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Enter the Foreigners
Are Western MBA schools a threat to Asia?
By ALEJANDRO REYES


Asiaweek Pictures.
Artist's sketch of the University of Chicago business campus in Singapore.

Keen to dotcom yourself? You might do well to emulate Hong Kong cyber-celebrity Jonathan Cheng, a former investment banker and co-founder of Internet incubator Incubasia. At least, that is the message of newspaper ads touting the executive MBA program in Hong Kong of Richard Ivey School of Business, a unit of the University of Western Ontario. In the "Ivey will transform your life" campaign, Cheng gives a short testimonial about his experiences at the school's Canadian campus, where he earned an honors degree in business administration in 1993.

Many Western MBA schools have long had links with counterparts in Asia. But some are now setting up their own units here. Ivey opened a center in Hong Kong in 1998. Three months ago, INSEAD of France started a full-time MBA program for 53 students from 25 countries in Singapore. The University of Chicago is renovating an old Chinese family mansion in the same city as it prepares to launch an executive MBA program there in September. In India, well-known American institutions Kellogg Graduate School of Management and Wharton School are partners in the planned Indian School of Business (ISB), a project of Calcutta-born consultant Rajat Gupta.

The newcomers face some difficulties. "We're finding Asia to be a saturated market," says Larry Wynant, Ivey's Hong Kong-based associate dean for Asia. "There may not be room for yet another school here. Companies are much less willing [than in the West] to invest in the training and development side of their people." An executive MBA program run by one of the Western institutions can cost more than $50,000 over two years, not including travel and expenses. NUS Business School in Singapore charges less than half that for a similar program.

Local institutions are bracing for a fight. "With years of experience in the region, our indigenous knowledge of the economy will make the difference," says David Tse of the University of Hong Kong. "Their fees are too high," says Jahar Saha, director of the Indian Institute of Management in Ahmedabad, which charges less than $2,000 for an entire full-time MBA program. One worry: poaching of professors, who are not always well paid. "If the Indian School of Business tries to lure away our teachers, we will be hit hard," says Rammohan Rao of the Indian Institute of Management in Bangalore.

The Western schools say they bring other things to the party. With their global outlook, they cater to the needs of companies that are spreading their wings internationally. Their students earn a world-recognized degree as well as plug into a major institution's global alumni and corporate network. In the classroom, they get to mix with peers not just from Asia but from Europe and America as well. ISB, which will admit its first students next year, says it will cast its net worldwide, not just in India. Students at the University of Chicago's Singapore campus will have face time with counterparts in Chicago's units in Barcelona in Spain and the U.S. "That expands the network," says William Kooser, associate dean of the university's executive MBA program.

For now, the foreigners are concentrating on niches. Most focus on executive MBA programs for managers in their mid-to-late 30s with a dozen years of work experience. INSEAD is pitching for a younger mid-to-late 20s market for its full-time course, which involves attending classes in Singapore and Fontainebleau in France. Others are looking at in-house MBA degree programs. The University of Michigan, for example, has been running customized courses for companies like Hong Kong's Cathay Pacific Airways and Korean chaebol Daewoo. The schools also plan to develop week-long or shorter refresher and other courses.

Why set up in Asia directly? Kooser says his school looked at the possibility of a tie-up, "but we always came back to the fact that we wanted to offer a University of Chicago degree. To do that, we need to have it taught by our faculty." Ivey came to a similar conclusion. "We looked at a couple of schools, but found there was a great difference between our approach and their traditional academic style," explains Wynant. Ivey is a strong proponent of the case-study method and is a major producer of cases for business schools worldwide, publishing about 100 Asia-related ones a year.

The foreigners may be ruffling feathers, but some local schools prefer to look at the bright side. "There are benefits in having top schools here," says John Rose, director of the Melbourne Business School. "Additional high-quality faculty from the northern hemisphere might be brought to our region and develop relationships with us." New entrants do two things, adds Chris Hall, director of the MBA program at Australia's Macquarie Graduate School of Management. "They grow the market, because more people become aware of the product, and they cannibalize the weak." Let the weeding begin.

With reporting by Maria Cheng/Hong Kong, Sanjay Kapoor/New Delhi and Ian Jarrett/Perth

Write to Asiaweek at mail@web.asiaweek.com


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