Business-to-Business Marketing14(1), 23-30.

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

 

 

 

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