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MBA Internationalization at Selected Elite Business Schools: Challenges of Geographic Dispersion and Coordination

Introduction

A remarkable characteristic of business schools’ evolution is their complexity and global reach, which lead to differences in configurations and modes of governance. Some business schools own a single campus responsible for all activities related to research and teaching. At the same time, other programs pursue multi-site configuration. Different units perform specific tasks, while some business schools developed partnerships with other programs to increase their global impact. Executive education became international and highly competitive. Consequently, business schools adopted novelty structures to meet the increasing demand from customers, executives seeking to increase skills (to pursue senior-level positions), and multinational firms seeking to develop their managers.

Internationalization of B-schools

The internationalization of business schools raises two concepts: (i) the geographic dispersion of the business school and (ii) the coordination of their many units to support the main campus in its task to deliver programs in management education. Several authors discussed the effects of geographic dispersion and coordination of units with different roles in knowledge-intensive firms. Henceforth, to fill the identified theoretical gap, the article “MBA Internalization at Selected Elite Business Schools: Challenges of Geographic Dispersion and Coordination” [1] addresses the geographic dispersión and coordination in Business schools. We identified four types of governance in Business schools: the Center of Excellence (CoE), the Center of Gravity (CoG), the Alliance, and the Ecosystem. Finally, the study found three different internationalization paths of business schools. Surprisingly enough, some Business Schools present ambidexterity regarding governance types.

The Center of Excellence (CoE)

In this type of governance, the main campus generates research and teaching activities with support from Subject-Specific Research Centers (SSRC). However, this type of governance presents limited geographic dispersion because of its concentration in only one metropolitan area or region. In addition, there is a low level of coordination because the main campus and the research centers are closely connected and staffed by the same professors and researchers

The Center of Gravity (CoG)

Centers of Gravity are an evolution of the Center of Excellence. In this type of governance, the main campus is supported simultaneously by several SSRCs and RSRCs, which are by definition geographically dispersed. Therefore, the CoG governance presents more geographical dispersion than the CoE does. This governance structure requires a low level of coordination because both the SSRC and the RSRC are part of the same institution. This type of governance reaps the benefits of specialization and concentration on the main campus and the benefits derived by a broad region scope (Figure 3).

The Ecosystem

The Ecosystem is a governance type in which a business school takes advantage of several campuses geographically dispersed worldwide; the business school starts with the Main Campus sets up International Branch Campuses and Region-Specific research centers as the organization sees fit. Each of the campuses under this model has its faculties, facilities, region connections with companies and government, grants degrees (sometimes even Ph.D.), and develops academic research with the collaboration of the other campuses. The Ecosystem scores high in geographic dispersion because of the international location of the campuses in different countries and regions. This structure requires an intermediate level of coordination because the units are part of the same institution and located internationally. This type of governance occurs either as an evolution of the Center of Excellence, when the institution adds an International Branch Campuses to the Main Campus, or when a Region-Specific Research Center builds capabilities to become an International Branch Campus.

The Alliance

This type of governance occurs when home and foreign institutions establish an interinstitutional agreement to recognize their educational programs mutually. Through Alliances, each business school has access to shared tangible and intangible resources such as campuses, faculty, knowledge, and brand recognition that each school would not have access to individually. Consequently, the Alliances allow the participating business schools to provide more sophisticated and diversified learning experiences because short-term, semester year-abroad programs are effective ways to increase the international exposure of participants. Note different types of governance (CoE or Ecosystem) and various ambidexterity. This phenomenon allows the simultaneous coexistence of different kinds of government in the same organization: a CoE for the MBA and an Alliance for other courses in executive education. that the individual business schools may offer different types of programs under

Discussion

The internationalization of elite business schools is in an initial phase

The overwhelming presence of the Center of Excellence type of governance in Top 100 business schools provides critical information about business schools’ internationalization. The CoE is the simplest form of internationalization, without Region-Specific centers, International Branch Campus, and no partnerships with foreign institutions. The international perspective of the CoE is limited to foreign faculties, the discussion of topics in international business, and a few short international trips of the participants to increase students’ degree of global openness. If business schools want to become more international, they must use other governance.

There is a dynamic perspective of governance modes

The analysis of the attributes of the Center of Excellence explains its dominance among governance types of schools. First, the CoE is the entry-level governance type, as the business schools generally start with a single campus. If the business school owns the required resources for its growth, it can incrementally add Region-specific Research Centers, Subject-Specific Research Centers, and International Branch Campuses. From the CoE governance, three possible paths of development exist: (a) from the Center of Excellence to Alliance; (b) From the Center of Excellence to Ecosystem; and (c) From the Center of Excellence to Center of Gravity. The following figure illustrates the three different paths for the evolutions of governance modes.

(a) From the Center of Excellence to Alliance: schools look gradually for cooperation with other programs to compete globally. This governance moves from the Import model, the Academic Ventures, and later to Academic partnerships, Alliances, and Consortia models Hawawini (2011) described.

(b) From Center of Excellence to Ecosystem: programs grow organically by opening degree-granting International Branch Campuses worldwide. On top of the INSEAD example (INSEAD Campuses 2016), London Business School, CEIBS, HEC Paris, Iese Business Schools, and EMLyon Business School follow this path. This internationalization mode follows the Foreign Direct Investment (FDI) mode described by Engwall and Kipping (2013) and the Campuses Abroad (Hawawini 2011).

(c) From Center of Excellence to Center of Gravity (CoG): In this case, the CoE moves toward a high level of resources while keeping complexity low because of the lack of interfaces between the business school and other institutions. The Harvard Business School is the only example of this path, as the institution added several regional research centers to its Main Campus. Again, however, this path is rare because of its dependence on many resources.

Not by coincidence, the only example of CoG comes from the Harvard Business Schools, the institution with the largest endowment in the world. Moreover, the CoG governance is relatively recent because the only CoG institution inaugurated its first regional center less than 25 years ago.

The top 25% of business schools present more diversified types of Governance

The first quartile of business schools presents the following breakdown of governance types: CoE (72%), CoG (4%), and Ecosystem (24%). Consequently, the top 25% of institutions are more internationalized than the remaining quartiles. This result suggests the link between internationalization and performance (in the sense of improved rankings). Global enterprises (such as business schools) require efficient well-structured cross-border hierarchies (the coordination of units, in the case of this manuscript) to combine knowledge resident within the various constituent units within the firm and extract an advantage from it. Hence, the suggested relation between internationalization and searching for new knowledge and performance.

There is a dominant form of governance, but an emerging form also exists

The CoE is the dominant form of governance in the elite MBA programs (90%), and the Ecosystem is the second most common governance model (9%). This result is surprising due to two reasons. First, there is a specific need for the participants of the MBA programs, with a better understanding of the global forces that shape their businesses. Therefore, the candidates pursue a globalized approach to their education, a characteristic found in internationalized business schools, campuses in different countries, and international modules from the pool of institutions that form the Alliance mode. Second, there is a specific need for multinational companies, which often sponsor the participation of their executives in MBA programs. These firms need to offer their mid-level executives an improved understanding of the differences in doing business with different perspectives. Therefore, we expected more business schools using the Ecosystem or the Alliance models, which offer a broad view of international business from the experts from different geographies around the world than the Center of Excellence, which poses some but limited international exposure.

Country/Region of Origin effects: European-based MBA programs are more diversified than US-based MBA programs

On the one hand, one can see more Ecosystems among Europe-based schools than in the US-based ones. The explanation comes from the integration efforts in that continent since World War II, such as the Bologna Process. Therefore, European Business schools can open new campuses in the neighboring countries, building competencies to open campuses in other continents earlier than their counterparts from the USA. However, on the other hand, European MBA programs present more diversified approaches to governance because similar level institutions tend to attract each other, more common in Europe due to the European integration process than in the US. Therefore, MBA programs in Europe are more diversified regarding the location of campuses and more open to collaboration among themselves, either using their resources (Ecosystems) or pooling their resources (Alliances).

Business schools from the developed world set up the standard for the others

The research [1] found no evidence of country/region of origins effects in adopting governance types between the business schools from the developed and emerging markets. This unexpected result contradicts the traditional literature because a country’s education infrastructure, a school’s degree of internationalization, and many other factors fashion the pedagogy, format, and style of effective IB teaching in different regions and countries. It is somewhat surprising because most of the programs in management from the developed countries originated in the first wave of the evolution of business schools. In contrast, management programs from emerging countries started during the second and third waves of the development of schools. The lack of evidence of country/region of origin effects can be explained by the international nature and knowledge-sharing profile of academic work, allowing deans and faculty to share their experiences and knowledge in educational forums and journals. The frequent interaction of faculty, co-development of research, and the exchange of ideas, accelerated by the improvements in telecommunications, uniformize the evolution of business schools worldwide. Therefore, leading business schools dominate schools in their own countries and other countries. Because the leading business schools from developed regions do not present a varied profile of governance types, the programs from developing countries will follow this trend. Consequentially, a more diverse governance profile will probably happen first in business schools from developed countries and later adopted by emerging markets.

Some schools are ambidextrous

The analysis of the governance types found that some business schools adopted different governance types for various programs. In general, this ambidexterity occurred when the business school used the one mode of governance of the MBA program and other governance types for other management education programs, such as the Executive MBA. Therefore, differences in demands between the MBA and different courses create Business schools’ ability to present a dual form of governance. Probably, other training may require higher levels of international experience, faculties from foreign countries, and international study trips. Business schools pair with other programs from different regions that face the same market demand to fulfill the market demand. Therefore, ambidexterity may happen as a consequence of a specific market need.

Conclusions

The research´s first contribution to the business school´s internationalization effort is that business schools vary significantly in resources, reputation, size, position in rankings, country of origin, and complexity. However, there are only four possible configurations for their governance, based on their geographical dispersion and coordination of units. This finding answers the research question of this manuscript: Are there different types of governance for elite business schools based on differences in the geographic dispersion and the coordination of units? The second contribution to the IB literature comes from finding a dominant and emerging form of governance, the Center of Excellence and the Ecosystem. There is also the region of origin effect, as top European programs present more governance diversification than counterparts in the USA. Finally, there is also an essential dynamic perspective regarding the governance of management programs, as business schools evolve in three different routes: from the Center of Excellence to Alliances, the Center of Excellence to Ecosystems, and the Center of Excellence to Center of Gravity.

Moreover, programs from developed and emerging regions do not differ much regarding the different types of governance. However, it is also noteworthy to acknowledge some limitations of this study. First, this manuscript analyzed elite business schools, sophisticated, resourceful, and globally-known institutions. Therefore, the results may differ for non-elite business schools. Second, additional research may be necessary to understand the governance of business schools regarding other types of programs, such as the elite Executive MBA programs. Finally, some Business schools present ambidexterity regarding their governance, which was not studied but opened promising research opportunities.

Implications for the real world.

Several findings of this research generate implications for deans, faculty, and administrators of business schools. First, the Center of Excellence is a suitable form of governance for the MBA program that scores low in resources and complexity. Despite the simplicity of the CoE form, business schools can still be part of the elite group of the top 100 MBA programs worldwide. However, as the school’s availability increases, faculty should select the internationalization track that fits the organization; the Alliance (inorganic growth through the resource-sharing to increase global reach) or the Ecosystem (organic growth through school’s resources). However, the Center of Gravity seems an uncommon choice. In the case of a resource-rich school, Ecosystem governance is a viable option; in the opposite case, the Alliance may be the preferred route.

Regarding the country of origin, deans of European business schools have more options for developing their schools than their counterparts of North American programs, who prefer the CoE governance. Regarding the presence in the first quartile, business school officers that target the first quartile may use two paths: first, strengthening the Main Campus (the CoE model); second, opening the International Branch Campus (the Ecosystem model). Finally, officers of business schools from the developing world should not pursue a magic formula for governance to compete with schools from developing markets because programs from developed and emerging countries present about the same percentage of governance types.

Reference:

[1] https://www.tandfonline.com/doi/full/10.1080/08975930.2022.2033666

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People – Photo by fauxels from Pexels

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